Upstream Ag Insights - January 20th 2025

Essential news and analysis for agribusiness leaders.

January 20, 2025 • Read Time: 23 minutes

Welcome to the forefront of agricultural innovation with the 247th edition of Upstream Ag Insights, where over 19,600 agribusiness leaders start their week discovering critical industry news and absorbing the latest must-know information shaping the future of agriculture.

Index

  1. FMC Restructures VC Arm: What does it mean and what are the implications?

  2. Monopolistic Inertia in the Agribusiness Value Chain

  3. Five Technology Patents from John Deere and What They Might Mean for the Future of Precision Agriculture

  4. US FTC Sues Deere Over Equipment Repair Restrictions

  5. Empowering Farmers Through Innovation: John Deere Expands Self-Repair Solutions, Furthering Farmer Independence

  6. John Deere Brings Enhanced Machine Connectivity to Farms with the Release of JDLink® Boost

    1. Deere's Software-as-a-Service Model with Matt Percy

  7. CNH rolls out new AI tool for instant customer support

  8. Pivot Bio Expands Retail Network with Logan Agri-Service

  9. Sentera Unveils SmartScript™ Weeds, Formerly Aerial WeedScout, with Enhanced Features for 2025

    1. Sentera to Launch Precision Weed Management Service: Is it a See and Spray Killer?

  10. The Future of Canola Could Lie in its Components

  11. Illustrative AgTech Insights: The Last Mile Driving Product Decisions in Agribusiness

  12. Other Interesting Ag Articles (7 this week)

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FMC Corporation has changed the organizational structure of its VC investment arm FMC Ventures, letting go of staff in the process.

Mark S. Brooks, managing director of FMC Ventures, confirmed that all three members of the FMC Ventures team would see their roles eliminated.

AgFunderNews reached out to FMC Corporation and received the following response from executive vice president and CFO Andrew D. Sandifer:

“FMC remains committed to innovation in agricultural technology. While we have made changes to our organizational structure to optimize operations, FMC Ventures continues to operate and manage its existing portfolio of investments under the leadership of Zack Zaki, Vice President of Corporate Strategy & Development.”

The FMC news, shared by AgFunder, came in the same week that Intel announced a spin-off of its corporate venture capital arm.

In December, Bayer and Trendlines announced the initiative to dissolve their joint AgTech Fund.

When assessing that news, I shared the following:

It’s unlikely that Bayer and Trendlines will be the only discontinued AgTech fund.

CVC wasn’t where that comment was specifically targeted at, but CVC is not exempt from needing to consider the current financial landscape agriculture companies find themselves in. There is a similarity between the spin-off of Intel Ventures and the “structure change” at FMC Ventures— the businesses invest off of their own balance sheet and are not in a strong financial position and when your business is not in a great place it becomes difficult to justify capital allocation to riskier areas that are unlikely to drive any short term upside.

FMC is currently one of the most shorted stock on the S&P 500 and the destocking issues in LatAm remain particularly challenging, a region where over ~33% of FMC business is derived and their fastest growing geography.

R&D Cuts

FMC isn’t just deprioritizing VC investment. They are deprioritizing innovation investment overall.

In the Q3 2024 Crop Protection & Seed Earnings Themes, Highlights and Analysis I highlighted FMC commentary on cutting costs and the main area for 2024 was R&D expenditure. The plan was for about $50 million according to the earnings call, with the primary amount coming out of R&D expenditure, which would be about 15% of their 2023 expenditure.

FMC CEO Pierre Brondeau put some spin on the change, suggesting it was an efficiency effort in the early part of the discovery process.

But FMC doesn’t operate in a vacuum. All of their competitors have access to, and do leverage, similar tools and processes. FMC competes against all of these entities spending more than them on R&D:

FMC has not proven they are any more effective than their largest competitors at commercializing R&D discoveries.

Consider this stat from their 2023 annual report:

Approximately $590 million in 2023 revenue came from products launched in the last five years, representing 14% of the total revenue.

That percentage is not objectively better than competitors— UPL had the same percentage as FMC in 2023 (at lower total R&D spend).

In 2023, 39% of FMC revenue comes from two active ingredients acquired from DuPont when they merged with Dow to form Corteva (the diamides), with Rynaxypyr alone making up almost 80% of the diamide business, which means around $1.4 Billion, and >30% of FMC revenue comes from one molecule.

That suggests they will need innovation in the coming decades.

For the full Upstream Ag Professional article, including five images, a look at what FMC Ventures contributed to FMCs innovation pipeline, whether we will see other CVC shut downs, consideration for CVC internal structure and a framework for looking at whether crop protection companies are innovation first, or distribution companies, become a member today:

The agrifood value chain is highly consolidated upstream and downstream with farmers sandwiched in between.

Ariel Patton at Topsoil shared an image in Get the lay of the land with the Ag Value Chain that conveys it well (image shows up in the full article linked).

The most accurate way to describe various points in the value chain is oligopolistic in nature.

When this occurs in a value chain, incentives to drive change or evolve tend to decrease and the mindset shifts to a scarcity mindset, which emphasizes not losing vs. trying to win by being different.

That creates inertia to resist change because incentives at all points of the value chain and reinforce the status quo— when all segments have little incentive to evolve, there is a risk of getting stuck between a rock and a hard place.

Monopolistic Inertia refers to the phenomenon where oligopolistic firms, dominating sequential points in a value chain, develop a mutual reliance, reinforcement and benefit of their established roles, behaviors, and practices. This interconnected dependence discourages innovation or evolution within an industry, leading to only incremental improvements instead.

The challenges for breaking through in agtech have been immense. I have been thinking about what some of the challenges are that are that are less obvious. In doing so I identified a concept that I am calling monopolistic inertia. For the full Upstream Ag Professional overview of what monopolistic inertia is, why it is important in agribusiness, check out the link above - available for all Upstream Ag Insights subscribers.

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Index:

  1. Overview

  2. Field of Bots: John Deere’s Robot Patent

  3. Robotic Evolution: John Deere’s Multi-Legged Design for Smarter Farming

  4. Precision Unleashed: John Deere's Vision for Smarter Soil Testing

  5. Real-Time Soil Intelligence: John Deere’s Soil Prediction Maps

  6. The Next Evolution of See & Spray: Targeted Plant Spray Application

  7. Final Thoughts

Overview

Deere & Company was founded on innovation and solving unique problems.

John Deere, a blacksmith, set up a blacksmith shop in Grand Detour, Illinois and began working on tools and equipment for the local farming community — pitchforks, shovels etc.

What he noticed of his customers were their struggles with the sticky, heavy Midwestern prairie soil, which clung to the wooden and cast-iron plows designed for sandier soils. After each pass, farmers had to stop and scrape off the soil by hand, making plowing slow and even more labor-intensive.

Deere’s breakthrough came in 1837, when he made a plow out of a broken saw blade. He shaped and polished the steel blade, giving it a curved design that allowed the soil to slide off easily. This "self-scouring" plow proved to be revolutionary. It significantly reduced the effort required to prepare the land for planting and became an instant success among local farmers.

That was nearly two centuries ago, and the company has introduced technologies that empower farmers to increase efficiency, enhance precision, and tackle modern challenges— whether through engineering, software, artificial intelligence, new services (eg: John Deere Financial) or business model innovation. These innovations not only help farmers optimize their operations but also drive progress across the broader agricultural industry.

One indicator of how a company envisions the future is its patent portfolio.

Patents can offer a window into the innovation, strategic priorities and emerging technologies a company is investing in to evolve its products and services. While many may never come to fruition in a commercial state, and sometimes the patents are defensive in nature, it gives a view into what the company is thinking about.

For John Deere, some patents that stood out to me showcase their commitment to advancing precision agriculture, robotics, and the role of soil in crop production.

For the full deep dive into John Deere’s patents and the implications, become an Upstream Ag Professional member:

At Upstream Ag Insights, we’re launching a new series designed to peel back the curtain on the innovation driving agribusinesses forward: their patent portfolios.

We’ll analyze what each patent represents—breaking down how these innovations could impact farmers, reshape agribusiness strategies, and shift the industry’s trajectory.

But that’s not all. As this series unfolds, we’ll connect the dots:

  • Highlighting collaboration opportunities between companies,

  • Spotting shared innovation themes across competitors and industry segments

  • And uncovering the bigger picture behind individual patents.

To kick things off, we’re diving deep into the patents of Deere & Company, one of the most influential players in agriculture.

If you want to dig even deeper, the full patent documents are attached to this article.

This new series promises insights you won’t find anywhere else, helping you think strategically and stay informed about the future of agribusiness.

The U.S. Federal Trade Commission on Wednesday sued farm equipment maker Deere, alleging it illegally drives up repair costs by forcing farmers to rely on its authorized dealer network.

The lawsuit argues Deere has unlawfully boosted profits by requiring farmers to use its network of authorized dealers for repairs, making it difficult for farmers to use independent mechanics or do repairs themselves, the FTC said in a press release.

Much of Deere’s new equipment requires software to diagnose and repair electronic problems. The information needed to create that software is only available to Deere, according to the lawsuit. By making this available to only Deere dealers, farmers have to go to Deere dealers for repairs rather than completing the repairs themselves or with a third-party technician, reducing farmers’ ability to receive timely service and/or increasing costs.

Deere denies any wrong doing, stating:

This lawsuit ignores the Company’s long-standing commitment to customer self-repair and the consistent progress and innovation we have made over time, including the launch of Equipment Mobile in 2023 and the previously announced launch of new capabilities for John Deere Operations Center later this year. The complaint is based on flagrant misrepresentations of the facts and fatally flawed legal theories, and it punishes innovation and pro-competitive product design. John Deere will vigorously defend itself against this baseless lawsuit.

The day before the FTC suit was officially announced, Deere released the following:

John Deere announced another significant step forward in supporting customers' ability to maintain and repair their machines across the agricultural and construction industries. The latest addition to Deere's suite of digital solutions will further empower customers and independent repair technicians by, among other things, enabling them to reprogram Deere-manufactured electronic controllers.

These new capabilities will be integrated into the John Deere Operations Center and will offer comprehensive solutions for diagnosing and repairing equipment while ensuring machine reliability, safety, and compliance.

Deere announced the expansion of its customer tools, including:

  • John Deere Bookstore for viewing operators' manuals for free and purchasing technical manuals;

  • Quick Reference Guides and instructional videos for maintenance tips;

  • Shop.Deere.com for finding and purchasing parts online;

  • John Deere Operations Center™ for managing farm data, maintenance, and machine information;

  • Customer Service ADVISOR™ for digital manuals, and for clearing and refreshing codes, taking diagnostic readings, and performing limited calibrations; and

  • Equipment Mobile this free app is a one-stop-shop for machine information including operators and parts manuals, maintenance plans, quick reference information, trouble code lookup, and software updates on select 4G connected machines.

I’m not a lawyer so I won’t speculate on what will happen. However, I like to look at incentives. And the incentive for Deere to protect their dealers profitability remains.

Deere places a lot of value on their dealership network, it is a differentiator for them. According to their 2024 Annual Report, through the U.S. and Canada, they have ~1,600 that sell ag equipment.

The more Deere can do to support dealer success, the better off Deere will be, too, for current business models and future ones.

For a look at the importance of Deere dealers, the economics of dealerships and why the incentive is for equipment manufacturers to drive customers to the dealers, become an Upstream Ag Professional member:

John Deere announced today the release of JDLink® Boost™, a satellite connectivity solution to ensure customers continue seamless work in fields with little to no cellular coverage. The new JDLink Boost option supports the partnership, announced a year ago, between John Deere and Starlink by SpaceX network, providing farmers who face rural connectivity challenges with the opportunity to fully leverage precision agriculture technologies.

JDLink Boost enhances connectivity in fields with limited cellular coverage, providing secure, faster access to machine and agronomic data. This real-time connection supports timely agronomic, while powering precision ag technologies like in-field data sharing for optimized resource use, AutoPath, and remote monitoring to address inefficiencies. Solutions like See & Spray can now do immediate data analysis and action. Connected support tools, including Expert Alerts™ and Remote Display Access, improve collaboration between farmers and dealers for faster issue resolution.

For more on the news, check out the Upstream Ag Professional breakdown from January 21st 2024 when the initiative was announced.

Related: Deere's Software as a Service Model with Matt Percy - Software is Feeding the World

The CNH AI Tech Assistant tool is already at work at over 300 authorized agriculture and construction dealer groups in North America, Australia and New Zealand, with global expansion underway. It works by simulating conversations to provide a diagnosis and repair plan for CNH brands’ machines. This first-of-its-kind tool was developed with dealer feedback.

This tool enables dealer technicians to save time on repairs by providing fast and accurate answers to technical questions.

Pilots are already underway in Australia and New Zealand with internal CNH employees familiarizing themselves with it in Brazil and Europe as a step towards piloting. The tool is set to be live in four of our regions by March, 2025.

AGCO previously has talked about similar initiatives within their business, and we can extrapolate that the Deere news this week includes the same.

There are third-party players offering similar functionality in Brilliant Harvest and T1 Technology Corp.

Pivot Bio is proud to announce a retail distribution partnership with Logan Agri-Service, Inc., an independently owned and operated supplier of agricultural crop inputs headquartered in Griggsville, IL. Through this partnership, PROVEN® 40, a microbial nitrogen solution powered by Pivot Bio’s patented gene-edited technology, will be available across all of Logan Ag’s locations, providing corn farmers throughout the network with an advanced nitrogen solution that complements Logan Ag’s trusted lineup of products and services.

Pivot Bio announced its first retail partner, Hefty Seeds, in December. When I covered that news in the December 22nd 2024 Edition, I broke down the importance of this strategy shift and talked with Pivot Bio CCO Chris Turner who stated that we could expect more retail partner announcements in the future, so I expect this is the second of several more.

Sentera announced key updates to its Aerial WeedScout platform, including a rebranding to SmartScript™ for the 2025 growing season. This name change underscores Sentera's commitment to delivering actionable, prescription-driven insights that empower farmers to optimize their operations.

The advancements from Sentera are nice additions to their service offering, including weed classification, weed size detection, and stand counts, along with a name change.

The offering is compelling, though I still have questions about the potential of the service offering in the context of an expanding precision spray product market. The details of the service, along with how it compares to integrated precision spray systems can be read in the below article:

"Oil and protein content in canola can be increased while reducing fiber" Nichol explained…"Every increase in oil has multiple benefits," she noted, highlighting how it enhances farmers' price and market opportunities, supports processors' crush margins, and strengthens export markets. Breeding strategies must take a holistic approach, balancing the need for new opportunities with maintaining critical traits. "We can’t prioritize one factor over another—we can’t choose yield at the expense of disease resistance or genetic gains at the cost of oil content. All of these must be addressed concurrently, which presents a fascinating challenge," she concluded.

This article reinforces a breakdown from last week’s edition where I stated the following:

Historically, it has been challenging for companies like Corteva to participate in the upside of feed or food based traits because farmers are often not paid based on quality parameters (eg: oil content of soybean or canola, protein content of meal) and commodity giants like Cargill and ADM are focused on efficiency in moving commodities and actively avoid moving in that direction for simplicity.

When Corteva directly partners with companies like BP, it incentivizes them, and enables them to participate in the upside of the value the traits create even more than yield traits— if a Corteva winter canola variety has higher oil content, that’s a higher processing output for their JV with BP, increasing their upside.

As a notable aside, the USDA provided detail on valuing subsidy associated with Feedstock and Greenhouse Gas Emissions. Camelina, Covercress and Winter Canola are not committed to, but being considered at this time:

Intermediate oilseeds (for example, camelina, carinata and pennycress) and canola were excluded from this rule given their current limited use in domestic biofuel production and because there is insufficient data on how CSA practices affect the GHG emissions associated with their production.

There is also consideration surrounding enhanced efficiency fertilizers and biostimulants.

  1. Ag Equipment Intelligence Brand Loyalty Survey

  2. Stratus Ag Research Boosting Ag Retailer Success Survey Data

  3. Stratus Ag Research Biostimulant Route to Farm and Customer Product Perception

  4. Direct-to-Farmer Models

    1. Pivot Bio

    2. Indigo Ag

    3. Meristem Crop Performance

    4. Swarm Farm

  5. Experience Mapping

  6. Friction Reduction

  7. Final Thoughts

This edition of Illustrative Agtech Insights includes four images from exclusive survey data that is valuable to understand the influence of localized farmer support on product and brand utilization. Then the article dives into a framework for thinking about the customer experience.

Non Ag Audio

One of the best books I have recently read is Boom: Bubbles and the End of Stagnation by Hobart and Huber. It explores the decline in technological and scientific progress since the 1970s, contrasting it with earlier periods of rapid innovation driven by bold investments and FOMO, such as the Manhattan Project and Apollo program.

The authors argue that speculative bubbles are essential drivers of progress by creating environments for risk-taking and experimentation. They highlight historical and modern examples, including Moore’s Law and Bitcoin.

The podcast provides a nice overview of the book in discussion with the authors.

Other Interesting Ag Articles