Upstream Ag Insights - April 22nd 2024

Essential news and analysis for agribusiness leaders

April 22, 2024 • Read Time: 18 minutes

Welcome to the 212th edition of Upstream Ag Insights, where every week more than 15,800 agriculture professionals dive into the latest events, innovations, and business dynamics impacting the agribusiness landscape.

My name is Shane Thomas.

Whether you're a new subscriber or this newsletter found its way to you through a forward, you're in an unparalleled place for frameworks and insightful analysis designed to help you navigate innovation in agriculture, and answer questions surrounding what happens next, enabling your business and career to thrive.

Index

  1. 2023 FMC Annual Report Highlights and Analysis

  2. 22 Mental Hacks for Agribusiness Leaders

  3. Distribution is King: The AgTech Distribution Dilemma

  4. AI Precision Spraying Pioneer Greeneye Technology Raises $20M to Scale U.S. Operation

  5. BioLumic Gets $3 million (USD) Investment

  6. TraceCOMPLETETM now includes guidance on Nitrogen management

  7. The Pyramid of the Flexible Mind

This week’s edition of Upstream Ag Insights is brought to you in partnership with Headstorm

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1. 2023 FMC Annual Report Highlights and Analysis - Upstream Ag Professional

FMC revenue declined to $4.5 billion in 2023, a decrease of $1.32 billion or 23% compared to 2022.

On a regional basis, sales in Latin America decreased by 33%, sales in Asia decreased 21%, sales in North America decreased 16%, and sales in Europe, Middle East and Africa decreased by 14%.

The decreases were primarily impacted by the industry wide channel destocking.

Approximately $590 million in 2023 revenue came from products launched in the last five years, representing 14% of the total revenue. Products launched in 2023 accounted for approximately $146 million in sales, or 3.2%. Revenues from FMC products launched in the last five years were down only 2%

For the full highlights and analysis including breakdowns of FMC patents, revenue by segment, how the diamide product line impacts FMCs business, the growth expectations in the Plant Health business and how FMC is evolving its business models and staffing structure to ensure success in Plant Health, become an Upstream Ag Professional member today:

*This article is available to all Upstream Ag Insights subscribers for free*

Over the past several years I have published a “professionals tips” based article for new University and College grads entering the agriculture industry. This has consistently been one of the most popular articles shared each year within Upstream.

One of the most commonly cited pieces of feedback I received around it was that it shouldn’t be emphasized to just new grads, but all agribusiness professionals. Taking that into account I decided to emphasize it more broadly.

I won’t claim the principles to be novel for industry veterans, but I know for myself the 22 principles act as a reminder to help improve my output, critical thinking, professional development and ability to be disciplined.

With that in mind I rewrote and added to portions of the article, renaming it 22 Mental Hacks for Agribusiness Professionals.

These 22 mental reminders are the aspects that have had a disproportionate impact on me and my short career.

Here are five of my favorite from the twenty-two:

2. Learn Broadly and Be Curious (Always Be Capturing - ABC) Being an experienced professional doesn’t mean you can stop learning. In fact, I believe you have to work harder to learn the further you get into your career, at least that’s what I have found.

A quote that sticks out to me illustrating this comes from Alvin Toffler:

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

The world changes fast. Your learning habits have to too. Never stop learning.

3. Embrace Complexity Agriculture is at the intersection of numerous technological innovations. This leads to an increasingly “complex system” that is the agriculture industry.

Complex systems are unforgiving places for companies, and people who shy away from the challenge. Get excited about complexity, not scared. Overcoming complexity is where the asymmetric upside lies.

5. Be Open Minded The world is changing faster than ever. Don’t shut down new ideas; ask “why not” and “what would need to be true for this to work?”

Reframing preconceived notions in an opportunistic way can help eliminate the logic of “the way things were” and get to “what could be”.

7. Expand Your Time Horizons 3 years out seems like a long time, but it’s likely <10% of your working life. Think 10 or 15 years out instead when it comes to things like skill development, career moves or how a technology could impact you.

11. Become Great at Numerous Things Being in the top 1% of a specific area is hard. But being in the top 80% of 3 - 4 diff areas/skills is more achievable & differentiates you plus opens more doors. You’ll be known for a very specific skill combination & increase your career options and the value you bring to customers, employers and the industry. A CPA (accountant) that is also a CCA (Certified Crop Advisor) that has also developed a strong skillset in C++ or Python (coding) is uniquely positioned in the ag industry today.

For the entire list of 22, check out the link above.

*This article is available to all Upstream Ag Insights subscribers for free*

3. Distribution is King: The AgTech Distribution Dilemma - Patrick Honcoop Linkedin

This is a very good article from Patrick Honcoop laying out steps to help companies think through their approach to distribution. I particularly liked that he highlighted all available avenues and acknowledged incentive structures as a key component:

Patrick sharing his framework is important. What constantly stands out to me regarding conversations about distribution is that it often gets narrowly thought of as product delivery or basic market access, and primarily as an afterthought.

This misses the importance of distribution.

For a dive into why distribution is one of the most important considerations of any agribusiness, along with an agtech example of how challenges arise, become an Upstream Ag Professional member today:

Greeneye Technology, the pioneer of AI-enabled precision spraying technology that is proven to reduce herbicide use in farming by an average of 88%, today announces the completion of a $20m funding round led by Israeli investment company Deep Insight.

The round is supported by existing investors Syngenta Group Ventures, JVP, Orbia Ventures, and Eyal Waldman, the founder and former CEO of Mellanox (now part of Nvidia), as well as other notable new investors including Iron Nation and Amol Deshpande, the founder and former CEO of FBN.

Greeneye Technologies has now raised more than $45 million.

Other precision spraying companies include:

*Note: This is a basic landscape overview that is not all encompassing. I am working on a more in depth battle chart for Upstream Ag Professional members to more effectively compare these companies and products that will entail aspects like pricing, go-to-market/support, speed of applications, multi-tank systems/multi-line, retrofit (and what equipment the retrofit works on) or integrated, connectivity needs, camera type, average herbicide reduction and a host of other things.

Greeneye Overview

Some of the stats surrounding the Greeneye precision spray system according to Sprayers101.com, Greeneye releases and my conversation with Greeneye include:

  • The cost of the Greeneye system installed is ~$240,000 US currently. This gets the customer a Greeneye system for a 120-foot boom, a new reinforced aluminum boom (important aspect of retrofit systems), retrofit of the sprayer to dual tank, installation, and warranty.

    • Notably, the retrofit being compatible with the majority of sprayers in the market along with the dual tank system is a point of differentiation for Greeneye— for example, John Deere’s retrofit system (See & Spray Premium) only works on MY25 and newer Hagie, 400 and 600 Series sprayers, or as a Precision Upgrade on MY18+ and newer R-series and 400/600 series sprayers. On top, the Premium system is NOT dual-tank like the Greeneye today.

    • Dual tank capabilities enables precision and broadcast spraying to be carried out simultaneously— broadcast applying a residual herbicide product with a contact prodyct, or broadcast applying a biostimulant while precisely applying a herbicide for example.

  • A spot sprayer's return on investment (ROI) will depend on farm size and herbicide use. Based on observed savings, Greeneye estimates that for a farm larger than 3,000 acres, the system would typically pay for itself in less than two years.

  • The Greeneye business model is unique. They do not charge subscription fees for the use of their algorithm. For example, John Deere charges for the use of their algorithms on a per acre basis. John Deere charges $3/acre US for corn, and $4/acre for soybeans and cotton, each time you make a precision spray pass with See & Spray Ultimate/Premium in crop (non-cropped applications are $1/ac). Note: The retro-fit John Deere Premium costs 10% of the Greeneye at approx. $25,000 for the equipment and instal.

  • Travel speeds of 15 mph are working well, according to Greeneye’s website.

  • Greeneye uses custom-made TeeJet DG4003 tips using Gevasol solenoids running at a speed-dependent frequency. These nozzles are on a spacing of 10”. The 10″ spacing allows for higher resolution of the spot spray, increasing potential savings compared to a 20″ spacing.

  • Greeneye systems come with an in-cab screen that illustrates important spray related insights like predicted acres till empty. The Greeneye software also creates post application maps of where weeds are and as applied maps along with the ability to drill-down and see specific pictures from the field where the system applied product. This helps manage some of the complexity of farmer psychology and any apprehensions they may run into around trusting the system.

  • Greeneye claims a 94% reduction in burndown herbicide use during pre-emergence spraying compared to broadcast application.

  • 87% reduction in non-residual herbicide use during post-emergence spraying compared to broadcast application.

  • Greeneye achieves the same weed control efficacy for broadleaf as broadcast application – ~96%

  • When comparing identical herbicide programs, total (residual and non-residual) herbicide costs were $40.6/acre with Greeneye $105.8/acre with broadcast treatment – representing a cost saving to farmers of $65.1/acre.

For a deeper dive into what Greeneye is doing to expand beyond herbicides into micronutrients, fungicides and even insecticides, along with a look at what Greeneye needs to do to evolve their market access and who that might be through and who might acquire them, become an Upstream Ag Professional member today:

AgriZeroNZ's $5 million (NZD) investment in BioLumic marks a significant stride in the pursuit of low methane emission pasture-based solutions. BioLumic, renowned for harnessing ultraviolet (UV) light to enhance crop genetic expressions, is set to apply its innovative light treatment technology to ryegrass, a staple in New Zealand farming.

By increasing the fat content of ryegrass, BioLumic aims to reduce methane emissions from grazing animals who consume the forage grass. BioLumic is targeting a 2-3 per cent increase in fat (lipids) content of ryegrass to drive methane reduction by over 12 per cent.

This announcement is focused on ryegrass and New Zealand, a crop and geography I normally wouldn’t cover, but I find BioLumic to be an interesting company beyond New Zealand borders and ryegrass.

BioLumic has now raised around $45 million and is a company focused on treating plants with ultraviolet light to stimulate specific physiological responses in plants. This is known as photomorphogenesis.

Photomorphogenesis is how seeds and plants respond to specific light waves and regulate their growth and development in response to light.

Light can trigger various physiological and morphological changes in plants through their photoreceptors. When specific groups of plant photoreceptors absorb a particular light, it goes through a complex process that activates signaling components, ultimately leading to changes in gene expression and plant physiology.

For the full deep dive into the seed indsutry dynamics lending themselves to make BioLumic a potential big player, an overview on the science behind photomorphogenesis, a look at previous BioLumic partnerships, what the potential business model looks like and a breakdown of what shortcomings need to be overcome within the technology, become an Upstream Ag Professional member today:

Trace Genomics is excited to announce the launch of TraceN: a first-of-its kind tool that connects soil biology data to nitrogen fertility product placement.

TraceN is an intuitive, easy-to-use report that provides guidance for placing nitrogen fertility products and increases confidence in management decisions. It fits alongside the other tools in the TraceCOMPLETE repertoire to strengthen grower confidence in agronomists and consultants at the farmgate.

The product includes the following surrounding biological insights:

Biological Nitrogen Loss

  • Urea volatilization potential: Represents the abundance of microbes in a sample responsible for converting urease to ammonium. 

  • Nitrification potential: Represents the abundance of microbes in a sample responsible for converting ammonium to nitrate (the form of nitrogen most susceptible to loss). 

  • Denitrification potential: Represents the abundance of microbes responsible for transforming nitrate into nitrogen gasses, which are lost to the atmosphere. This form of loss mainly occurs in waterlogged soils with low oxygen levels.

The interesting part here is that there are some similarities to Nitrogen loss and crop disease.

In crop disease there is what is known as the “disease triangle” which outlays the three components that need to occur simultaneously to bring about a disease— a host crop, a disease pathogen and the right conditions.

In Nitrogen loss, it’s often not emphasized that a similar triangle exists:

  1. There is a need for nitrogen.

  2. There is a need for high loads of microbes to be present

  3. There is a need for the right environmental and soil conditions.

Nitrification for example, is a natural process in soils that converts ammonium to nitrite and then to nitrate. The soil bacteria Nitrosomonas spp. extract energy from ammonium by converting it to nitrite. A second group of bacteria, Nitrobacter spp. then convert nitrite to nitrate.

Nitrification inhibitors suppress the microbial activity on the nitrogen source, leaving the nitrogen in its positively charged Ammonia form and less prone to losses. In general, nitrification inhibitors are more effective in sandy soils, or soil low in organic matter and exposed to low temperatures.

If Trace can identify higher risk soils due to assessing the physical soil aspects (eg: soil texture and CEC) along with the microbial activity of pertinent microbes, it can deliver a tool to better apply nitrogen stabilizer products.

For example, there are numerous commercially recognized nitrification inhibitors, although the most commonly used are Nitrapyrin and dicycandiamide. Many urease inhibitors are applied directly onto, or into the granule, but Corteva’s nitrapyrin for example, can be applied directly to the soil which actually brings up opportunities for variable rate applying stabilizers more effectively with better testing (though test resolution will vary).

The test also includes the following:

Biological Nitrogen Gain

  • Symbiotic nitrogen fixers: The abundance of nitrogen-fixing microbes that form a symbiotic relationship with crops; the microbe reported is dependent on the crop selected.

  • Free-living nitrogen fixation potential: Represents the abundance of microbial genes in a sample responsible for nitrogen fixation that is not dependent on a symbiotic relationship with a host plant.

Chemistry

  • Ammonium, nitrate, CEC, OM, and pH

Related: I highlighted Trace Genomics in February 2024 when they raised over $10 million.

Non Ag Article

7. The Pyramid of the Flexible Mind - Deepwater Asset Management

The most compelling entrepreneurs—those that generate the best return for their investors—tend to believe unreasonable things. To achieve extraordinary results, you must do something no one else wants to do. You must be contrarian and right. To start a business and dedicate a career, that takes an extremist. You need to land on a new island and burn the boats. There’s no going back.

Other Interesting Ag Articles