Equipment Companies as The Agronomic Chassis

Over the last few months, I have been talking to many individuals about the influence of equipment on the execution agronomics, precision agriculture and crop inputs in their entirety.

I realized that I have shared portions of my view within Upstream, but never shared the entire framework for why I think it is worth paying attention to for anyone in the world of inputs.

With that, I wanted to put together an overview of how I think about this.

Index:

For much of my career in ag retail as an agronomist, the default assumption I had was that input companies and retailers shaped agronomic outcomes. Crop protection, seed and fertilizer drove how farmers managed their farms. Equipment mattered, but it was “dumb iron."

In my mind, equipment was a basic medium for how innovative products got applied that offered little difference from one machine to another.

That framing was ignorant at best, and dead wrong if we look at the farming world today.

In fact, looking ahead, I think equipment companies, and the dealerships working with them, will increasingly become the biggest influencers of agronomic decisions and execution of better outcomes as it pertains to crop inputs, and potentially the biggest winners in being able to gobble up share of that crop input value pool.

Input products still matter, but the machines have rapidly become the linchpin for acquiring information, deciding and executing precise application, and this has disruptive implications.

Inputs have, to use my old perspective, often become the “dumb” component riding along on a “smart” platform. That’s a bit hyperbolic, but if we look at the shift towards generic chemistry and reliance on commodity fertilizer, we are seeing that increasingly farmers are using less innovative product products due, in many instances, to a lack of new options:

Increasingly, the options a farmer has, and what they decide to do, might come from the optionality the equipment itself delivers.

I view equipment as the Agronomic Chassis for farmers.

The chassis includes the sensors and cameras, the software and AI that interpret it, and the execution hardware that turns a decision into an action at plant, or zone scale. In some instances, if we look at some of the start-ups in the world, from the likes of Solinftec, to TRIC Robotics, to laser weeding solutions, to seed destructors, the crop protection and yield optimizing mechanism itself is not solely a sprayable product.

I think whoever owns and/or integrates that chassis increasingly decides what gets used, where it gets used, and how effectively something gets applied, which means they increasingly can access that value pool.

I think there are three main reasons for this: data acquisition, execution and integration layers.