Upstream Ag Insights - August 21st 2023

Essential news for agribusiness professionals

August 21, 2023 • Read Time: 13 minutes

Welcome to the 182nd edition of Upstream Ag Insights!

Index for the week:

  1. Solinftec and the Solix Autonomous Platform: Reimagining Farming from First Principles

  2. The Mosaic Company Unveils Mosaic Biosciences™ to Expand Offerings in Plant Health

  3. Yara Capital Markets Day 2023 Highlights and Analysis

  4. Sound Agriculture Releases Software Package to Democratize Epigenetic Data in Plant Breeding

  5. Yard Stick Raises $10.6M for Soil Carbon Measurement Technology

  6. Q2 2023 Agribusiness Earnings Highlights and Analysis

    1. It’s Time to Digitally Connect the Supply Chain

    2. John Deere Q3 2023 Results

  7. Will the Convergence Between Artificial Intelligence and Precision Agriculture Lower Farming Costs?

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1. Solinftec and the Solix Autonomous Platform: Reimagining Farming from First Principles - Upstream Ag Professional

In August of 2022, Solinftec announced a new product offering, the Solix.

The Solix is a solar-powered autonomous platform that is not only equipped with cameras to acquire data about the field but also equipped with the capability to spray— specifically weeds that it identified within the crop.

In April of 2023, Solinftec announced the Hunter, further features for the Solix platform, this time equipping the platform with the capabilities to lure, detect and eradicate insects autonomously using a specific light frequency.

The crazy part about this robotics platform is that it only travels at 1mph— a far cry from the expectations that a piece of spray machinery has to travel at 12-16mph to be considered efficient throughout the industry today. My immediate questions was: What is their train of thought with this?

I reached out to Solinftec in June to see if they would be open to giving me a demonstration of their Solix platform, and they generously allowed me to join their team for a day in early August, sharing a demonstration of the Solix platform in a field in southern Indiana where I was afforded the opportunity to talk with their engineers, product teams and executive leaders about what they have built and how they will progress it in the future.

This week for Upstream Ag Professional members I did a deep dive on Solinftec, their technology, their business model, and what it means for the entire value chain— whether you are a farmer, a retailer, a seed and crop protection manufacturer, an equipment manufacturer (tractor or irrigation), I strongly believe what Solinftec is doing is worth being aware of to understand how it impacts you and yours business.

This week I dive into those implications.

The Mosaic Company announced today the formation of the Mosaic Biosciences™ platform, a global initiative to bring the latest science and innovation to the agriculture market. The technologies from Mosaic Biosciences enhance crop health and support the natural biology in plants and soil, ultimately maximizing the yield potential of every field. 

In February of 2022, Mosaic purchased Plant Response to officially enter the realm of biological crop inputs. Mosaic also has collaboration agreements in place with the likes of Bioconsortia.

Plant Response was a roll-up of biological-based crop inputs and technologies, including Koch Biological Solutions (2019), Pathway BioLogic (2020), and WISErg (2021). Their portfolio consisted of 16 commercialized products.

This week Mosaic renamed its biological division to Mosaic Biosciences.

In the Upstream Ag Professional analysis I break down aspects of Mosaic’s ability to grow in novel product markets, the foundations of their success, how it has impacted their financials and how their move into biologicals is positioned compared to the likes of crop protection companies.

Recently, Yara participated in a Capital Markets Day where they shared an update on their progress towards their 2023 goals from a 2020 ESG Seminar. It was very telling surrounding the Yara business.

Yara Capital Markets Day 2023 - Yara International

I go over three basic areas:

  1. Digital Farming Solutions

  2. Regenerative Agriculture Association

  3. Outcome-based pricing

Digital Farming Solutions

I covered the ESG Webinar in Upstream in 2020 where the original had actual numbers associated with it:

If we zero in on Farming Solutions, they targeted $300-$600 million in NEW EBITDA!

However, now they don’t state where this number is and how they are tracking.

Yara had a view of carbon offsets and new business models driving this new EBITDA.

I think this was the wrong frame, and I called it out in the 2020 write-up. Yara is now leaning that direction, stating:

New revenue streams less apparent, however offerings strengthen ability to extract value through premiums in core

This is classic picks and shovels.

For more on where Yara missed with their KPI’s, how they should be focusing and background on their outcome-based pricing initiatives and portfolio tie into regenerative agriculture, become an Upstream Ag Professional member:

A team of researchers at Sound Agriculture has released a new software package, called sounDMR, designed to reveal epigenetic variation in plant populations. The findings, published today in Scientific Reports, showcase the potential of sounDMR to enable high-resolution epigenetic profiling of plants without the need for expensive equipment or complex library preparations, fostering new opportunities in plant breeding.

Yard Stick PBC, a soil carbon measurement technology company, today announced $10.6 million in Series A funding. Toyota Ventures Climate Fund led the round, with additional investors including the Microsoft Climate Innovation Fund, The Nature Conservancy, Lowercarbon Capital, Breakthrough Energy Ventures, Pillar VC, and an extended group of climate-committed founders, angels, and family offices. This brings Yard Stick’s total venture capital funding to more than $16 million.

Yard Stick is working to measure soil carbon in real time. To do so, they have created a solution made up of a combination of software and hardware:

  • Yard Stick’s spectral hardware eliminates the need to get cores, bags, and use labs. Using decades of soil science the company’s handheld device measures soil organic carbon to up to a meter in depth.

  • Yard Stick’s stratification engine provides automatic stratification of project fields and creates statistically-sound sample plans which satisfy the complex requirements of any major soil carbon protocol

  • Yard Stick’s field data platform collects measurement data in real time, ensuring project data are secure, auditable, and instantly available to any other project stakeholder. Users can access a live dashboard of soil carbon measurement data to rapidly understand project progress, quantify stocks and changes, and share this information with key stakeholders including participating growers, registries, verifiers, commodity buyers, and corporate carbon buyers.

Essentially, Yard Stick has a probe at the tip of what’s essentially a foot-and-a-half-long drill bit. Yard Stick then uses spectroscopy to determine how much carbon is in the soil.

For those that missed last week’s Highlights and Analysis of the Q2 2023 Agribusiness earnings.

Key Takeaways

  • “Destocking” of crop protection products in the channel leading to decreased sales for all crop protection manufacturers.

  • Fertilizer companies earnings come back down to earth. However, they are still relatively high when looking at 2021 earnings.

  • On the equipment manufacturing front, tractor sales were up and pricing was up. On the irrigation equipment front, sales were down, but margins were flat to up.

AgVend CEO Alexander Reichert tied the takeaways from the crop protection destocking and shared his view on how digital tools can help alleviate this challenge in the future:

Deere only released their earnings this week, but as expected, they were consistent with their equipment manufacturing counterparts in having a solid quarter:

Deere & Company reported net income of $2.978 billion for the third quarter ended July 30, 2023, compared with net income of $1.884 billion, or $6.16 per share, for the quarter ended July 31, 2022. For the first nine months of the year, net income attributable to Deere & Company was $7.797 billion, or $26.35 per share, compared with $4.885 billion.

Earnings were strong for Deere, primarily from increased pricing and primarily in the Production and Precision Agriculture segment:

This is a comprehensive breakdown of how precision technology can decrease traditional costs of on-farm production.

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Most decisions aren’t made on a spreadsheet, where you just add up the numbers and a rational answer pops out. There’s a human element that’s hard to quantify, hard to explain, and can seem detached from the original goal, yet carries the most influence.

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