Upstream Ag Insights - March 18th 2024

Essential news and analysis for agribusiness leaders

March 18, 2024 • Read Time: 19 minutes

Welcome to the 207th edition of Upstream Ag Insights, where each week, we dive into the latest events, innovations, and business dynamics throughout the agribusiness landscape.

My name is Shane Thomas.

Whether you're a new subscriber or this newsletter found its way to you through a forward, you're in an unparalleled place for frameworks and insightful analysis designed to help you navigate the complex agribusiness landscape, enabling your business and career to thrive.

Index for the week:

  1. Bayer Crop Science 2023 Annual Report Highlights and Analysis

  2. Dynamics of Data in Agriculture Highlights and Key Takeaways

    1. Field Data Management Software: The backbone of ag tech adoption

  3. Artificial Intelligence in Agriculture

    1. Yield maps killed agtech software, can AI fix it?

    2. Bayer pilots unique generative AI tool for agriculture

  4. Introducing INNOVA, a New Data Modeling Tool From INTENT That Gives Users a Glimpse Into the Future: Precision decision and what it means for agribusiness professionals

  5. 7 Technology Trends Ag Retailers Need To Know

    1. How will See and Spray Impact Nutrien’s Business?

  6. Break Down The Barriers In The Biological Space: Why We Need to Stop Needlessly Over Complicating Biologicals

  7. New report: Agrifoodtech startup investment drops 50%, accounts for just 5.5% of global VC dollars

  8. Ever.Ag Acquires Adapt-N® from Yara North America

  9. Compeer Financial® Partners with Bushel® to Improve Digital Experience for Ag Lending

  10. Strategy & Artificial Intelligence

  11. Other Ag Articles

This week’s Edition of Upstream Ag Insights is brought to you in partnership with Headstorm

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Index for the Highlights and Analysis:

  1. Introduction and Capital Markets Day 2024

  2. Texas Two-Step and Bayer Assets

  3. Bayer Crop Science 2023 Financial Results and Financial Scorecard

  4. Research and Development, Innovation and Partnerships

  5. Capital Expenditure

  6. Areas of Business Expansion

  7. Final Thoughts

For the full overview of the Bayer Crop Science 2023 business including an overview of the “Texas Two Step”, an overview of how Bayer is progressing its revenue streams, breakdown of new partnerships, Research and Development expenditure efforts, innovation initiative comparison chart between Bayer and their competitors and much more, become an Upstream Ag Professional member today:

To download the Stratus Ag Research Dynamics of Data in Agriculture Report Highlights, check out the link immediately above.

Note: I have made this article available for free to all Upstream Ag Insights subscribers.

Since 2016, Stratus Ag Research has done an in-depth survey of farmers across North America identifying important trends, delivering keen insights and empowering agribusinesses to inform their strategy and tactical efforts surrounding digital initiatives. Given the length of time they have done the survey work, they deliver an unparalleled level of insights into what is driving and has driven farmer utilization and adoption of digital and precision tools.

I was able to preview some of the 2023 results and wanted to share a few of my favorite take aways from the research.

The data I reviewed was specifically from the United States survey. The survey was completed by 841 commercial crop farmers in the United States. Farm operations needed to have planted a minimum of 1,000 total crop acres in 2023, with a specific threshold of 100 specialty crop acres for those in California. The average farm size for survey participants was 2,680 total crop acres.

Below are five takeaways from my preview of the 2023 Survey Data.

Index of Key Takeaways

  1. Retail Influence, or Lack Thereof?

  2. Which Software Dominates the Market?

  3. What is Hindering Adoption According to Farmers?

  4. What are the most important features to farmers in Farm Management Software?

  5. Perception of Emerging Trends: Precision Spraying, AI and Autonomous Equipment

  6. Final Thoughts

  7. Other Reading from Stratus Ag Research and Upstream Ag Insights

1. Retail Influence or Lack Thereof?

When it comes to informing farmers crop protection, and most crop input decisions, retails are the most influential group of individuals.

Survey data from Stratus Ag Research in 2022 (USA survey) illustrated that when it comes to crop protection decisions, almost 92% of farmers say they consulted with their main retailer to inform their crop protection purchase decisions:

However, when it comes to farmers having their crop input retailer work with them to analyze, interpret, and make recommendations based on their farm’s agronomic data— only 19% of software users said yes. A declining trend from 2021 when it was 25%.

The other aspect of this is that Stratus results suggest farmers need and want more support surrounding software.

Farmers need support. Even among the most frequently used field data management software platforms, fewer than 15% of farmers indicated they know a lot about the software.

There are still major gaps in support for farm software users and farmers say they see services such as troubleshooting, software updates, training on new features, and equipment integration as useful, but they are not receiving adequate assistance.

Couple these two insights together from the survey data and it illustrates the opportunity for retails to bridge that gap in support of farmers. Especially considering another takeaway— farmers DO NOT see the retail as their preferred organization to work with surrounding software:

Ample opportunity for retails to evolve their business.

2. Which Software Dominates the Market?

Within the survey data there are thousands of ways to slice and dice the numbers up to understand which products have a strong hold where and in what specific feature and functionality, but they also offer a macro view where we can get a good idea of which softwares are dominating the United States market for farmers:

Unsurprisingly, John Deere Operations Centre and Climate FieldView dominate usage, followed by AFS Connect (CNH), Ag Leader and Trimble Ag Software— all equipment driven software.

The most prominent, non-equipment related software besides Climate FieldView? Bushel Farm.

For the rest of the highlights from the Stratus Report, check out the link in the heading.

3. Artificial Intelligence in Agriculture

a. Yield maps killed agtech software, can AI fix it? - Software is Feeding the World x Tenacious Ventures

This week my friends at Tenacious Ventures and Software is Feeding the World released an all encompassing report that dives into challenges of software in agriculture.

If you are looking for a well thought out, aggregated overview of the challenges and opportunities of software and artificial intelligence, I high recommend looking at the report.

There is one particular point that I want to highlight that I think was a great insight from the report (emphasis mine):

Another problem plaguing software in agtech is limited interoperability between different systems. This creates silos, multiple data entry challenges, and introduces additional system latencies. With newer AI capabilities like LLMs, it will be easier to access and synthesize non-structured proprietary data like images and field notes. LLMs also have the power to help build APIs quickly, and alleviate some of the challenges around semantic understanding of data. The combination of improved interoperability through LLMs, and the ability to access and synthesize non-structured data, has the potential to improve the user experience and make it closer to human interaction.

The insight surrounding interoperability is something I hadn’t tied together with LLMs, but it’s an astute call out.

A lack of interoperability is an often cited challenge in agtech. One component enabling interoperability are APIs. Companies are often resource constraints and have to decide between putting effort into system maintenance or new feature/product development or APIs. If development gets 10x or 25x quicker (and cheaper) thanks to LLMs then API development can be prioritized. The capabilities of LLMs are not automatic (eg: “Make an API for x”), however, AI does present tools to “10x” developer workflows and efficiency, which can lead to less talk about collaboration and interoperability, and more ability to execute around it. The other component here is the benefit to be able to get insights out of the software by being able to type a request with a chat interface vs. use a traditional awkward clicking and drop down menu interface that never quite works.

The implications are great for farmers, agribusiness professionals and agtech companies at large because seamless user experience should become much more common.

Bayer today announced the pilot of an expert GenAI system to benefit farmers and up-level agronomists in their daily work. The company has been using proprietary agronomic data to train a large language model (LLM) with years of internal data, insights from thousands of trials within its vast testing network, and centuries of aggregated experience from Bayer agronomists around the world.

Bayer is introducing a pilot for a GenAI system that leverages their internal agronomic data to train a large language model (LLM) with years of internal data, and insights from their trialling network.

Bayer framed this announcement well— as a system for “up-levelling” farmers and agronomists.

The framing in the release shows that the focus is to support information finding to inform decisions and streamline information acquisition.

For the full overview on how it fits into the Upstream Ag Professional LLM framework for agriculture, what Bayer is likely to do next and who is doing similar things to Bayer in the LLM for agriculture space, become an Upstream Ag Professional member today:

INTENT, unveiled its INNOVA offering which harnesses the power of AI and machine learning to transform complex datasets into predictive insights. Until now, the unknowns in agriculture had made it difficult, if not impossible, to anticipate a product’s market fit with confidence. The launch of INNOVA allows users to visually model proprietary and public data from around the world to map out a profitable path forward. Having the ability to forecast market size, value, optimal placement and sustainability impacts will be a distinct competitive advantage.

The focus of the initial launch of the software is around models that deliver insights surrounding the following:

  • Product Placement – Determining optimal product placement, down to the sub-field level, understanding where your product will perform best and where it will not. Incorporate land usage, climate and soil suitability, and product performance information.  

  • Market Size – Gaining an understanding of the total addressable market size for a product, incorporating acre projections, climate and land suitability, and pest projections, to the county level.  

  • Product Value – Assessing the value of a companies product relative to market alternatives, incorporating performance, pricing and usage data, to the county level.

  • Sustainability Impact – Evaluating GHG impact and forecast future projections, integrating client data sources with climate, soil, land usage and other variables.

For the full overview on why this is important, how the software can differentiate agribusinesses, how it evolves INTENT’s business model and how it looks very Amazon-esque, become an Upstream Ag Professional member today:

I think this is a good summation of various trends, technologies and companies that are compelling to watch for ag retailers:

  • Selective Spraying

  • Data Analytics

  • More Connectivity

  • Prescription Inputs

  • Streamlined Ways To Do Business

  • Gene-Edited Crops

  • Fields and Plants That Talk

Become an Upstream Ag Professional member to see the three areas I see missing, why they are important along with an in-depth breakdown of Nutrien Ag Solutions 2023 revenues to assess the implications of See and Spray on a retail business, where the opportunities then arise, along with how it impacts and will adapt programming from input manufacturers:

I think we often over complicate biologicals.

For the full breakdown surrounding how biostimulants can and should be approached for the best success and how to implement that into a process for agronomists, sales people and marketers, become an Upstream Ag Professional member today”

Related: The Sauce Paradox and Biologicals - Upstream Ag Professional

Investment in agrifoodtech startups has hit its lowest point in six years, declining nearly 50% from 2022 to 2023 as a result of fewer and smaller deals, according to AgFunder’s just-released Global AgriFoodTech Investment 2024 report. That’s lower than the 35% year-over-year drop experienced across venture capital markets, according to AgFunder’s main data partner Crunchbase.

Agrifoodtech funding declined as an overall portion of global venture capital as generalist investors — many of whom fueled billion-dollar-plus valuations in categories like alternative protein and vertical farming just a few years ago — are now fleeing the sector. In 2023, agrifoodtech represented just 5.5% of VC dollars across all sectors in 2023 compared to 6.7% in 2022 and 7.6% in 2021.

AgFunder News released their highly anticipated Agrifoodtech Report this week. Unsurprisingly, the numbers have cratered.

Highlights:

  • Agrifoodtech startups raised $15.6 billion globally in 2023, down just over 49% from $30.5 billion in 2022.

    • Deal count in 2023 was down 26%, reflecting smaller rounds

    • The median deal size decreased 9% year-over-year whereas the average was down 30% on 2022 and 50% on 2021.

    • Farm Management Software, Sensing & IoT was down 58%

  • Funding to all categories declined with the exception of two: Bioenergy & Biomaterials and Farm Robotics, Mechanization & Equipment

  • Funding to upstream startups accounted for 62% of overall dollar investment in 2023, compared with 51% in 2022 and 30% in 2021.

Ever.Ag, a leader in agricultural technology solutions, proudly announces the acquisition of Adapt-N, from Yara North America. This acquisition provides wider market access for Adapt-N, the premier in-season nitrogen recommendation tool.

Become an Upstream Ag Professional member for details on whether the acquisition makes sense, why Yara struggled with digital tools in North America and what the news might mean for the future of Yara in digital technology:

Compeer Financial and Bushel, announce the addition of Bushel Wallet to Compeer’s services as a way to digitally access and manage lines of credit serviced by Compeer. This is part of Compeer’s innovative digital strategy to provide a transformative customer experience for how Compeer does business with its farmer customers. 

Bushel is primarily known as a software business. However, they launched Bushel Wallet in 2022, a “digital wallet” designed specifically for farmers and agribusiness. It is supposed to provide agribusinesses with the seamless ability to exchange payments through the safety and security of the Wallet’s digital ecosystem. Since meeting co-founder and CEO of Jake Joraanstad in 2020, he has always emphasized the future payment infrastructure of Bushel to me.

For Bushel’s Wallet to be successful, they need to increase its utilization and take advantage of network effects. Increasing the integrations into other software’s, credit organizations, retailers etc is key to driving the success, after all, they need to it to be moving not simply millions, but billions of dollars for it to deliver meaningful network effects and revenue for Bushel’s business.

Compeer wants to continue to evolve their services to farmers, reducing friction and enhancing the customer experience. Bushel is one avenue to making this possible, but notably Compeer has relationships with other agribusiness software companies like AgVend. On top, Compeer is unique in that they have a focus on agtech with individuals internally actively looking for new avenues to deploy their credit services, making them a really interesting agricultural financial institution in the United States that I would like to dive into deeper one day.

Through Bushel Wallet, farmers will have visibility and access to their line of credit through Compeer, including:

  • Viewing line of credit details including current balance, interest accrued, and original loan amount

  • Making payments on lines of credit directly in Bushel Wallet

  • Easily pay invoices and other point-of-sale purchases with a line of credit through Bushel Wallet

  • Drawing down on lines of credit and transferring funds to the Bushel Wallet account or any linked bank account to pay other operating expenses

Non Ag Article

As a manager/professional, you need to work on creating a uniquely valuable heuristic. If you simply run an algorithm, you are probably out of a job already. If you haven’t done the thinking work to formalize the heuristics that you employ in your own work, good luck, it is only a matter of time until you will be replaced. And if you have aimed for a heuristic of average quality, you are directly in LLM/AI’s kill-zone.

11. Other Ag Articles