Upstream Ag Insights - July 22nd 2024

Essential news and analysis for agribusiness leaders

July 22, 2024 • Read Time: 24 minutes

Welcome to the forefront of agricultural innovation and strategy with the 225th edition of Upstream Ag Insights, where over 17,100 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. Precision AI unveils their new UAV design: A Transformation of Input Application?

  2. Control the Narrative, Own the Outcome: What Agribusiness Professionals Can Learn from Chuck Magro, David Friedberg and John Deere

  3. Farmwave Illustrates Harvest Loss Management Capability and Future Potential

  4. We Need to Talk About Climate Inc and Yara International Q2 2024 Announcement

  5. Syngenta collaborates with Ginkgo Bioworks to enable faster launch of innovative biologicals

  6. ICL and Lavie Bio Leverage Artificial Intelligence to Make Advancement in Development of Bio-Stimulants

  7. Can GenAI really predict the future of crop yields? Ask Cropin

  8. Biome Makers Launches BeCrop Farm

  9. Hick’s Law – Why Fortune Favors the Focused

  10. Other Ag Articles (7 this week)

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

ALAN, the ALA Navigator by ALA Engineering, is cutting-edge intelligence behind feedlot operations, combining advanced software, sensors, and computing power to autonomously feed cattle with precision and efficiency. 

Why ALAN?

  • Autonomous Feeding: ALAN takes over the complex task of feeding cattle, ensuring optimal nutrition and management with minimal human intervention.

  • Integrated Technology: Paired with ALA Engineering's custom feed truck chassis and powertrain, ALAN enhances truck efficiency and extends its lifespan, providing a robust and durable solution for feedlot operations.

  • Future-Ready: Embrace the future of agriculture with ALAN’s innovative approach, streamlining operations and boosting productivity like never before.

ALA Engineering is currently a startup in The Combine AgTech Incubator, which supports and accelerates the growth of innovative agricultural startups, helping them bring cutting-edge solutions to the market, in both crop production and animal agriculture.

There is a growing presence of drone products and companies for crop protection application, with new systems delivering various ranges of endurance, payload capacities and styles of application.

The drone growth is driven by several factors, including the desire for precision agriculture practices, regulatory improvement and compliance measures, pursuit of cost efficiency and operational flexibility, concerns regarding environmental impacts, as well as demonstrated performance and positive return on investment.

Drones have seemingly begun to rise from the doldrums of the hype cycle.

Among these innovators driving drone technology ahead, Precision Ai announced the development of a new flexwing drone system.

Ag Drone and Stratus AirSprayer Overview

Precision Ai has announced a unique take on a drone application system:

Source: Precision ai. Image from of prototype demonstration

The Stratus AirSprayer is different than the quadcopters/rotary wing and fixed-wing UAVs (unmanned aerial vehicles) typically seen with ag drones. The Stratus AirDrone is a “flexwing” system— one that can carry heavier loads and stay in the air much longer than conventional drones thanks to it’s parachute feature.

When spray drones come up, we typically think of rotary wings, like what DJI typically sells, or like Guardian Agriculture.

These systems allow for precise positioning of the aircraft and they provide downwash that can help spread the spray pattern out. Downwash can improve canopy penetration, but can also have complex dynamics to it:

The biggest problem with these rotary wing systems is that they use a lot of energy, limiting battery life. These drones typically have limited payload capacity (spray tank) and a battery life of 5 to 15 minutes— leading to relatively low productive acres per hour, which hinders potential use cases in large scale row crops. For example, Guardian Agriculture, one of the more efficient rotary winged systems, highlights a productivity number of 60ac/hr.

On top, when rotary systems are flown at a sub-optimal height or speed, droplet patterns, drift, and swath width will change, leading to inconsistent performance of crop protection products and risk of off-target drift.

Fixed wing drones on the other hand will fly faster, potentially improving capacity and eliminating the uncertainty of downwash. However, still have limited pay loads, battery life and require a runway for take off and landing and can be a challenge for transportation to and from fields.

Enter the Stratus Airsprayer, a “flexwing,” autonomous drone that is gasoline powered.

The body of the Stratus AirSprayer is 3.25 metres (ten feet, eight inches) long, 2.1 metres (six feet, nine inches) wide and 2.25 metres (seven feet, five inches) high. It weighs 700 lbs empty and can carry a payload of up to 833 lbs. The boom swath width is interchangeable, 18 ft or 30 ft, and nozzles are spaced every 10 inches

The machine has a three-blade propeller at the back powered by a Rotax 100-horsepower gasoline engine, and it relies on a 541-square-foot (50.3-metre) parachute flex wing.

Precision Ai has patent-pending on the parachute design. The parachute enables users to have the convenience of drones, yet scalability to larger operations thanks to enabling heavier payloads and the ability to fly slowly enough to apply precisely.

Less filling, no battery charging, less fuel and more efficiency.

The system boasts a 5 hour flight time thanks to its fuel engine design vs. battery, which fundamentally changes the spray efficiency of the system.

The flight and application speed of the AirSprayer is an astonishing 61 km/h and it is able to take off rapidly with 350 to 500 feet (107 to 152 metres) of runway room available whether on pavement, dirt, grass or gravel.

The tank size size can be up to 100 US gallons (378 litres).

The combination of the aforementioned speed, tank size and flight time means that the Stratus Airsprayer can do upwards of 92 acres per hour with refill times (manually done) of 3-5 minutes and an application rate of 1.5 gallons per acre.

For the full Upstream Ag Professional article breaking down the opportunities and challenges with the Stratus AirSprayer, how their sprayer capacity compares to ground systems efficiency per hour, overview of the software and optical spot spraying technology, and what it might mean for impacting the world of crop inputs and their go-to-market efforts, become an Upstream Ag Professional member:

Over the last quarter, I have listened to or read more than 50 agribusiness analysts calls and talked to almost three-dozen agribusiness founders and CEOs.

This has highlighted some examples of what great CEOs and businesses do better than others.

One stand out has been controlling the narrative.

Controlling the narrative of your business is crucial for any company or CEO.

For a CEO, maintaining control over the company story ensures that internal and external stakeholders perceive a clear and consistent direction, and doesn’t let others, such as media or competitors, steer your messaging off-course while also paving the way for clarity in seeing the organization vision— leading to buy-in, better decision making and execution.

Chuck Magro and Corteva

One example is Corteva CEO, Chuck Magro. His ability to control the narrative about Corteva, their strategy and the market on an analyst call is exceptional. This skillset has been observable since his time at Nutrien and I think he has done an even better job at Corteva given they have a new strategy and KPIs to deliver on.

There are two specific things Chuck does well to control the narrative:

  1. Frames how Corteva views the environment/concept etc. and sets the stage for the more detailed answer from his counterparts.

  2. Reiterates key messages that tie back to their strategy.

When an analyst asks a question to the executive team, Chuck often steps in first with comments like these to favorably frame the question and answer (from Q1 2024 Earnings Call):

So let me start. I'll give you the backdrop and then Dave can help you with the bridging.

or

Let me give you the overall context for the Seed Strategy and then Tim can answer the question on the current dynamics, and what we're finding from an order book perspective.

Related to the second example, Chuck went on to emphasize examples in executing their strategy, such as the number of hybrids being launched, becoming a “net technology seller” (regarding licensing their traits) and their ability to obtain price premiums in the market— all of which reiterate their commitment to, and execution of, their strategy.

I would suspect Chuck’s approach on calls further benefits his colleagues, too— giving them more time to think through their specific answer, leading to a better answer delivered while also reinforcing important signals to the entire company, trickling down to everyone within Corteva, and outside when it comes to talent attraction.

Narrative ownership goes beyond publicly traded company benefits— it is valuable in startup founders and CEOs, too.

For the full article examples and insights from CEO’s like The Climate Corporation Founder and Ohalo CEO David Friedberg along with companies like John Deere and why this is a necessity for agribusiness professionals, become an Upstream Ag Professional member today:

Counting canola out the back for real time harvest loss reporting in the cab. No drop pans, no stopping! Canola will be in beta this year along with barley, oats, lentils, and peas. Running full bore with wheat, corns, soys, pintos, cotton, and peanuts.

Last week I saw a post on X from Farmwave about their HarvestVision product— a system with 1 to 8 cameras per combine and an in-cab tablet for display that aims to identify and quantify harvest losses, enabling a farmer to adjust their combine settings in real-time to decrease losses without stopping the combine.

Increasing yield is one of North American agriculture's most significant points of emphasis. Farmers want an extra 2, 12, or 20 bushels per acre through some new practice or product. However, a major problem in every field that can hinder yield is poorly capturing those yield gains at harvest.

In wheat, harvest losses can be as high as 10% and average 3-4%. On a 50-bushel crop, that’s still around 2 bushels/ac. The delta between a poor loss (8%) and a good loss number (2%) is about 3 bushels per acre. Corn losses can be in a similar range. Losing 4% on a 180bu/ac crop vs. 2% is 3.6 bu/ac lost.

Canola can be just as challenging.

According to a Canadian studies, canola harvest losses range from 0.2 bu/ac to 4.1 bu/ac with average losses being 1.3 bu/ac. That’s almost a bushel and a half, or about $17/ac at current prices.

The HarvestVision system is unlikely to enable zero losses per acre— however, improving upon losses is a significant opportunity to directly benefit farmer bottom lines. If that average loss rate can be cut in half to 0.65 bu/ac, that would save a farmer growing 1000ac of canola $8.50/ac or about $8,500 annually just on canola acres.

The HarvestVision system costs $12,000 up front for the hardware + $2,500 annually after the first year for model and software access.

On top, an average bushel of canola has over 4 million seeds in it! That’s a lot of volunteer plants to control in the following years (more herbicide expense) and a lot of potential seeds that can rob the soil of water and expensive nutrients like N and P in years to come.

The loss numbers make canola notable. But what makes the canola post even more interesting is that if FarmWave can effectively do canola, a crop with one of the smallest seeds in North America, then we can extrapolate that they can effectively do any crop. On top, it could be useful on other equipment systems too, such as assessing spray droplet patterns or fertilizer spread patterns.

For the full breakdown on future opportunities for retailers, ag equipment manufacturers and the future of Farmwave, become an Upstream Ag Professional members today:

This is a thoughtful article from InnerPlant co-founder and CEO Shely Aronov that is worth reading. It’s a line of thinking I’ve heard from her before and something I subscribe to.

There are often climate and sustainability led messages from agtech start-ups in pitch decks, and sometimes, even in farmer pitches themselves.

But sustainability messaging should be the secondary message.

Almost every new company and technology in agriculture is focused on doing more, with less. In a direct way or with secondary implications. This naturally has a sustainability and/or climate message.

Less fuel used. Less fertilizer per bushel. Less soil erosion. Lower environmental impact. Better quality. More yield. More time saved.

If the company or technology didn’t do that, they wouldn’t (or shouldn’t) exist.

That’s why every agtech product gets spun into a sustainability message. As we all know, more yield, with less inputs when inputs skew towards a carbon intensive manufacturing process and application method, means an angle to emphasize a reduction in climate impact.

If new products and companies coming to market didn’t help farmers or agribusinesses do more with less, they wouldn’t be viable economically— no successful farmer is going to sacrifice the short-term viability of their business for the sake of a more sustainable product.

The issue becomes, if a start-up or company leads with and over emphasizes the sustainability message, the more tangible business impacts get lost in the noise, or do not get thoughtfully positioned in a way to be compelling to the farm or agribusiness. To Shely’s point, if there isn’t a bottom line impact or a valued benefit, it doesn’t matter how sustainable the product is:

Ask a farmer to pay extra for green technology and they’ll ask—quite rightly!—what’s in it for them. A growing subset of shoppers will buy products because they’re green. But like farmers, consumers won’t compromise on the basics: If an eco-friendly shampoo leaves their hair filthy, they won’t keep buying it. “If you’re asking customers to make a major trade-off, it’s going to be an uphill battle”

Incumbents

It’s easy to pick on start-ups. But this has crept into incumbent initiatives, spending and messaging that I think reinforce the points Shely makes: financial discipline should come first.

For an example surrounding fertilizer company Yara and how the aforementioned Fast Company article ties to Yara’s Q2 2024 earnings results announcement, become an Upstream Ag Professional member today:

Related:

Syngenta Crop Protection and Ginkgo Bioworks, today announced a new cooperation aimed at accelerating the launch of a new biological solution. The two companies have previously collaborated on next-generation seed technology.

Ginkgo Bioworks plans to optimize a microbial strain to meet productivity targets for a secondary metabolite from Syngenta’s biologicals pipeline. The solution aims for cost-effective, and large-scale production, expediting Syngenta’s launch timeline. Ginkgo will use its Ag Biologicals capabilities to guide strain engineering strategies, diagnose strain performance limitations, and discover new biological features.

It’s not clear exactly what type of biological product is being worked on (eg: crop protection, biostimulant etc).

Ginkgo and Syngenta announced a previous engagement in 2023 where Syngenta would leverage Ginkgo's protein engineering capabilities and high-throughput screening technologies to accelerate Syngenta's efforts to develop plant traits.

Syngenta has an extensive list of companies that they are currently invested in or partnered with in efforts to bring bio-based innovations to market:

In the June 30th 2024 Edition of Upstream I highlighted agribusinesses lacking in biological R&D capabilities and the emphasis on partnerships, acquisitions and collaborations.

For more on Ginkgo Bioworks initiative in agriculture, the upstream components of the value chain their emphasize, their partnerships, business model, their sole patent with Bayer Cropscience and more, become an Upstream Ag Professional member today:

ICL, and Lavie Bio Ltd., a subsidiary of Evogene Ltd., today announced a significant milestone in their collaboration to develop bio-stimulant solutions for key row crops facing various abiotic stresses.

More than a dozen novel microbe candidates, which met the product requirements for efficacy, stability, shelf life and fertilizer compatibility, were computationally identified and verified. The microbes were discovered and validated using Lavie Bio's BDD technology platform and achieved a remarkable prediction rate from computer modelling to greenhouse validation – a rate ten times higher than the industry standard, according to company estimates. While this process can normally take several years, the collaboration achieved success within its first 12 months.

Lavie Bio is a subsidiary of Evogene.

Evogene has three artificial intelligence engines driven by what they call a “computational predictive biology” platform, or CPB Platform.

The platform is used for product discovery and development, utilizing comprehensive computational biology to increase the effectiveness of finding suitable molecules while reducing the time and cost of product development.

Evogene tailored the platform to have three separate focuses:

  1. Microboost AI - supports the discovery and development of microbe-based products.

  2. ChemPass AI - supports products based on genetic elements

  3. GeneRator AI - supports genomic understanding and gene identification

Evogene's approach is to establish a product development ecosystem around each tech engine, through two business structures:

  1. Create independent subsidiaries, focusing on specific life science market segments with a license to use Evogene’s tech engines for product development, or;

  2. Joint development with leading companies for defined products utilizing Evogene’s tech-engines. Typically, the partner leads later-stage development and product commercialization.

One of those subsidiaries is Lavie Bio.

Lavie Bio is dedicated to ag biological products and uses Evogene’s MicroBoost AI tech engine for its developments.

Lavie Bio has taken investment from both Corteva and ICL totalling $37 million from them combined, with $10 million from ICL specifically.

Beyond the investment, ICL and Lavie Bio have been in a joint development agreement surrounding biostimulants for nutrient use efficiency and this week they announced discovery milestones.

For more on ICL R&D Investment and strategy for biostimulant development, become an Upstream Ag Professional member:

Yield prediction in agriculture has been a priority since 1972, driven by a historical event known as The Great Grain Robbery.

In July 1972, the Soviet Union, experiencing severe drought, unexpectedly bought 15 million tons of U.S. wheat, corn, soybeans, and barley at low, subsidized prices. This massive purchase depleted American grain stocks and caused domestic wheat prices to skyrocket, triggering a food crisis.

The incident underscored the urgent need for global agricultural monitoring, coinciding with the launch of NASA’s Landsat 1, a satellite capable of providing data on crop conditions from space. This timing led NASA to collaborate with the USDA, resulting in the development of the Large Area Crop Inventory Experiment (LACIE) in 1974, the first satellite crop production forecast.

In the early days of Landsat 1, scientists printed gray-scale satellite maps, pieced them together on conference room walls, and manually identified fields by drawing squares. They trained algorithms to differentiate between the radiometric signatures of various crops and validated these models by physically inspecting fields. A few years later, the LACIE program began providing global crop yield estimates, a high-priority and sensitive initiative for the U.S. government. Any miscalculations in these estimates had significant market implications, highlighting the critical nature of accurate yield prediction.

Since then, yield prediction and forecasting has been paramount to everyone from grain traders and originators, equipment manufacturers, food companies and farmers themselves.

It has been thought that prediction would get better: more and higher resolution data, with more powerful models, and yet while subtle improvements for those looking at the macro aggregate production (as the article suggests, though it’s not specified how accurate their model is), there remains little incremental value to farmers from yield prediction.

There are, at the most simple, two ways to for a farmer to gain from accurate yield prediction specific to their farm.

For an overview of benefits to the farmer, where current accuracy of yield prediction is, why that is a short coming and more, become an Upstream Ag Professional member today:

Biome Makers, a leading global agtech company on a mission to recover soil health and improve farmer profitability, announces the latest evolution of BeCrop® technology. BeCrop® Farm is the first digital platform designed to maximize the potential of every acre. This innovative solution evaluates over 1,000 parameters, including complex biological data and environmental factors, to provide precise input recommendations and tailored agronomic insights on soil health, disease risk, and management practices.

BiomeMakers is a soil testing company that dives into parameters beyond the physical and chemical and into the biological.

BeCrop Farm is focused on analyzing and comparing field health, aims to pinpoint pest risks, and provide targeted fertility and management insights. Essentially, they want to deliver actionable insights to farmers based on the results across the following:

  • Product Recommendations: Data-driven recommendations for biological inputs.

  • High-Definition Maps: Biological soil metrics pinpointing areas needing attention at the field level.

  • Agronomic Insights: Turns biological analysis into actionable guidance on management practices to implement.   

  • User-Friendly Digital Experience: A retail and farmer-focused digital platform with analysis tools.

They have partnerships with companies like Syngenta.

BiomeMakers is similar to two other entities in the space.

Trace Genomics and Pattern Ag are companies that operate in the predictive soil testing space in a similar way. Trace Genomics uses DNA-based soil analysis to inform decisions on fertilizers, crop protection products, stabilizers and varieties, integrating genomics to analyze pathogen dynamics and combining these insights with traditional soil properties. They have partnerships with companies like CHS and Taurus Agriculture. Similarly, Pattern Ag uses a metagenomics platform to predict pest risks and nutrient deficiencies, delivering insights to farmers for decision making based on soil biology. Similarly to Trace, they have collaborations with agribusinesses like Stine Seeds and Lavoro in Brazil to augment their market reach, and their SaaS decision tools navigate the complex interactions between soil, weather, and crop history.

Non Ag Article

The more options you leave open for your business, the less likely you are to achieve them. Optionality isn’t about establishing a breadth of infinite options, but rather best positioning yourself for the right potential downstream pathways. Diffusing resources across multiple different options reduces the process power you have in achieving critical mass for any of them.

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