What Drives Drone Profitability? Lessons from South Dakota Growers

Surveying Drone Adoption Across Eastern South Dakota

A new study from South Dakota State University’s Ness School of Management and Economics brings fresh numbers to a topic essential for producers considering new technology: Are drones really delivering measurable value in actual row-crop production? Analyzing survey responses from 595 corn and soybean growers in eastern South Dakota, the researchers examined how drones are actually used, what drives adoption, and whether they pay off in the real-world economics of farm operations.

The findings, published in the journal Precision Agriculture, underscore the complexity behind drone investments, and why many growers are still weighing their options even as adoption rates climb.

Where and How Drones Are Used

Drone applications among the surveyed growers break down into two key roles:

Capturing aerial imagery to monitor crop health, identify nutrient or disease issues, and guide management.
Precision application of inputs such as fertilizer or crop protection products, leveraging GPS guidance.

According to the survey:

11% of respondents use drones only for imagery.
6% use drones only for input application.
7% use both functions.

This means about 18% of the sample are involved in some form of drone-based imagery, and 13% are using drones for input applications, a trend that has picked up rapidly in the past three years. Notably, input-application drone adoption is now outpacing imagery-only drone adoption among the most recent adopters.

SDSU professor Tong Wang, who led the research, explained that imagery drones saw earlier commercial rollout, but input-application drones are “growing at a faster rate today.” Application usage was “nearly nonexistent five to ten years ago,” she reported, with most adoption coming only recently.

The Economics: Upfront Costs and Variable Returns

The study cites a cost estimate based on the DJI Phantom 4 v2 platform: initial investment totals around $4,391, covering hardware, required software, insurance, and licensing. Annual running costs are estimated at $2,685, with each flight adding about $52 in operating expense.

Grower experiences with returns were far from uniform, and the results highlight the uncertainty that still surrounds drone technology:

22% of input-application drone users reported a profit increase of at least 5%. Within this group, 16% called it a “moderate” increase and 6% claimed more than 10%.
For imagery-only users, 15% reported at least a 5% profit improvement, (12% moderate, 3% above 10%).
Losses were unusual, only about 3% in either category reported reduced profits, but a large share simply did not know. About 20% of adopters said they had “no idea” whether drones made a difference, a figure that rose to nearly half among nonadopters.

What Determines Profit and Adoption?

The study tracked not just who brought drones onto their farms, but who actually found them worthwhile. Some findings challenge common assumptions.

Larger operations by gross sales and those with more variable soils were more likely to adopt drones, especially for imagery. However, farm size did not predict whether drone use paid off financially. The researchers suggest a technical reason: “Drone batteries typically last only seven to twelve minutes during input application,” far less than the up-to-45 minutes seen in imagery flights. This battery limitation can make it difficult to maintain efficiency at larger scale, tempering financial gains.

Education level played a significant role in both adoption (especially for imagery) and perceived profitability. As Wang and her colleagues put it, “Higher education equips farmers with more knowledge, skills and resources to effectively learn and interpret the output of complex technologies such as UAV for decision-making.” Farmers with at least some college were more likely to both adopt and benefit from drones.

Interestingly, adopter age was not a significant driver of whether a farmer used drones. But it did affect profitability: older farmers were more likely to see a profit increase, particularly on the input-application side. The authors suggest this correlates with financial position; older growers often operate with less debt and greater access to capital, factors that shorten the path to positive returns.

Adopters already invested in conservation practices (like reduced tillage or biofertilizers) were also more likely to add drone imagery to their toolbox. This could reflect a broader openness to management innovation.

Barriers: Financial and Technical

The study highlights financial considerations as the top adoption barrier, especially for younger growers with higher debt loads. Wang noted, “Financial support, such as subsidies or low-interest loans to younger farmers, will be important in lowering the usage costs and helping them overcome initial financial barriers.”

But financials are only part of the story. Technical skills, being able to interpret and act on real-time data generated by modern imagery and application workflows, matter. As drone-generated information becomes more sophisticated, being able to extract value from the data stream distinguishes those who convert investment into tangible returns from those left uncertain.

Uncertainty is the reality for many producers, with 20% of current adopters unsure of their profitability change post-drone and nearly half of nonadopters in the dark. As Wang’s co-author Akinsola Oyebanji points out, bridging that knowledge gap via research-based outreach could “make a real difference in helping farmers decide if this technology is right for their operation.”

Practical Takeaways for Row-Crop and Specialty Operations

While the context of this study is corn and soybeans in South Dakota, the insights have relevance wherever drone adoption is growing, whether mapping canopy stress in Arizona vegetables, supporting precision applications on Idaho potato fields, or monitoring specialty fruit crops in Hawaii.

A few practical points emerge from the data:

Input application by drone can improve profits for some, but the margin often hinges on skilled interpretation and the ability to optimize for field variability and operation size.
Imagery adoption brings value, especially where soil conditions vary or conservation practices are already part of the system, but realizing a clear profit boost still depends on connecting image data to actionable decisions.
Battery endurance is a meaningful constraint for field-scale input application; larger operations may hit a wall unless future drone generations address these limits.
Growers with more experience, financial stability, and technical training are reaping more value, but targeted outreach and financial tools could help younger and smaller-scale growers narrow the gap.

The Road to Informed Adoption

Drone technology continues to mature, but the South Dakota findings show the “worth it” calculation is not one-size-fits-all. Drone-enabled field mapping, NDVI analytics, and precision input placement are powerful tools, but their real-world payback is shaped by adoption strategy, technical literacy, and the grower’s ability to organize field information into management outcomes.

As research like this expands to cover more states and cropping systems, field-scale evidence will sharpen investment decisions for producers across the country.

Source: https://www.agdaily.com/news/many-farmers-using-drones-question-whether-theyre-worth-it/