Part 5: Navigating the Next Decade of AgTech
As I started writing about the next decade in agtech it became apparent this was going to be long, so instead of an incredibly long post, I decided to break it up into several posts. Below is Part 4.
To read Part 1 on Trend Assumptions and Jobs-to-be-done application to ag, please click here and for Part 2 on how tech savvy the industry will become and the future of soil sampling, please click here. For Part 3 on seed, automation and organizational alignment click here. For Part 4 on agretail and peak pesticide click here.
The Connected Farm Will Takeover
The farm of the future will be connected. Not just in that it has internet access, but in that everything will be connected; bins, shops, trucks, equipment, moisture probes, weather stations and beyond. The internet of things (IoT) will continue to influence agriculture in a meaningful way. Sensors will be everywhere on the farm, and they will be connected to the cloud where the data and information will continuously feed a system and platform to help make decisions, know what’s happening, but also enable transactions (crop inputs, grain, crop insurance, banks etc). Farm management platforms will shift from primarily agronomic based, to informing logistics, to finance as well connecting the entirety of the farm to any entity desired which will lead to new and better options for farms in the realms of insurance, grain marketing and equipment operating. And this software infrastructure on the farm will increase rapidly in the coming years, being a necessity to doing business with many relevant parties, from equipment dealers to ag retailers to progressive insurance companies.
Now, today there are definitive connection short comings across North America. 5G is thought to be a savior to this, and maybe 5G will be, but not until later in the decade at the earliest. The short comings of 5G are significant today, but telecommunications companies with a vested interest in the ag space, like TELUS or organizations with a vested interest in connecting the farm, like John Deere, will look to have their own private connection offerings that are farm specific connection platforms.
Today, as a general observation, the farm isn’t viewed like a manufacturing plant, prioritizing efficiency, zero waste and lean operating procedures. That will change, in part thanks to constant connections of machines. All 4000ac of a farm (as an example) will be optimized to manage efficient operations that make the farm run like a manufacturing plant. We will see products like FirstPass from Verge Agro expand in this space from their route optimization technology today. Connecting the farm enables a more efficient use of equipment, resources and time.
There will be less than a handful of platforms that have the means to be meaningful platforms powering farms. Just like in cell phone operating platforms, there are only a few meaningful operating systems, the same will be true for ag platforms. But with a lot of apps. The same will happen in ag as well. There will be a lot of companies that focus on being exceptional in one specific area (say a finance product like HarvestPort or a sensor technology like Arable for example) and they will have an emphasis on creating API’s with the main platform operators, say John Deere Operations Centre or Farmers Edge FarmCommand for example. This will allow farmers to choose their main platform of choice, but also be able to add on tools that make their operation better by offering something that platform isn’t capable of. Based on how we often see niche use pattern digital products expand into more robust platforms in other industries, such as Amazon (books to full retail, to platform market place and beyond), there may be the potential for this to occur with other more “niche” digital tools expanding further into bigger use case platforms, however, I still believe we won't see more than a handful of platforms with meaningful acres/use.
The potential for a connected farm has benefits well beyond the traditional agronomic or financial benefits; safety and security will be improved thanks to a connected farm. With these being two large topics around farming and living in rural North America, I believe we will see these problems be addressed with the connected farm.
From a crop insurance perspective, the potential is significant and we will see a lot of new offerings in the market place in the 2020’s.
Parametric insurance has been talked about since Climate Corp was launched, but with a connected farm the possibilities really come to fruition to manage risk from a weather perspective through a weather station that will enable a pay out based on actual field level happenings. Or there is the ability to have prescriptive insurance that insures you for your crops potential based on the season, informing data and decisions you have made that season vs. a lagging yield average production history trend, helping farmers de-risk their farm in a more progressive way based on what is being done today, not what was done 5 years ago in completely different situations.
The benefits to a fully connected farm are significant. This will be one of the big game changers for farmers in the 2020’s as their farm gets more and more connected. Sensor technology and connectivity will enable real time and automated decisions at more precise resolutions to better manage the farm will be core to farming and agriculture in the next decade.
The one common thread over the next decade will be technology. Whether you are a farmer, agronomist or ag industry professional, technology will have a disproportionate impact on your work over the next 10 years. If anything is apparent, it is that you need to understand how tech can help you and where it can hurt you and your business. This was a broad overview and I think in any given topic I introduced one can drill down several more levels into the intricacies of what could happen plus, dive into many topics that I didn’t get much into such as glyphosate, socioeconomic drivers behind trends, climate change and government legislation, and more.
As I wrote about some of these trends and thoughts about where the industry is headed there is one word that constantly came to mind: Opportunity. This next decade we will see unprecedented change in the industry, some may be along the lines of what I talked about, but much will likely be well beyond the scope of what I discussed. That’s the exciting part. Change is happening throughout every area of the industry and that is where opportunity lies.