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Calculating Your Value Gained and Return on Investment for Automated Harvest Yield Forecasts

December 5, 2018 5:00:00 AM EST
 

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Each greenhouse is unique.

Your cultivation methods, equipment, and size of workforce and facilities are but a few factors that makes you distinct from your nearest neighbouring greenhouse. Given the unique attributes of your business, it is challenging to calculate beforehand the exact value and return on investment (ROI) your greenhouse will obtain from our AI-automated harvest forecasting services. Here we provide a guide for you to make a value estimate based on your knowledge of your greenhouse operations. 

Motorleaf strives to provide at least a 2x to 3x return on investment to customers purchasing our artificial intelligence technologies. There are many sources of value, cost savings and other monetary benefits from our precise, automated harvest estimates. Below is a list of primary factors you should consider when evaluating the value of this artificial intelligence technology. How much is each factor worth to you?

 

1) Meeting contract obligations when your harvest yields fall short

You can almost hear the beads of sweat forming on the foreheads of your sales team once they realize the expected yield this week is short by 20% or more. Sales promised to deliver the full amount weeks before; now your greenhouse scrambles to buy the missing produce as quickly as possible--often from a competitor that knows they can charge you top dollar--in order to meet contract agreements with your buyers and wholesalers.

  • How much produce could you have bought at a better price from another farm if you knew weeks prior that you would be unable to produce enough of your own to meet contract obligations with your wholesaler? No longer caught off-guard, you gain leverage in negotiating fair prices. What is that worth to your business?

2) Selling your excess produce and avoiding waste

The pendulum swings both ways. During periods of unexpectedly warm weather and peaks during the harvest season, sudden bursts in harvest yields 20% or more than what you expected is common. What do you do with all those extra tomatoes and peppers? Chances are you will need to sell them at a sharp discount to clear out your perishable inventory as quickly as possible. Or you could simply absorb the hit, accepting lost profits as the excess becomes destined for the compost pile.  

  • How much of your produce could you have sold at a higher price if you knew weeks in advance that you will have excess yield? This will avoid the need to sell excess, perishable produce as quickly as possible below market price. How much waste could your greenhouse avoid and instead use that excess for sales and promotions? 

3) Better labour management

With a shrinking labour pool, rising wages and new regulations imposing limits on overtime, efficient management of your employees needed to harvest your crops is essential; however, when harvest yield estimates are imprecise, it's tough to know if you planned just enough, too much or too little labour to get the job done.

  • How much produce would you avoid wasting if you could ensure you had enough employees available to harvest and pack the fruit on time rather than it rotting onsite? How much money would you save from better labour management that avoids the need for employees to work overtime in order to harvest your crop on time?

4) Better timing of promotions and marketing campaigns

Back to your Sales and Marketing teams: they are eager to beat the competition and gain market share by providing your buyers with unbeatable deals. A month before your team committed to offer a two-for-one promotion on your vegetables. At the time of harvest, you learn that this week's harvest yield will be short. You now must purchase the missing produce at market price only to then sell it at the discounted promotional price. 

  • How much more money would you have made on a promotional discount for your produce if you could better match surpluses in production with the timing of the promotion?

5) Opportunity costs from NOT automating this repetitive, time-consuming task

Predicting your future harvest yields is a time-consuming task completed be highly skilled agronomists. Our clients estimate that this task requires on average 1.5 days of work each week for each employee making the estimate. That's a lot of time devoted to an arguably tedious task in hot greenhouse. Imagine if these skilled workers could do away with this responsibility so they could instead focus on business development, experimenting with new crop varieties and optimizing growing conditions to produce the best quality vegetables. 

  • How many hours and employees do you devote each week towards calculating your harvest yields? What benefit would your greenhouse obtain if you automated this task and used these employees to do other work in the greenhouse?

6) A reputation for being accurate and dependable

Putting a dollar figure on your reputation is difficult; however, you know that being dependable with your deliverables and transparent well in advance when the unexpected happens shows your buyers that you run a tight ship. Overall, being accurate and straight-up with your crop production results in fewer headaches for your buyers and wholesalers. Chances are your buyers will strengthen their relationship with you and offer better prices for your efforts. You can bet they'll prefer doing business with you compared to a lackadaisy greenhouse.

  • What reputation and value do you gain by avoiding producing too little produce to meet contract obligations with a buyer? Will you be better positioned to renew future contracts with this buyer? If yes, would you be able to negotiate better prices for your produce if you are more than twice as reliable in your harvest forecasting compared to your competitors?

So, what is accurate, automated harvest yield forecasts worth to your business? We would like to know. Also, did we forget any source of value from the above list? If yes, would you be so kind and inform us of our omission in the comments section below.

Wishing you bountiful harvests.


Would you like further information about our AI-automation services or additional guidance on calculating your ROI from these services? Simply fill out this request form and we will get back to you shortly:

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Note that we at Motorleaf use these terms interchangeably:

  • harvest yield estimates
  • harvest forecasts
  • crop yield calculation
  • harvest yield prediction
  • harvest yield projection

Topics: yield prediction, greenhouse, ai, tomato, artificial intelligence, Insider, agtech

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