Transcript Presentation Title - Association of Equipment Manufacturers

AGRICULTURE, TECHNOLOGY&
EQUIPMENT:
THE CONNECTED FARM
Robert H. Buker, Jr.
President and CEO
U.S. SUGAR CORPORATION-- ASSETS
• 193,000 acres
– 173,000 acres sugar
– 20,000 acres citrus
• North America’s most efficient sugar milling operation
– 38,000-42,000 ton per day mill built in October, 2007
• 1 integrated refinery with packaging: 15 million cwt. capacity
• Railroad operations
– 278 miles of track
– 28 locomotives
– 1138 railcars
•
•
•
•
1 citrus factory: 21 million box capacity
Citrus nursery—North Central Florida
NFC aseptic storage: 52 million gallons
Total 1600 employees
2
LAND ASSETS—200 SQ. MILES
SPREAD ACROSS 5 COUNTIES
Each block is one
square mile
3
PRODUCTION
• 140,000 sugar acres harvested annually
• 7 million tons sugarcane produced
• 700,000 tons of sugar produced
• 1.95 million tons bagasse (cane biomass)
produced to run raw factory/refinery
• 30-35 million gallons molasses produced
• Three million boxes of oranges grown
• 120 million gallons of 100% pure, premium Florida
orange juice
4
BUILT STATE-OF-THE-ART SUGAR
FACTORY IN 2007
• New facility is the lowest cost sugar producer in US & Mexico
5
CURRENT CHALLENGES
• Farming operations account for 2/3 of our cost
• We must farm cheaper than Mexican sugar
producers – NAFTA opened borders in 2008
• Price of sugar dropped 50% over last two years
70.00
U.S. Raw and Refined Sugar Prices
Last Two Years
60.00
50.00
40.00
30.00
20.00
10.00
U.S. Raw
Source: USDA. Raw cane sugar, nearby #16 contracts, delivered New York.
6
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
0.00
RESULTS OF NAFTA
7
AGRICULTURAL OPERATIONS—OUR
HORIZONTAL FACTORY
• Farming 173,000 acres of sugarcane
across 5 counties
• >2500 pieces of equipment
• 1 supervisor for 10,000 acres
• Plenty of data—we needed to
leverage it better
SAP
Rolling data
acquisition
tools
(vehicles)
Legacy
Production
Systems
Enterprise
Ag Data
Crop
Models
Spatial GIS
8
THE BURNING PLATFORM
• Commodity business
– Sugar pricing dropped 50%
• High crop input costs
– Don’t expect relief from crop input
pricing
• Cane production is the driver
– Outweighs cost reduction in the unit
cost equation
• Budget cuts put crop production
at great risk
• We have the best people…
…but not the best tools
• There is no silver bullet…
…we need a lot of bronze bullets
9
BE THE BEST
AT WHAT WE CAN CONTROL
Weather and Sugar Price (Can’t Control)
Planning
Optimal
Economic
Cane
Production
Execution
Operational Excellence
Key Cost Inputs (Labor, Equipment, Crop Inputs, Fuel)
Input Prices
Input Volume
Can’t Control
Maximize ROI
(Precision, Quality, Efficiency, etc.)
10
OPx
OPx
Operational Excellence
FIELD TECHNOLOGY HAS
CHANGED THE WAY WE OPERATE
• Provides “virtual supervisor” reports on tractor
location & movement
• Green Seeker—only sprays fertilizer &
insecticide on plants
• Reduces spray rate variation
• Precision guidance of tractors & implements
results in 18% reduction in passes through field
• Savings in fuel, chemicals, labor
11
BUSINESS INTELLIGENCE WILL
CHANGE THE WAY WE OPERATE
• Field technology is important,
but a distant second to
business intelligence and
information management
– Crop models
– Operational planning and
execution
– Utilization, productivity, and
efficiency
– Analytical tools
– Reporting and visualization
12
IMPROVED EXECUTION = INCREASED
TONS
Right
Operation
Right
Time
Right
Quality
•Correct
implement
•Chemical
cultivation
•Correct
settings
•Not too early
•Correct speed
•Not too late
•Mechanical
cultivation
Right Thing
•Correct pH
Right Time
Right Way
13
Proper
Treatment
of Field
TECHNOLOGY SOLUTIONS
Partnered with Trimble (Leader in
Ag technology markets)
• Large scale application of technology
• RTK (Real Time Kinematic positioning--improves
accuracy to one inch levels)
• Autopilot
• Flow control (precise chemical applications)
• Field IQ (crop control input system)
• Data Communication (DCM wireless data
transfer)
14
THE CONNECTED FARM
• Established the largest, contiguous Wi-Fi Network in the
world across 173,000 acres of sugarcane fields
– To capture and direct information from our farming operations
• Hardware (i.e. existing products)
– Immediate improvement of field operations
• Decision support tools
– Better understanding of actual performance vs. plan
• Productivity, efficiency, timing, etc.
– Better understanding of cause and effect relationships that impact cane
production
• Software solutions
– Reports
– Tools to visualize data and information
– Integration with other data sources
15
TECHNOLOGY BENEFITS
• Management system
improvements
• Increased cane production
• Lower cost
• Improved equipment reliability
• Improved operator
performance
• Increased safety and security
Expected Benefits are $34M on a sustainable basis
16
Overlap Reduction - Disking
Manual
3 passes – 60 ft
AutoPilot
3 passes – 72 ft
20% increase
ROI based on 15%
by year 3
17
Spray & Finish Improvements
• Field technology (AutoPilot, Field IQ, etc.) is
delivering both expected and unexpected
benefits
Better quality plow “finish”
leads to less subsequent
passes
Spray rate variation was much
greater than we anticipated
18
Connected Farm
Initial Focus
• Increase
productivity and
efficiency
• Drive out
operational
delays
2013 Benefits
• Spray (Herbicide) Program
– $15/acre or $2.0M below baseline
• Land Prep (Planting)
– 15% reduction of hours per planted acre (>6,000
hours)
– >$700,000 potential impact
• Fuel Use Reduction
– Identified opportunities to reduce tractor fuel burn
rates
• Optimize gear selection and rpm
– ~1 gal/hr reduction or ~$500K annually
20
CLOSING
“As a military helicopter pilot, outdated equipment
and information can result in immediate and often
fatal consequences.
As a business, outdated equipment and information
can result in a slower and less dramatic fatality,
but dead is still dead and your competitors will
dance on your grave.”
Robert H. Buker, Jr.
21