Upstream Ag Insights - January 27th 2025

Essential news and analysis for agribusiness leaders.

January 27, 2025 • Read Time: 22 minutes

Welcome to the forefront of agricultural innovation with the 248th edition of Upstream Ag Insights, where over 19,700 agribusiness leaders start their week discovering critical industry news and absorbing the latest must-know information shaping the future of agriculture.

Index:

  1. Beyond Retrofits: The Growing Importance of Tech Stacks in Ag Equipment and the Consideration of Integrated vs. Modular

    1. Looking at Deere, CNH Industrial, AGCO and Retro Fit Precision Ag Businesses

  2. Unlocking Loyalty: The Evolution of Grower Programs in North America with Data from Stratus Ag Research

    1. Are Manufacturers Getting the Results They Want from Their Incentive Programs? 

  3. 3BarBio Announces Concept to Creation, Microbial Delivery Innovation Challenge

  4. 2025 in AgTech… So what? with Shane Thomas

  5. A Distinguished Expert and Senior Science Fellow’s Observations and Insights about Bayer’s DSO Reorganization

  6. Algorithms, Agents and Agriculture

    1. The Future of AI will Transform Everything

    2. AI or die? AgTech leans into the future

    3. How AI Agents Fit Into Agribusiness

  7. AGCO Precision Planting Conference Highlights

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

  9. John Deere Announces its 2025 Startup Collaborators

  10. Reputation Capital

  11. Other Interesting Ag Articles (8 this week)

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

Soil Testing – Your Untapped Revenue Driver

Retailers offering soil testing can boost revenue by up to 20%, driving sales of fertilizers and crop protection products while strengthening customer loyalty. Now open to the public, Farmers Edge Laboratories makes it easy to provide soil testing services to your clients.

  • 1-3 day turnaround for fast results.

  • Planning & Management platform.

  • API Integration to connect with your systems.

  • Fertility recommendations with every test.

  • Custom Reporting with your branding.

  • Labs in Canada and the USA.

This is the year to out-service the competition.

Reserve soil testing for your clients early:

When I first meaningfully wrote about autonomy and automation of smart equipment in August of 2021, I talked about my view that integration in the equipment space will win out. While this view isn’t universally agreed upon, and there is ample rationale to be bullish on multicolor, retrofit solutions, I think it is worthwhile to dive deeper into what "integration” means and why I think this approach is important in the context of equipment manufacturers with precision and autonomous functionality.

Tech Stack’s and the Conservation Of Attractive Profits

First, let’s define tech stack.

The term “Tech Stack” originated in the software development community as a set of technologies an organization uses to build a web or mobile application. It is a combination of programming languages, frameworks, libraries, patterns, servers, UI/UX solutions, software, and tools used by its developers.

It has progressed to be a set of technologies an organization uses to build differentiation.

John Deere enthusiasts will recognize the John Deere tech stack that commonly shows up in their materials (image in full article linked above).

Each layer of the stack is a unique technology and internal capability that Deere has. We will talk more about the “hardware and software” layer in a bit.

Strategy legend Clayton Christensen developed what’s known as Conservation of Attractive Profits:

The law of conservation of attractive profits states that in the value chain there is a requisite juxtaposition of modular and interdependent architectures, and of reciprocal processes of commoditization and de-commoditization, that exists in order to optimize the performance of what is not good enough. The law states that when modularity and commoditization cause attractive profits to disappear at one stage in the value chain, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage.

The Conservation of Attractive Profits starts with a categorization of how all of the different components of a product or service interact with each other: predictable and independent (modular) versus proprietary and interdependent (integrated).

Modular is defined as constructed with standardized units or dimensions for flexibility and variety in use. Integrated is defined as combine (one thing) with another so that they become a whole.

A modular architecture specifies the fit and function of all elements so completely that it doesn’t matter who makes the components or subsystems, as long as they meet the necessary specifications. Modular components can be developed in independent groups or by different companies working at arm’s length.

For the full analysis surrounding dynamics of integration and modularity and how it impacts precision agriculture solutions performance, become an Upstream Ag Professional member today:

  1. Tech Stack’s and the Conservation Of Attractive Profits

    1. Example: Apple iPhone’s vs. Samsung/Android

  2. Systems Over Point Solutions

    1. Example: John Deere ExactShot

  3. Commoditization and Strategic Cores

  4. CNHI Acquisitions of Raven, Augmenta and Hemisphere and Strategic

  5. AGCO the Integrator

  6. Final Thoughts

This week I read the following:

I think evolving incentive programs is a good thing, as a general statement, but I do think there is a lot more nuance than saying their impact is minimal:

While they may generate short-term sales, their long-term impact on customer behavior—and the bottom line—is often minimal.

The data I have looked at from Stratus Ag Research suggests something different, though there is always room for improvement.

For the full breakdown including eight exclusive images from Stratus Ag Research into how programs are perceived by farmers and retailers, how retailers can lean into to supporting programs, companies working to help navigate programs and where the optimal tool to support farmers might lie, become an Upstream Ag Professional member:

Your Unfair Advantage in Ag Retail

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.

AGpilot enables your organization to:

  • Increase Revenue: Acquire more customers, expand customer share, and avoid displacement.

  • Improve Productivity: Quickly view customer info, data, and tailored insights across systems.

  • Reduce Attrition: Provide best-in-class tools to improve agronomist value, income, and relationships.

Transform your advisors into loyal, productive, and trusted advisors at scale with AGpilot.

3BarBio, the only microbial contract development and manufacturing organization (CDMO), today announces Concept to Creation, Microbial Delivery Innovation Challenge. 3BarBio increases grower results and streamlines application with innovative supply chain management and in-field delivery systems.

The Microbial Delivery Innovation Challenge seeks delivery challenges and/or opportunities from microbial companies or ag distributors to maximize or enable living microbial products from development through the supply chain, and to the grower. 3BarBio’s team of microbiologists and engineers will dedicate resources to develop a solution, working alongside the selected company for input and collaboration.

3BarBio is aiming to identify and address novel challenges microbial companies face in successfully delivering microbes throughout the value chain—from production to farm application, and ultimately to the soil/plant:

Some example opportunities might include shelf-life maximization, supply-chain management, co-packing, or equipment integration.

The Innovation Challenge becomes a nice top of funnel lead generator for 3Bar, aggregating companies from around the world, to identify potential partners.

The challenge will identify a winner that will get to work with 3Bar for a ~3-6 month time period where they prioritize developing deliverables to solve the problem, such as a new prototype system.

I have talked about 3Bar as being a company to watch— they can enable a multitude of biological companies, regardless of type (biostimulant, biopesticide) to commercialize their products and improve supply chain viability along with infield performance, all aiming to drive increased biological adoption.

Being apart of the enabling layer of a segment vs. having to find a specific molecule winner is a compelling place to be — classic picks and shovels.

For the full breakdown including how a CDMO fits into microbial agriculture, consideration for smart supply chains and novel access points for agricultural biologicals, become an Upstream Ag Professional member today:

Last week I had a conversation with Sarah Nolet and Matthew Pryor at Tenacious Ventures and we went through several topics, including:

  • The unique macro and micro conditions that are currently contributing to the pullback in corporate venture capital investment in ag, and what these same conditions might mean for startups who are fundraising.

  • The incentives at play in the corporate venture capital space, and how we might expect acquisition and R&D decisions to shift in the year to come.

  • Which five agtech companies we find the most interesting today, and what they’re doing differently from the competition.

Surrounding the last bullet point, we wanted to dive into companies that have had success and look at what they do different and what drives their success.

The discussion was partially inspired by this Linkedin post:

I answered the question through the lens of AgVend and Meristem Crop Performance.

One of the points of emphasis was focus— on a problem, target customer, on a region, and having the discipline to remain focused.

Focus enables companies to move faster, allocate resources more efficiently, and differentiate more meaningfully.

One of the other aspects that I find when talking to great founders is an emphasis on unit economics. I shared the following comment on the aforementioned Linkedin post:

What I think is missing is this: Companies that are Default Alive, as Paul Graham would say.

The economics of a business need to be relentlessly emphasized. The best entrepreneurs in agtech consider the finances and unit economics of the business.

Many businesses fail not because they don't solve a problem, or lack vision, but because they run out of money.

I received a comment back that that should be obvious, but it’s not.

In The Broken Venture Capital System the founder and CEO of Speakia shared the following:

Speakia was everything a startup should be: a product with excellent retention, loyal users, and metrics that surpassed industry benchmarks. But we were a venture-backed company, which meant we lived and died by the fundraising timeline.

In 2022, we were in the middle of raising a funding round when regulatory changes in China sent shockwaves through the market. Investors, already skittish, disappeared overnight. We had a few months of runway left, but no amount of traction or great metrics could save us.

Being “default alive” puts the leadership team in control of their own destiny, freeing them to make decisions that are in the best interest of long term company success. Ironically, focus helps enable a company to get to default alive because they are not allocating resources all over the place— they are only doing what is crucial at any given point in time.

One other aspect I have noted after having InnerPlant CEO Shely Aronov make the following statement to me about how to succeed in collaborating:

“Create a vision for what the future looks like and how the company fits into that future.”

It can be said for painting the vision for customers, too.

Identifying a problem is one thing. Being able to paint the picture of what a future state looks like in overcoming that problem, and why the customer will be apart of and benefit as part of that future is often a difficult to do. The best founders and companies do it well.

This is a well written, thoughtful and direct take by one individual who was working within Bayer throughout the DSO transition. He shares perspective ranging from views on ESG, to DEI, to challenges with timelines of DSO (“sprints”) to effectiveness of DSO:

Many of the excellent Managers who were not terminated were put into individual contributor roles, and often into the groups that they used to Manage. I sat in meetings with 3 of these groups before and after restructuring. The former Managers ran the meetings and were expected to make decisions. This was not because the DSO culture and work skills had not yet developed. It was because the groups understood that the former Managers were best suited to Lead and decide because of experience, knowledge and skills. In these cases that I observed DSO did not move decision making down into self-directed teams, it moved Decision Makers to a lower seat on a different org chart, without a change in compensation or power. The teams found a way to work around DSO.

6. Algorithms, Agents and Agriculture

This week I read several articles on agents in agriculture, including a couple talking about farmers leveraging agents to help run their farm and negotiate crop input prices.

On top, OpenAI announced it’s first agent product, Operator.

Your farm could have an autonomous AI agent that negotiates crop protection product purchases on your behalf. It could pool negotiations with neighbouring farms to secure better deals, managing timing, quantities, and terms – all while adhering to your specific parameters and preferences.

I predict that in the next five years farms will be operated by AI agents, with the farmer still in control,” says Tim Bucher…“It will be a command center that farmers can run their operation from.”

I remain skeptical that this will occur in the next five years— but it is difficult to argue with the rate of change in LLMs and AI.

I think there is still a lot to uncover with agents for farmers.

In the ever-evolving world of AI, LLM agents— autonomous applications powered by Large Language Models—have the potential to evolve how we think about performing day to day task as knowledge workers in agriculture.

Today, there are numerous companies offering an AI interface:

Example Use Cases for Agribusinesses:

Marketing and Sales and the Integration of Systems (agribusiness software specific)

Most agronomic software has integrations with soil testing labs, giving them access to soil data. Often, agronomic software also has connectivity to the ERP, such as Fieldalytics (agronomic software) from Ever.Ag to Merchant (ERP) for example.

If an agronomist or salesperson wanted to explicitly identify which farmers have soils with a low pH and talk to them about a phosphorous solubilizing product, with an LLM Agent built into the software, the agronomist could do a multi-pronged prompt (below) that could save them time while increasing selling ability:

  1. Identify what farmers have fields with soil pH below 5.8.

  2. Draft an email/text specific to each farmer that meets the criteria, stating the agronomic opportunity identified and that you’d like to set a meeting with them to discuss more in depth.

  3. If desired, the LLM could create a precision marketing message draft with the specific product for that farmer.

  4. The Agent could then also create a product order, taking into account the standard rate and acres of each field the farmer has that would need the product.

The agronomist could then review the e-mails, marketing ad created, and customer list before sending it out, and after the conversations with the farmer, simply go into the ERP and adjust the product order accordingly.

The process doesn’t remove the agronomist or their judgment from the process. The e-mails aren’t automatically sent— they are created to save the agronomist time in not only searching for which farmers to approach but also with the message creation and order creation, which could all be adjusted later.

To deliver these sorts of autonomous capabilities, LLM agents will need access to not only integrated agronomic, ERP software and soil testing lab APIs, but also databases (eg: CDMS) for example. This illustrates the importance of interoperability for the future across softwares.

For a full framework to assess the right potential starting point for agents in agribusiness, current shortcomings with agents, and more example use cases for agents in agribusiness, become an Upstream Ag Professional member:

7. AGCO Precision Planting Conference Highlights

I did not attend the Precision Planting Conference, but according to Citi Bank Analysts the following was topical, specifically surrounding their PTx initiatives and dealer engagement:

AGCO management suggested a target to turn ~400 of its Precision Planting dealers into “full-line” precision tech dealers selling retrofit planter, guidance, spraying, etc, solutions for every color of equipment (only ~50 today sell both Precision Planting and Trimble).

It was suggested that AGCO dealers would be “base” PTx Trimble dealers selling basic retro fit kits and guidance systems for their specific brand of equipment.

Additionally, there was seemingly strong interest in AGCO’s latest Cornerstone planting, Symphony spraying, and Outrun autonomous grain cart solutions. Sentiment has indicated that demand for precision ag retrofit solutions could be strong in 2025.

For more on AGCO check out the deep dive on their analyst day from December:

An excerpt insight from the Upstream Ag Professional AGCO Analysis:

AGCO wants to change the model from having the farmer come to the dealership, to be more focused on going to the farm— most dealerships already do service at the farm, but AGCO is emphasizing a few other changes that can shift how a farmer accesses support:

  1. Rethink Dealer and Network Coverage — Instead of larger footprint, asset heavy stores, they want dealers to focus on smaller, asset light foot print and almost hub and spoke, with even parts only locations.

  2. Mobile First, On-farm Mind Set through Mobility — AGCO wants dealers to have upgraded service trucks to ensure technicians can do exactly what is needed on farm.

  3. “Service the farm, not the product” — Part of being brand agnostic and emphasizing a retro-fit strategy means their dealers will be near a lot of non-AGCO brands and AGCO wants to be able to service any brand of equipment once on farm.

  4. Digital Experience — AGCO emphasized digital experiences to access financing, support, buy parts etc. And what caught me by surprise were the stats they shared in they expect 25% of their parts business to be executed online by 2029

John Deere has patents surrounding multiple robots in a field, soil sensing, predictive mapping and more. The John Deere patent portfolio suggests that the future of great agronomy lies with advanced technology that they enable.

John Deere also has patents surrounding what the next evolution of See & Spray looks like, and the capabilities suggest a natural extension to fertilizer, insecticides and fungicides.

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

For a deep dive into the most compelling Deere patents, including images & implications, check out the link above.

Deere & Company announced the names of 6 companies chosen for its 2025 Startup Collaborator program.

2025 companies include:

  • Array Labs – A space technology company building the first constellation designed for frequent, high-quality 3D imaging of Earth's entire surface.

  • Landscan – A digital twin company fusing proprietary soil and remote sensing signals to generate unique analytical insights for the optimization and management of land and its resources.

  • LIDWAVE – A pioneering 4D LiDAR-on-a-chip developer, providing sensing for advanced automation, mapping, and inspection applications.

  • Presien – A physical AI company partnering with OEMs to deliver plug-and-play, on-machine solutions that transform worksite safety and productivity.

  • ReSim – An AI testing company that automates hardware, simulation and replay evaluations, unlocking safer, faster development for autonomy.

  • Witricity – A wireless charging technology for commercial and passenger vehicles, eliminating the hassle of plug-in charging and setting the stage for future autonomy.

Non Ag Article

When making a career change you’re in a massive transition.

That often means going from one world where you’re known and have a track record and reputation to a new world where you’re nobody. This is true when you go from student to working person. This is true when you get a major promotion.

Every time you choose to do something different, you’re gonna feel some insignificance.

Other Interesting Ag Articles