Upstream Ag Insights - July 15th 2024

Essential news and analysis for agribusiness leaders.

July 15, 2024 • Read Time: 16 minutes

Welcome to the forefront of agricultural innovation and strategy with the 224th edition of Upstream Ag Insights, where over 17,050 agribusiness leaders start their week discovering the latest industry news and learning about the latest innovations and business strategies shaping the future of agriculture.

With curation and analysis from Shane Thomas, each edition delivers insights and analysis crafted for the practical agriculture professional, empowering you to be among the best informed in the industry and make superior business decisions.

Whether you're a new subscriber or this email was forwarded to you, Upstream’s field-tested frameworks and in-depth examinations equip you with the knowledge and foresight to seize opportunities and catalyze growth in your business and career.

Index:

  1. The Insight is the Edge: How Insights Drive Agribusiness Performance

  2. Syngenta and Intrinsyx Bio to offer new biological solution to boost crops’ nutrient use efficiency

  3. Moa Establishes Deal for New Herbicide with Nufarm

  4. Understanding and facilitating farmers adoption of technologies

  5. Are You Doing Great Marketing?

  6. AgTech News …So What? July 2024 with Shane Thomas 

  7. ‘Electric prototype tractor sparks discussions; ‘6 hours from the battery is a joke!’’

  8. The Five Deadliest Strategy Myths

  9. Other Interesting Agriculture Articles (6 this week)

This week’s edition of Upstream Ag Insights is brought to you in partnership with DARO and The Combine.

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In January of 2024, I wrote The Insight is the Edge: Why CNH Struggles to Keep Up. This wasn’t intended to be a negative take on CNH, but use them as an example to illustrate that a unique insight and point of view is crucial to establish a vision for a thriving business— following the herd, or waiting for your customer to demand something, often means you are too late or that you are competing in a low margin game.

In the article I stated:

World-class companies lead their customers.

These companies lead their customers based on unique insights.

In most industries, the businesses with the insights have the edge.

In this article we dive into what an insight is, why they matter in agribusiness, why they need to be contrarian while also sharing examples from out of agriculture, within agriculture and approaches for identifying them. Become an Upstream Ag Professional member to learn from the full article:

Syngenta Biologicals, a leader in cutting-edge agricultural biological solutions and Intrinsyx Bio, a Silicon Valley biotech company that promotes sustainable agriculture, today announced a collaboration to bring a novel biological solution to agricultural markets globally.

Syngenta continues to build out their biological offering through a partnership with Intrinsyx Bio.

This collaboration gives Syngenta access to Intrinsyx Bio’s endophyte formulations.

An endophyte is a microorganism, typically a bacterium or fungus, that lives within a plant for at least part of its life cycle. Endophytes form a symbiotic relationship with their host plant, providing various benefits to plants, such as:

  • Enhanced access to nutrients

  • Increased resistance to pathogens

  • Improved tolerance to environmental stresses

Specific types of endophytes are more capable of doing one thing vs. another. Intrinsyx and companies like them select for specific capabilities.

Fior more on Instrinsyx products, patents, and whether this partnership makes sense for Syngenta, become an Upstream Ag Professional member today:

For more on Nitrogen fixing microbes, check out:

Agricultural biotech firm Moa Technology has signed a research and commercial partnership with Nufarm,a global agricultural innovator based in Melbourne, Australia.

Moa has discovered several promising new classes of herbicide through its innovation platform, which are currently in field trials in the US, and Europe.

Moa uses a high-throughput, in-vivo system to rapidly discover new herbicide chemistries and modes of action (MOAs). Their approach involves screening miniaturized whole plants to identify unique plant reactions to potential herbicides, generating predictive data through microscopy, imaging analysis, and AI. This method enables faster and deeper exploration of chemical and biological space, leading to the early identification of novel mode of actions.

The deal will provide Nufarm exclusive access to a new mode of action product.

Moa will receive upfront payments, milestone development payments and eventual royalties from sales of the herbicide.  Nufarm will also exclusively retain the option to commercialize other Moa compounds from the same mode of action area.

For more on why this is important and what we are seeing across the entire industry landscape with incumbent crop protection partnerships, including access to an overview on Eroom’s Law in crop protection and an image of technology companies aiming to speed up crop protection discovery and their partnerships, become an Upstream Ag Professional member today:

I continue to look at different literature and work surrounding technology adoption in farming. There is a lot of complexity that drives whether a farmer buys something, as many have highlighted and I have talked about in articles like The Theory of Innovation Adoption in Agriculture.

This week I was reading an article related to adoption that highlights what the authors talk about as three factors for facilitating adoption: Social (and Personal), Economic and Cultural.

I think the three highlighted factors are important and I also think there are other considerations that layer on top of those, such as geographical nuance, necessary education or appetite for risk. However, I continue to find it notable that there is a lot of work that has identified the same things I have experienced in farmer technology adoption— social, psychological and cultural factors are as important as the economics.

Cultural considerations represent the values and customs that are important to and prestigious to farmers. Some technologies are conducive to farmers’ cultural capital, while others may potentially undermine or renegotiate cultural capital. For example, autonomy could be perceived as an avenue to take away what they love about farming (eg: driving a piece of equipment), eroding cultural aspects of farming.

While cultural capital can be a focus of resistance, it is important to note that cultural components can change over time. Being cognizant of these subtle shifts can be useful in assessing where and when an innovation is ripe for deployment.

Economic aspects essentially means financial aspects and returns (eg: ROI of product, farm solvency etc). Most would agree, this is heavily emphasized and cannot be ignored.

For example, when looking at recent USDA Census data, it illustrates low precision technology adoption:

While precision agriculture technologies, such as variable rate fertilizer applications and yield monitoring, have been available since the 1990s, only 27 percent of U.S. farms or ranches used precision agriculture practices to manage crops or livestock, based on 2023 U.S. Department of Agriculture (USDA) reporting.

However, there is an important breakdown of farms by revenue:

In 2022, the U.S. Department of Agriculture (USDA) estimated there were 2 million farms in the United States, covering approximately 893 million acres. At that time, the average farm size was 446 acres. Smaller farms that produced up to $100,000 in goods accounted for approximately 81 percent of all farms in 2022 but only about 30 percent of all farmland. Large farms that produced $500,000 or more in goods in 2022 accounted for approximately 7 percent of all farms and 41 percent of total farmland.”

In the USDA survey, one farm that produces $1,000,000 in annual revenue is considered the same as one that generates $90,000 in revenue.

For a deeper breakdown on the economics of farm technology adoption based on revenue and relative margins, the impact of sociological, psychological factors and why this is important, and how it played into widely adopted technology and could be considered for future agtech adoption, become an Upstream Ag Professional member:

5. Are You Doing Great Marketing? - Ag Done Different

This is a well-done article from Dan Schultz to help determine if your company is doing great marketing.

In it, he breaks down nine questions for companies to consider:

  1. Does your marketing create new demand or just capture existing demand?

  2. Does your marketing create a “ratchet effect” experience?

  3. Does your marketing develop a significant, new market category?

  4. Does your marketing compel your customers to take action?

  5. Does your marketing create new language?

  6. Is your marketing aimed at the person who can actually say yes?

  7. Does your marketing strike fear into the hearts of your competitors?

  8. Does your marketing create enduring value?

  9. Does your marketing change your all-hands meetings?

What I like the most about Dan’s framework (and his writing in general) is that he elevates marketing beyond the tactical towards the strategic. Marketing gets thought of as click funnels, ad buying or promotional items. This is a gross misunderstanding of what marketing is and the influence it has on an organization.

Marketing and strategy are interconnected.

Your strategy will be ineffective without good marketing. And a poor strategy cannot be fixed by good marketing.

Effective strategy involves making clear choices about where to compete and how to win, and marketing is the reinforcement of these strategic choices— to customers, to competitors, and to the organization.

This integration became clear to me when working in a strategy role and attempting to align with the marketing department: they wanted emphasis and messaging to be something that was inconsistent with where the strategy was heading because of their “marketing strategy.” This created a conundrum.

Strategic coherence is about aligning a company's activities around strategic choices (from Roger Martin, where to play and how to win). Marketing needs to echo these choices in every message, and customer interaction to ensure a unified and effective approach.

With that, another question that Dan is getting at that I think is important to ask is this:

Does your marketing reinforce your strategy?

Strategy is not about being better than your competition; it’s about being different in a way that delivers value to a customer. Marketing is how you communicate and deliver that difference.

There is nuance, because there is going to be different levels of strategy: organizational strategy, business unit strategy and product strategy for example. These are all aligned, yet unique. But it makes the acknowledgement of marketing and strategy alignment applicable beyond those leading organizations and useful for those in an organization managing a specific product line for example.

Last week I joined Tenacious Ventures to discuss some of the events happening in the world of agriculture, including discussions on:

  • Reading the tea leaves on Alphabet’s announcement that it’ll be licensing out the tech built by it’s moonshot Mineral.

  • Why things are heating up right now in the biologicals space and what could be around the corner

  • What’s going on at Benson Hill and what does it mean for the asset-heavy vs. asset-light agtech play going forward

  • Tenacious’ first close of Fund II

Check out the podcast at the link.

For more on Mineral, check out last week’s dive into what’s happening:

There are constantly talks of electric powered tractors, whether it’s from Monarch Tractor’s creating buzz, or what this article started from with Seederal announcing their tractor prototype for 2026, with estimated “savings of €10,000 per year” leading to a lower total cost of ownership.

A quote published on AgWeb in 2023 from John Deere CTO Jahmy Hindman has been stuck in my mind since I read it:

I talked about the 8R tractors….When I ran the numbers on it, if you power that with a lithium-ion battery today, it's twice the volume, twice the weight, twice the mass, and four times the cost.

That has reinforced my view that we are unlikely to see electric tractors enter at the large scale end of the market anytime soon.

Even with that though, I am always cognizant of Wright’s Law.

For an overview of how Wright’s Law plays into agtechnology, and specifically electric tractors, what company we can look to to learn from regarding electric tractors and what it means for the future usage of them, become an Upstream Ag Professional member today:

Non Ag Article

Strategist Roger Martin shares his view on the biggest myths in strategy:

1) A List of Initiatives is a Strategy

2) You can Prove that your Strategy is Correct

3) Analytically Strong People are Better Strategists

4) Strategy is a Zero-Sum Game

5) Strategy is Formulated at the Top & then Executed Below

In the article he elaborates and it’s worth the read for anyone wanting to better understand some misconceptions about strategy.

Other Interesting Ag Articles