AgTech Biologicals might be having a Bad Week
April 28th, 2023 - My 34th Edition of Easy Observations in Agriculture
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Opening Thoughts:
To start, I’m going into a weird territory with this one as I’m not an agronomic professional and I don’t currently farm while using these products. Biologicals are new and hard to fully understand to many in the industry. I do think there is a lot of opportunity with them, but the reality is it is really early in this part of the AgTech industry and Ag as a whole.
The other interesting point around biologicals is that they clearly are getting the most money and attention from the large corps and investors in Ag as they potentially have the biggest real world upside and value props if they actually work as advertised.
I mean think about it, if some of these groups can replace via a small amount of product tons of other and more expensive product while being easier to apply, then you have a general winning formula.
A good example of this is what my cousin said to me who farms our families ground in central ND.
Yeah the way I looked at it last year was 88 pounds of product (urea) cost around 75$/ac and X Biological was 22$/ac for claiming that's what it provided. On our checks where we cut the rates and used X we were at equal yields give or take a bushel. So even though yield wasn't increased the cost of fertility was cut by 50-55$/ac
That is a pretty good statement and while clearly that won’t work everywhere and in all situations it shows it likely can work.
Why I bring this up this week is because of a close colleague that raised some interesting questions due to a recent multiple land grant university study around biologicals. Here is his post and link and while there is multiple ways to think about this it does seem many farmers are skeptical and so are the universities to say the least.
The University Side:
Let’s just start with the study at hand and it’s summary (The same one Ben above was referring too). I’ll mention, I’m not diving deep into what it all means and why but I’ll add some personal thoughts around it.
The Study - Performance of Selected Commercially Available Asymbiotic N-fixing Products in the North Central Region
This was done by the groups below:
To say one thing about this group, they are very smart and very highly regarded individuals and institutions. For instance, much of this was led by Dr. Dave Franzen of NDSU (North Dakota State University, my college, Go Bison!) and he knows his shit. He isn’t controlled by any outside group and I’ve never known Dave to make things up. I’m pretty sure he’ll only collaborate with like minded people and Universities. So the procedures and science behind what they can do and what they actually do I’m not questioning. I will dive deeper into that though.
Overall, please read through the report and come to your own conclusions around their testing with biological products in Ag. It clearly to me isn’t perfect, but it nothing in agronomy can be due to all the circumstances. I’ll just leave their summary around what they found below and we can move on.
A bold assessment to say the least and one that as I and others are showcasing will have effects in this part of the AgTech industry. Now for the University criticism, how they test via plots for these conclusions are not always A-typical towards normal farming practices. Heck, sometimes there is a lot of variability in the plot itself or it is not as representative of typical farmers land as it isn’t farmed for large scale production. It is farmed for testing in very small areas and that naturally will effect the overall results.
To say it lightly, small plot testing for anything is far from perfect. I get why it is done that way to create a constant, but we all know that there are issues around it. As I’ve said anyway before, each square inch of soil is different from the next and there are so many variables in how it shifts due to things we can’t control or things we can. Either way, typical University test plotting isn’t a perfect representation.
The Biological Company Side:
So it seems this study didn’t focus on just one type of biological product beyond looking at the Nitrogen fixation ones. That is naturally one of the biggest ones out there though others exist too in different forms and functions. Either way, this study doesn’t make biologicals around N look good in most realms.
I’ll say a few things about these groups in simple terms…they are on the precipice of Snake Oil and Alchemy. Let’s be honest, it is really early for most if not all of these groups when it comes to the science and realistic expectations of what they are trying to do in Ag.
There is plenty of Snake Oil products in Ag and literally when one is selling a liquid/powder type product that is small in stature bulk wise, claims big things, and cost’s a decent amount it’s hard to not feel Snake Oily feelings. Plenty have been burned and very few have succeeded through those types of feelings.
I’m not trying to say biologicals are Snake Oil products. I’m saying that it’s easy for them to get stuck at this point and into that line of thought and thinking. Clearly some are probably that hence why a University and others will do study’s like above and why some will go into being skeptical and critical. I mean, if your are reading my stuff you should get that already.
In the end, biologicals have a tough road to clime on many fronts. For one, anything around chemistry is complex, spendy, and time consuming. It just is and is one of the hardest areas of science to do really well. Also it’s really easy for products that come from this realm to be not only scrutinized a lot, but with Ag and all of it’s randomness getting any product version to work everywhere is really really hard.
If anything, studies like these and the general thoughts around it will make one main thing happen in my opinion. While there are many in the field now, someone will figure it out and do it great and that group will win and succeed at levels in the realms of GMOs coming into Ag. That is the prize and many are hunting for it. You are going to have a very tough road to travel if that is your goal and since you’re talking BILLIONS, yeah I get it. Go big or go home.
The Farmer Side:
The above meme is really where I’m going here. Here’s the tough thing when you look at new types of products that claim big things like biologicals are, the marketing numbers look so good you almost get forced to try it. By doing that, the group selling it knows they sort of are manipulating you anyway so they can get more feedback to make their marketing and/or actual product better.
More or less, the farmer and also their service provider (more on that below) become rubes in random and semi non-regulated testing of products and they have to front basically all the risk which is money for the product.
When I put my farmer cap on it’s these types of things I really dislike. Biologicals are marketing “The Holy Grail” of chemicals yet beyond their lab research and maybe small test plot initial and internal testing are really just making farmers itch so bad like an addiction to try it out because they come up with these audacious claims. Products like that are very addictive to farmers. Sure they and most are good at being cautious and skeptical, there is always a certain group that isn’t.
At the same time, farmers are farmers and it’s pretty normal that they have to do their own testing and on farm trials to figure out anything in how to be successful and sustainable long term. It’s really just part of the job in testing all these crazy new things.
All in all, farmers and biologicals are between a rock and a hard place in many ways. You have to start somewhere and while it’s not perfect, it’s somewhere.
The Ag Service Provider Side:
More or less I’m talking about Ag Retail as they literally sell most of the fertilizer and other inputs where the biological groups are trying to disrupt as they say. I get it on both ends, Fertilizer is a big money maker for Ag Retail. At the same time chemicals make a lot for them as well.
Ag Retail is also in a rock and a hard place too as they have so much infrastructure tied into fertilizer management and if a simpler product say takes away the potential need for 25% of that infrastructure need you can understand pretty quickly that can make some groups a little scared.
At the same time, the margins with chemical type products are pretty legit for Ag Retailers. If biologicals financially work in a similar way then they should be able to offset that from the fertilizer part. The thing is it isn’t that simple.
Probably the main reason why it isn’t that simple is because if some of these biological products actually work then they probably don’t even need to distribute it through Ag Retail anyway. I mean they don’t require the same infrastructure and process. These biologicals can basically send this stuff through the mail and drop ship it.
We are seeing that with chemicals anyway already and hence why the digitization of shipping and procuring these products is getting pretty big. Look at AgVend, FBN, and Agrellus to name a few.
All in all, Ag Retail and other service providers that help farmers like agronomists and consultants have a tricky path to follow. Agronomists and consultants (same thing sort of) really might have the biggest job ahead here. They see the promise, but also the problems. They want to help the farmer, but also don’t want to push something that might not work. So, it’s a tough cookie to say the least.
In Closing:
Well, I tried to somewhat explain this all in the simplest of terms I could. Clearly it can and does go much much deeper. I really do think biologicals have a really big place in Agriculture and beyond. Look at how the world actually works.
I do have some really big issues with it currently and here is a list of what they are.
There are millions of biological processes involved in Ag production and focusing on just a few processes could be limiting or impossible to really help.
Messing with natural biological processes sort of scares me considering how some of the smallest effects can change an entire ecosystem. Think of hand soap that kills 99.99% of bacteria, great but the .01% is some crazy stuff and will become stronger which isn’t necessarily good.
The marketing approach is that it works everywhere for certain crops. That is not how Ag works. They need to find where it works in what type of situations from soil types, crop traits, weather, past production practices, variable factors, and beyond. Yeah, way harder but way more powerful.
The cost. I get things like this cost something and should. The thing is if their product actually works they’ll just shift the cost to be slightly cheaper than using traditional processes or fertilizer because they can. So who actually wins?
Maybe they need to focus on where it works best and where it doesn’t work as well. Then it can help not only target things better, but it also can enhance the overall process of the 4Rs in regard to fertility. Yet, they haven’t gone there which seems supper obvious to me.
Regardless in the realm of everything going on between biologicals, farmers, universities, ag retail, and other service providers there is a lot to digest here. I doubt it’ll get simpler any time soon though at some point a few will win the game and proceed to get bought by the giants or just become a giant themselves.
It is what it is and really is just the way things work. It’ll help some, take down some, and change some things. That is okay and I know that the more that is known around biological activity in Ag overall is a good thing.
I just hope in doing so we don’t create some weird type of an Agriculture Frankenstein…or should I say the Ag Frankenstein’s (A biological group) monster. Yikes….
Thanks for reading Easy Observations! Please Share, Subscribe, and Comment if you would be so kind. I’d also be happy to get together and meet if you’d like to talk more in-depth about AgTech or Earth Observation in Ag. Feel free to contact me at my website. All the best!
Mark Twain once said that “History never repeats itself, but it does often rhyme.” Some biologicals are really good at rhyme, yet the audience is complex.