Upstream Ag Insights - August 14th 2023

Essential news for agribusiness professionals

August 14, 2023 • Read Time: 11 minutes

Welcome to the 181st Edition of Upstream Ag Insights!

Index for the week:

  1. Q2 2023 Agribusiness Earnings Results Highlights and Analysis

    1. Including Bayer CEO comments on culture evolution and Farmers Edge shift in crop input marketplace business model

  2. Bushel 2023 State of the Farm Report

  3. Bushel Extends Series C with $26.25m Raise 

  4. Phospholutions Raises $10.15M and What Might We Learn from Anuvia?

  5. Technical Debt in Agriculture: Who’s Responsible? And How Does Agriculture Compare to Other Industries in Spend as a Percentage of Revenue?

  6. Digital Marketing Strategy for Driving Efficiency and Building Stronger Relationships

  7. Meristem Announces Its Next-Generation Bio-Capsule Technology 

  8. 19 Active Ingredients Coming Off Patent by 2028

  9. Finding Product Market Fit in AgTech with Alain Goubau, CEO of Combyne Ag

  10. The Strategy Lesson from the Bud Light Fiasco

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Your Competitors Already Are.

This week I highlighted publicly traded agribusinesses’ Q2 earnings.

Upstream Ag Professional members get access to highlights from each of the companies listed below along with three macro takeaways for the industry from synthesizing dozens of earnings reports along with investor call transcripts.

On top, there is an overview of Bayer CEO Bill Anderson’s comments surrounding culture and an overview of Farmers Edge new crop input marketplace revenue model.

In order of appearance:

  1. BASF

  2. Bayer Crop Science

  3. Corteva

  4. FMC

  5. Nufarm

  6. Nutrien

  7. Yara

  8. Mosaic

  9. American Vanguard

  10. AGCO

  11. CNH Industrial

  12. Lindsay Irrigation

  13. Valmont Industries

  14. Farmers Edge

Syngenta and John Deere have not released their earnings for Q2 yet.

This week Bushel released its 2023 State of the Farm Report.

It’s a well-done survey that delivers some insights into how farmers think about various topics such as grain marketing strategy, technology use, sustainability programs, and more.

In it I dig into opportunities for grain origination businesses, crop input retails and agronomy consultants along with what the farmer commentary could mean for the future of Bushel’s business.

I do not cover the entire report, so I encourage all who are interested in any of the aforementioned areas to download the entire report.

This is not an announcement by Bushel, but a filing I found through the SEC (Securities and Exchange Commission) website.

According to the filing, Bushel raised $26.25 million.

Bushel has now raised a total of $114.85M in funding through 8 rounds. Their last major funding prior to this was in April of 2021 and was a $47M Series C round, with an extension of $8M later that year.

In the Upstream Ag Professional edition, I break down why the raise is notable, Bushel’s burn rate, what it indicates about the start-up’s operating in agriculture and what lies ahead for Bushel’s business.

4. Phospholutions Raises $10.15M Round - Upstream Ag Professional

Phospholutions secured an additional $10.15 million in funding, bringing its total funding to date to $32.5 million. Phospholutions technology is contained in the product Rhizosorb, a product targeted at increasing phosphorous uptake efficiency by the crop.m

There is a lot of interest in nitrogen efficiency— whether through N fixation or environmentally protecting nitrogen from losses via coatings or nitrogen stabilizers applied upstream in the manufacturing process (eg: Super U from Koch) or applied at blending before being put onto the field, such as through Agrotain products.

What gets less attention is phosphorous. But it is typically the third most abundant nutrient needed by crops (after nitrogen and potassium) and the second highest in terms of removal (within the grain harvested after nitrogen). That means it needs to be replaced within the soil.

Phosphorous is fickle, though. It is extremely inefficient at getting taken up by crops; depending on the research you want to cite, roughly 30% of P applied gets used by crops in the year of application. The availability of phosphorous to crops is highly influenced by other soil ions, such as aluminum or calcium, depending on soil pH. This also leads to situations where P is in the soil and removed via surface water run-off, where we end up getting problems such as algal blooms.

In the Upstream Ag Professional member article, I dive into the technology, the business model and the future of Phospholutions through the lens of how they go to market today, who they could be partnering with, including groups outside the fertilizer industry and what we can learn looking at their capex through the lens of Anuvia.

I really enjoyed Steven Cubbage’s original article on technical debt earlier this year. He was right, it is a significant risk for the industry.

In his follow-up, though, he points to the opportunity for change at farmers. I am not sure farmers are the ones that can influence much, though.

Most farmers I know do not have developers that build digital or IT systems. And technical debt is primarily code based.

In the Upstream Ag Professional Edition I dive into what technical debt is, who’s responsible within the agriculture value chain and how the agriculture industry compares to all other industries today with an Upstream Ag Professional only-chart.

This is a well-written article, consistent with a strongly held belief I have in driving retail success.

In the Upstream Ag Professional member edition there is an overview on precision marketing and how it can be leveraged within agribusinesses in a more strategic way.

In September 2022, Meristem announced their Bio-Capsule technology.

This product from Meristem Crop Performance, a company that sources, formulates and delivers crop inputs to farmers (primarily) outside the traditional channel retail channel, had a couple interesting aspects to it.

The Bio-Capsule Planter Box Delivery System, is a packaging system designed to carry, protect, and dispense a multitude of biologicals into a seed lubricant blend plus micronutrients.

This week Meristem announced the new Bio-Capsule improvements, including 

  • larger capsules with more space for microbes to eliminate clumping, caking or sticking.

  • more dispenser teeth and easier material release

  • self-locking nuts ensure Bio-Capsules stay fixed in the lid

  • larger, easier-to-push buttons

  • larger robust pail with a clear pour side, metal handle, and pour-assist grip

In the Upstream Ag Professional Edition, I highlight why this is important for Meristem along with why it is a differentiated medium to deliver inputs to the crop and how it drives the future of crop inputs.

The generic crop protection market is on the verge of significantly expanding over the next several years.  From 2023 to 2028, there will be 19 active ingredients (AIs) that are coming off patent, according to S&P Global. This includes 11 fungicides, four herbicides, and four insecticides. Next year will be especially active in the post-patent market, with 12 AIs expiring.

The list includes the following:

2023

  • Bixafen (Bayer Crop Science)

  • Isopyrazam (Syngenta AG)

  • Mandipropamid (Syngenta AG)

2024

  • Chlorantraniliprole (Corteva/FMC)

  • Flubendiamide (Bayer Crop Science)

  • Fluopicolide (Bayer Crop Science)

  • Fluopyram (Bayer Crop Science)

  • Penflufen (Bayer Crop Science)

  • Penthiopyrad (Corteva Agriscience)

  • Pyroxsulam (Corteva Agriscience)

  • Saflufenacil (BASF)

  • Sedaxane (Syngenta AG)

  • Thiencarbazone-methyl (Bayer Crop Science)

2026

  • Cyantraniliprole (Corteva/FMC/Syngenta)

  • Pinoxaden (Syngenta AG)

2027

  • Sulfoxaflor (Corteva Agriscience)

2028

  • Benzovindiflupyr (Syngenta AG)

In the Upstream Ag Professional Edition I highlight some of the strategies manufacturers will use along with breaking down the incredibly deep approach FMC has undertaken to protect their two diamide active ingredients, plus what it means for retailers and how see and spray could impact companies approaches.

Many founders make building a product and go-to-market approach sound easy.

But it’s incredibly hard. And it often takes numerous iterations to get right.

Alain Goubau was originally part of Combyne when it was FarmLead, a Canadian grain marketplace. FarmLead eventually pivoted their business model and changed their name to Combyne (I have covered them here) and then was acquired by Bayer earlier this year.

In this podcast Alain breaks down the realities of not only product-market fit and pivoting a business, but the challenges of marketplace models in agriculture, specifically grain.

There is a ton to learn by listening to Alain’s experience in building Combyne, I highly recommend giving this podcast a listen.

Non-Ag Article

Segmenting customers is top of mind for me often and Roger Martin does a great job using Bud Light to bring strategy and segmentation to life.

Other Ag Articles