Upstream Ag Insights - April 8th 2024

Essential news and analysis for agribusiness leaders

April 08, 2024 • Read Time: 17 minutes

Welcome to the 210th edition of Upstream Ag Insights, where every week we 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 what’s driving outcomes throughout agriculture, what happens next and enabling your business and career to thrive.

Index for the week:

  1. Corteva 2023 Annual Report Highlights and Analysis

  2. Breakdown of Lindsay Announcement to Acquire a Minority Interest in Pessl Instruments

  3. BioConsortia Secures $15 million in Latest Funding Round

  4. Your Agribusiness Cannot Afford Focus Deficiency

  5. Is Agtech Entering A GenAI Era? Conversations From World Agri-Tech

    1. GenerativeAI Strategy in Agriculture: What Can We Learn from Farm Management Software?

    2. LLM Agents in Agribusiness

  6. Agribusiness Updates

    1. AGCO and Trimble Close Joint Venture, Form PTx Trimble

    2. Nutrien Mulls Latam Divestments After Losses, Management Exodus

    3. Syngenta Group 2023 Results + Beijing Nudged Syngenta to Withdraw $9 billion Shanghai IPO on Market Weakness

    4. UPL Plans to Launch IPO of its Seeds Business, Advanta Ent, in 2025

  7. Growers Edge Crop Plan Warranty Continues to Grow

  8. AI Demand / Supply - Models, the $2T Compute Build Out, Need for Nuclear & More

  9. Other Interesting Ag Articles

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

Introducing AGPILOT, the Gen AI Agronomic Assistant – built by Headstorm.  

AGPILOT is an app that utilizes Gen AI to seamlessly integrate grower-advisor interactions with vast troves of both external and internal data. Leveraging sources such as Microsoft's ADMA solution for external data, and proprietary data repositories developed by ag retailers, AGPILOT transforms raw information into actionable insights in real-time. By automating research tasks and consolidating relevant data, AGPILOT empowers advisors to perform their duties more efficiently and effectively. 

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Index for the full highlights and analysis:

  1. Overview

    1. Revenue, Revenue by segment, Revenue by geography, Margins

    2. 2024 Expectations

  2. Seed Business

    1. Licensing

  3. Crop Protection

    1. Biologicals

  4. Innovation, Patents and R&D

    1. Corteva Catalyst Launch

  5. Corteva View on Precision Crop Protection Applications: Does Corteva understand the implications on their business?

  6. Other

    1. Inventory

    2. Manufacturing facilities

    3. Litigation overview

    4. Resources

For the full highlights and analysis, including the index above, notable stats like biological product growth, see and spray impact on business, opportunities in Corteva Catalyst and more, become an Upstream Ag Professional member:

Lindsay Corporation, a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced it has agreed to acquire a 49.9 percent minority interest in Austria-based Pessl Instruments GmbH, with an option to acquire the remainder of the company at a later date.

Pessl is a leading global provider of advanced agricultural technology solutions under the METOS® brand and offers IoT hardware and software tools for informed decision-making, including field monitoring systems with a wide array of agronomic data points that inform Lindsay’s award-winning FieldNET® remote irrigation management platform.

This investment by Lindsay comes less than a year after the two companies had initially entered into a strategic partnership, announced in May of 2023. It also comes less than a year after Lindsay acquired FieldWise, a remote irrigation monitoring and control company.

For the full breakdown of the investment, highlighting the rationale, market penetration of Pessl, and more, become an Upstream Ag Professional member today:

BioConsortia, Inc., a leading agricultural technology company that discovers, designs and licenses advanced microbial products to reduce the ecological impacts of agriculture while ensuring crop productivity, today announced that the Company has closed an internal financing round that will fund expanded development of microbial products designed to increase crop yields by fixing nitrogen or controlling nematode, fungal and soil insect pests. Existing investor Otter Capital led the round, excited by progress shown in recent field trial results, as well as new discoveries that further enhance BioConsortia’s microbial gene-editing leadership position.

BioConsortia has now raised a total of $67 million.

They previously raised $15 million almost exactly 1 years ago. If they went through all of that capital, it would put their burn rate at $1.25 million per month, not accounting for any development-based revenue or IP sales that they might have.

BioConsortia has two primary investors, one generalist investor and one agbio specific investor— agbio investor Otter Capital, the lead of this round, is also an investor in NewLeaf Symbiotics and AgraQuest (purchased by Bayer), along with Khosla Ventures, which is one of the most famous VC firms in the world thanks to founder Vinod Khosla, which has been involved in two of the most prominent venture backed start-ups in agriculture— Blue River Technology and The Climate Corporation.

BioConsortia focuses on R&D across product segments that include biostimulants, nematicides, fungicides and nitrogen fixation, which might their most prominent opportunity.

N-fixation is complex, yet as many recognize, presents one of the most significant opportunities within the industry.

For the full breakdown, including the opportunity in Nitrogen fixation, highlights of their partnership with Mosaic and their unique approach to discovery, become an Upstream Ag Professional member today:

The Pacesetter Pod has quickly become one of my favorite agribusiness podcasts.

In this episode of The Pacesetter Pod, host Joe Mosher shares a story of a well-capitalized organization and how its access to resources highlighted the destructive nature of a lack of focus— chasing every opportunity.

He emphasizes that the biggest constraint in business is not capital, but rather focus.

In many instances, a lack of focus leads to a shortage of capital.

In the fantastic book Consilience: The Unity of Knowledge, E.O. Wilson famously said that,

We are drowning in information, while starving for wisdom.

I think this quote can be extrapolated to what Joe is talking about too, in business, or our personal progression efforts, we are often drowning in opportunity, while starving for focus.

The issue Joe raises isn’t specific to incumbent organizations, either. Some of the most commonly referenced agtech start-ups have suffered from a lack of focus, including:

And many others.

Customers can only take so many product offerings at once. Employees can only prioritize so much. There is only so much capital.

What stands out to me is what a company says “no” to.

In Corteva’s case, they exited entire countries, forfeiting already assured sales in those countries along with exiting commoditized crop protection products to prioritize differentiated and higher value active ingredient products.

The essence of strategy is choosing what not to do. And, as Joe highlights, a strong strategy is the key to focus and focus is as much about what you say no to as what you say yes to.

As famous strategist Roger Martin says:

The two most fundamental strategic choices are deciding where to play and how to win.

When those are determined, then you can focus time and capital towards dominating that chosen area.

You can’t play everywhere, and surely can’t win everywhere. But the objective of good strategy is having focus to be a forcing function and a point of leverage to increase your odds of being successful.

I think this can be extrapolated to personal development too and summarized with “Show me your calendar and I’ll show you your priorities.”

Tim Hammerich collected the views and opinions of many industry leaders surrounding generativeAI in agriculture. If you are looking for a diversity of perspectives on the impact on genAI, give this podcast a listen.

In aggregate, there is optimism surrounding the utility of generativeAI in agriculture, which is enthusiasm I share.

Last week I shared a post surrounding strategy in generativeAI:

One area I didn’t elaborate on, but emphasized as an opportunity is LLM autonomous agents, a notable future capability in the context of integrations into agribusiness software where I see the biggest upside for LLMs to make agribusiness professionals more effective and efficient. Given the chatter around GPT-5 launching later in 2024 and agents being an upgraded component of the new models capabilities, I think it’s worth highlighting.

For a full breakdown of what agents are, why they are important and a thorough example of their applications to agribusiness via an existing ag software company, including implications for agribusiness professionals, become an Upstream Ag Professional member today:

6. Agribusiness Updates

a. AGCO

AGCO Corporation and Trimble today announced the closing of their joint venture (JV) transaction. The JV, known as PTx Trimble, combines Trimble's precision agriculture business and AGCO's JCA Technologies to form a new company that will better serve farmers with factory fit and retrofit applications in the mixed-fleet precision agriculture market.

AGCO has acquired an 85% stake in PTx Trimble, and Trimble will hold a 15% stake. Going forward, the PTx Trimble JV will be consolidated into AGCO's financial statements.

For a deep dive on the rationale and strategic logic, check out my write-up from when the initiative was announced in September 2023:

b. Nutrien

I was sent the Reuters article after sharing some of the Brazil challenges last week within the Nutrien 2023 Annual Report Highlights and Analysis:

A comment Nutrien shared surrounding Brazil was the following:

Paused our expansions and acquisitions in Brazil, focusing on integrating recently acquired businesses.

Corporate speak for “we haven’t been able to make these acquisitions work.”

Their Brazil business had negative EBITDA in 2023.

Related: Largest Brazilian Retailer, Lavoro announces nearly 100% profit downturn in Q2 2024 - Agro Pages

The positive highlight of Lavoro's balance sheet was the segment called "Crop Care," which is the company's production of agricultural inputs. Despite having a small share of total revenue, the area saw a 26% increase in revenue, a 21% increase in gross profit, and an 8% increase in EBITDA.

c. Syngenta

Beijing Nudged Syngenta to Withdraw $9 billion Shanghai IPO on Market Weakness

Chinese authorities nudged Swiss agrichemicals and seeds group Syngenta to withdraw its application for a long-delayed $9 billion IPO in Shanghai on concerns about the impact a sizeable new offering would have on a volatile market

Syngenta did state the following:

It will look to restart the listing process, either in China or a different global exchange, when conditions are right. It will also explore alternate sources of funding.

There is weakness in the IPO market, specifically in Asia. However, there is still a desire to gain access to capital so they will continue to look at listing on other exchanges “when the conditions are right".”

Part of the right conditions will be a positive string of quarters for Syngenta. The pull is underscored by Syngenta’s 2023 results.

Syngenta had $32.2 billion in 2023 revenue, down 4% compared to 2022 along with 2023 EBITDA coming in at $4.6 billion or down 18% versus prior year.

Performance, compared to the likes of Bayer and Corteva, was weaker.

The one highlight was in China where they increased revenue by 11% year-over-year, reaching $9.6 billion in 2023, catalyzed by their MAP and digital sales in China that grew 26% compared to 2022.

In the Syngenta biological business sales grew by 11% (part of their Crop Protection unit). This is similar to growth from Corteva in 2023.

ADAMA was the biggest decline, as sales decreased 17% to $5.6 billion for the full year 2023, with significant channel de-stocking, particularly in the Americas, affecting the year.

Syngenta Seeds, along with their China segment, were the most positive segments of their business.

BofA Securities, Morgan Stanley, JM Financial are bankers to the Advanta IPO, the sources said, adding that the company plans to divest nearly 10 -12 percent stake the subsidiary.

The report further mentioned that UPL is likely to use proceeds of Advanta Ent issue for deleveraging. It is likely targeting a valuation of $4 billion.

The company had also planned a rights issue worth over Rs 4,000 crore and in an exchange filing on March 26, it mentioned that it is in the process of completing the necessary formalities and compliances for the same.

Private equity firm KKR invested US$ 300 million for 13.33% stake in Advanta Enterprises Ltd. at a valuation of ~$2.25 billion USD in 2022.

Advanta operates primarily outside North America in crops like Sorghum, tropical corn and sunflower (along with vegetables) in places like LatAm, Australia and Asia. Growth of the business has been strong with revenue and EBITDA growing at 21% and 31%, CAGR respectively over FY20 - FY23.

Growers Edge is a fintech and insurtech based agriculture entity that offers various kinds of financing and insurance (warranty) products.

They recently released this article highlighting some of the traction they are seeing in the warranty market, which heavily emphasizes ag retailers as it focuses on supporting the adoption and utilization of newer input products in the market:

  • Fifty-seven percent increase in retailers utilizing Crop Plan this year vs. last year

  • This year has seen a surge in adoption of the Crop Plan Warranty by retailers, with 14 retailers enrolled, a 57% increase over last year.

  • The Crop Life Top 100 retailers have played a pivotal role in driving this growth trajectory with four of the Top 10 enrolled.

  • This crop season, Growers Edge is set to provide warranties for over 1.1million acres

Non-Ag Resource

Famed investors, Brad Gerstner (Altimeter) and Bill Gurley (formerly Benchmark), started a podcast at the beginning of 2024. It has quickly became a favorite non-ag related podcast for me, focusing on technology and business.

9. Other Interesting Ag Articles