And I think you need to be able to bring together the entire package, if you want to be able to do these projects that have favorable margins to the company.And we’ve deliberately, over the years, set up a pumping solutions, engineering group. We’ve worked on land use. We help bring development money to our customers and all of that together is why we can pull off the projects, whether they’re small scale or large scale and make good money.Ryan Connors Got it. Okay. And then my other one just was on the transmission side. Speaking of the supply chain you mentioned, Steve, any lead-time update there? I know you have been a constraint at one point, you’d indicated that lead-times have started to get better. We’re holding around 40 weeks, I think, is what you mentioned.
Any update there on lead-times in transmission, particularly?Steve Kaniewski We’re still around and the market is still around that same 40-week lead-time. There’s a few competitors that may be slightly below that. But as an industry, 36 weeks to 40 weeks depending on the construction is kind of holding at this moment. And that’s with, as we mentioned earlier, the CapEx budgets being up a little bit more than we originally anticipated. We were thinking maybe 7%, 8%, more like 10% now.And so we’ve been able to keep our ship complete on time pretty strong at that level, but obviously looking for areas of growth from our operations team in ours. And if we can create the hours, we know that we’ll be able to start to pull some of those lead-times down, which should be viewed favorably by the customer.Ryan Connors Got it.
Thanks for your time.Operator Thank you. Our next question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question.Brent Thielman Hey, thanks. Good morning. Steve or Avner, again, really impressive margin that this quarter investor has seen in years. I guess my questions, look, I mean, with the run-up in steel prices, you’ve seen so far this year, to what degree were those costs reflected in the first quarter?And then, I mean, shouldn’t that have a more material impact on 2Q and 3Q margin just given the natural lag in pricing? I guess, where I’m confused because it sounds like you think your margins can sustain at these higher levels have been in the face of that.Avner Applbaum Yes, thanks. I’ll take that one.
Good morning. So, overall, as you mentioned, we had strong margins in Q1, and we do expect those margins to continue throughout the year.Now, there is lagging between the steel increases and how that impacts our P&L as we buy inventory does impact our pricing, although eventually, they kind of net, there is some fluctuations you’ll see throughout the year. So, the higher steel costs, we’re not seeing it yet on our P&L. We’re not seeing it yet in our back or that’s going to lag definitely for several quarters.So, overall, we might see there is some lumpiness you might see throughout a certain quarter based on the increased deal. But we — as Steve mentioned, we do a very really good job on managing those increases through some financial hedges, physical hedges, pricing.So, overall, it’s not a concern for us.
We just kind of manage it closely, and it can create some movements within quarters, but nothing that should impact our overall performance and margin profile.Brent Thielman Okay. Thanks Avner. I guess the follow-up would be on the Agriculture segment. I’d just be curious your sort of high-level thoughts how we ought to think about for this evolving lending agreement or the access to capital, liquidity for farmers? Is that a concern as being lenders sort of across the country, tightening credit here? How do we think about that in the context of that business?Steve Kaniewski Brent, it’s a good question. We’ve seen it out there quite a bit. Farmers have one of the best abilities to pay back because they have an asset base that’s there back up the loan.
So, I think there’s a lot of programs out there that have discounted or bought down points as it relates to machinery and equipment.As we’ve talked about many times, pivot is the second best payback on the farm compared to the tractor. And that three to four years is a typical payback. So, even with some of the elevated rates, probably in the 400, 500 basis point increases from the same time last year, that still works financially, particularly given the elevated crop prices.Soy being at $14.60, anytime you’re close to $15 is an unbelievable soy type price. Yes, their inputs are up. But I think that those inputs as they look out going further have come down and stabilized. So, maybe they locked last year at a high rate this year.That’s what has been kind of the — as we went through the kind of first quarter that the farmer just really needed to sit down with their account and they kind of figure this all out.
And — because it’s a new environment for them, it’s a little uncertain. I think they’re getting a lot more certain as things progress. And we’ve not seen it affect land at this point too heavily, more on the small grower side but not the big grower side. They’re actually out hunting for land.And on the machinery equipment perspective, as I mentioned earlier, if it’s a large-scale farm, they’re going to put a pivot in and they’re typically buying cash anyway. So, I think the overall environment, if kind of this is where it is, then the grower will digest it and make their decisions.And the answers are not very much different. It’s still the track there. It’s still land, it’s still a pivot are all good investments for the grower. So, that’s — I think they should remain fairly positive even despite the rates.Brent Thielman Okay.
Thanks for that Steve. Appreciate it.Operator Thank you. Our next question comes from the line of John Braatz with Kansas City Capital. Please proceed with your question.Jon Braatz Morning everyone.Steve Kaniewski Morning Jon.Jon Braatz Steve, in your commentary, you talked a little bit about the increased R&D spending in the agricultural area. And I’m wondering if you could tell us how much maybe your spending and what the trend is like going forward? And maybe some of the things that you’re working on give us an idea of what the opportunities are?Steve Kaniewski Yes, we have been increasing R&D spend to the tune of, let’s say, $4 million to $6 million per year kind of year-over-year. And that has gone to — a big portion of that is to AgTech, Prospera and the Insights product being one of it.
That’s something that we’re seeing very strong adoption rates, real good paybacks for the growers that are utilizing it.But we’re not just working on pure AgTech. We’ve also been investing over the years, if you think about our drive, X-Tec is a continuous drive machine. So, there’s only one other app in the marketplace that doesn’t hydraulically, we can do it electrically. And so we can get around the field in two hours with that product. That took some significant investment to do that.We’ve now put icon panels on to our linear machines, that was something that we’ve been wanting to do for a number of years. So, it’s a combination of upgrading both the pivot and the electronics around the pivot and the functionality of the pivot and also these newer agronomy type of services that we’ve done out there.Avner Applbaum And I’ll just jump in.
Specifically to research and development, kind of the overall dollars that we spent last year, we’re approaching $50 million and that’s specifically R&D. Of course, we spend more on innovation and such, and we continue to increase. But just as a reference point, it was $46 million last year.Jon Braatz Okay. Thank you, Avner. And Steve, last thing, last week, you announced this partnership with Control Module and guide some reading on the technology and what’s happening in that area.And it sounded very interesting, but can you tell us a little bit more about what you see for that technology and that market opportunity and maybe how your partnership with Control Module might work? Now, I understand it’s small at this point, but is kind of move the needle down the road?Steve Kaniewski Yes, I think when you look at our data acquisition and the way that we get that in and process the data, we’re looking at a series of technologies that are there to try and bring that forth.
And that company gives us an element of that, that we wouldn’t have otherwise.We’ve always said that we want to look at the ecosystem and decide where to invest and kind of own the technology versus where we want to partner with a company that already has done significant R&D and probably too big of a head start for us to get into there.So, it’s — our ecosystem of the way we’re going to grow technology will be done through a lot of these kinds of partnerships. And so we’re excited about them. It is something that down the line, our infrastructure technology, which we’re going to talk a lot more about at our May 23rd Investor Day.So, we’ll be able to give you a lot of good color as to how that ultimately fits in with the growth strategy and the transformation of our business into some more recurring revenue.Jon Braatz Okay.
All right. Thank you Steve.Operator Thank you. Our final question comes from the line of Brian Wright with ROTH MKM. Please proceed with your question.Brian Wright Thanks. Good morning. Just was wondering with the Farm Bill going through its process, are there any things that we should be watching for or that you’re hearing about that they can have an impact on the ag part of the business?Steve Kaniewski Good morning Brian. The Farm Bill always goes through a lot of maturations and political wrangling. Usually, the food stamp issue can kind of blend into to some degree, but it’s typically very bipartisan. The from a state that is very ag based. We don’t expect any significant kinds of changes to that. There is sometimes — and now is bleeding in more some of the environmental considerations that go with it and so those are things that we’re watching.If there is more of a regulated kind of data to be provided that actually is good for our business because it’s where our technology solutions are helping the growers today to meet their ESG needs.