Top 10 things coming in AgTech in 23’…in my humble opinion
July 12th, 2023 - My 37th Edition of Easy Observations in Agriculture
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Opening Thoughts:
Well we are half way through the year and to help finish off the rest I thought I’d make some predictions in what I am seeing and what I think.
As I’ve been a little silent lately as the summer is typically wild for this guy I’ll say visiting the InfoAg conference a few weeks back in St. Louis fired me up to get this out and about.
I’ve put a few posts already on LinkedIn around what I want to talk about and I sort of plan to deep dive later into a few of the main items below as well.
All and all, I figured a good ole list will be a good way to set the bar and also via a poll I put out on LinkedIn last month it is what the people wanted. Well here it is to my adoring followers…
Top 10 things coming: Some good some Bad
Startups meet the Desert
If you follow me on Linkedin you probably saw this meme and a little description around it. Simply put, there are a lot of groups that have been raising money for years and with the hope of becoming cash flow positive yet they just haven’t got there yet. Some are closer than others and some yet still need some more runway to get to where they planned. There are some that have taken this process towards a dangerous if not destructive path as well.
Now because of this you are starting to see the money dry up and some groups are having to decide whether to sell out or try some other tricky methods. There are some that are getting the funds as they are close to that golden road, but I’d say most are not there. This is going to create interesting times ahead and much of what I’ll mention below dives deeper into why this will happen and at a rapid pace.
Carbon is a loser
Sometimes one wants something to work because it can help the broader goal of adoption in AgTech and other improvements in Ag. This was Carbon Credits for me and many others. Though in reality it is and has always been what one might now see as a turd wrapped in burnt hair to some extent.
While I understand there are certain practices within this space that make sense as a broader effect to help with methods such as no-till, regenerative farming, and more sustainable practices the pure notion of knowing how much carbon is being sequestered is the challenging one. Especially considering most that are trying to track how much of it and where are using methods that really can’t do it well. If they can it’s not very scalable. Even if it is traceable is it even a practice that can feasibly help the goal it is trying to accomplish?
I’m sure I’ll get some grief and questions around this one and it’s why I plan to write more on it later. Anyway, to me the hype around is basically dead.
API connections are complicated
I’m seeing this more and more and honestly have seen it for years being part of solutions to try and help the maze of what we call API connections in Ag. The truth is it’s not only complex to connect everything to fit, but it also can cost a lot of money. This is why groups like Leaf and my former employer AgIntegrated existed (purchased by Telus).
The problem is those services that help also cost money and sometime a lot more than what the end groups really want. It’s a slippery slope to say the least and one of the problems as illustrated by the meme is most just want to connect to MyJohnDeere and/or Climate. The rest are sort of needed based on the niche needs of that other end client. More or less what is happening is a dulling of the need to connect to everything. This is another I will write more about soon as I can go pretty deep.
Mergers and Acquisitions Baby
As with my first point above, the money drying up is going to cause a lot of M&A soon. I’ve heard from some there are a few methods some are going after around this. One method is older startups (I hate to use that word) buying younger ones or ones that are running out of steam. Some are actually getting their next investment rounds just for this reason. I think it’s a semi reasonable approach though they’ll have to be careful in how they spend on who as the devil is always in the details.
Another method I’m hearing is multiple startups and even some older more legitimate companies are thinking of merging all together to create a mini conglomerate. In a way what Telus or Proagrica has tried to do, but on a smaller level. I’m sort of excited about this one as it opens the doors for a lot of upside throughout the value chain and can help showcase better some outliers while eliminating some of the legacy of old. Time will tell.
Drone Spraying finding some feet
I’ve been a skeptic around drones since they started to come out and especially around imagery and even more so on the spraying end. I won’t get into all the issues with the imagery side and to be honest it is getting a lot better. More or less the spraying side has bothered me because the size of drone needed to effectively cover large areas is tough.
Why the change of heart? I actually am hearing farmers starting to use them more and more. Also, I’ve talked to one particular group that is building a hybrid model (diesel/electric) that holds 40 gallons and can do 120 acre/hr which is wild. $400k for one of those approximately and they can build a bigger one. Anyway, it’s becoming more practical and I think ones of that size and scale could replace aerial applicators as they still will require special permits and licensing with less risk. Exciting times I’ll say.
Robots are slow
I know all these robots out there are trying to do some cool things (not including the mega drones above) and I know they need more time and can do good things, but dang it’s slow going. There are even some big robots doing cool things with frickin laser beams and all, but those are very specialized and spendy.
I’m more talking about these small ones doing all the things that are being claimed. I’m hopeful they’ll get there, but I see a longer road than most are hopeful for. So basically I’m saying many of these groups are going to have a hard time finding money or more money to get where they want in the near term. Maybe a bunch will form one of these conglomerates I mentioned above into a super robot group? Maybe may be enough.
SAAS on its ASS
There are no shortage of SAAS groups in AgTech or Ag in general now and I usually refer to them as an FMIS (farm management information systems). Some do a lot of things, some do niche things, and some do something in-between. The problem is a fight to the bottom to gain traction.
So many want to be the main character at ABC Ag Retailer and yet theres really only like 4-5 groups that are doing that now and here’s a little secret…some of those are not doing as well as you think. Overall, this doesn’t mean some FMIS groups don’t have something awesome and great. It means many are going to go away as they need to.
The issue is there are so many doing basically the same thing that they are fighting to stay alive and find somewhere to land. In doing this many times some, at least more from the past, gave there stuff away for free. All this did unfortunately was diminish the value of what was provided and hence did so for the ones that were charging for it. Frustrating!
Sustainability is actually key
I’m going to keep this short, but more or less with Carbon entering a slow down phase from what I see the whole Sustainability side of things is going to increase it’s already potent side. It’s not that it’s been gone, but I think Carbon has been in its way. From what I’ve heard, Sustainability is where the government money is going to go going forward and not Carbon. I honestly think it’s an easier sell anyway especially with the AgriFood groups as Sustainability can mean so many things.
AI is scary interesting
We’ve all heard of AI and the super popular ChatGPT by OpenAI as of late and heck I’ve even made fun of it with my sweet video from my last edition. Although I’m pretty skeptical on AI Bots taking over agronomy insights, I will say there is something to be said on how some namely farmers might trust it too much because it’ll be easier to use it than call their “guy” to get similar answers while getting charged.
I’m not even saying it’ll be wrong or right, the thing is it’s going to become easier for farmers not to reach out to their agronomists about those simpler answers and even some of those AI bots will be able to solve some tougher questions. It’s more of a call to agronomists to think beyond whether they are better or not than this tech while understanding that they need to be aware of it and even use it to some extent. The shear amount of money going into Large Language Models and AI is crazy and some are saying it’ll be bigger than what the internet did to us all. That changed agronomy too. Just saying…
Everyone is tired
Finally, if anything I saw from InfoAg and even the last 6 months is that so many are tired of hearing all the news and new things coming and going in AgTech in general. Even if some of the things provide value and work good many are just sticking to their guns and using what they already decided on even if it’s not “as” good.
Why is pretty simple beyond the complex of people being tired of the same story. The reason is for some groups like bigger Ag Retailers, Input Manufacturers, and larger Agronomy based groups changing to other software or processes is time consuming, spendy, and hard to do. Some will get through the barrier, but for many just be understanding of what the end client may be going through here.
In Closing:
I won’t pretend in saying that everything I just wrote is correct, but as my newsletter is called it is my Easy Observation. Some are more relevant than others and some are who the hell knows. There are also many many more things that I probably could have covered that I didn’t. I will dive deeper as I said on some of these things above in future editions, but for now it’s my peace. Thanks for reading.
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!
Good post Nathan. I like reading your newsletter, and not just for the memes. It teaches me more about the Ag space and it also gets me thinking about appyling some of your thoughts and insights into other industries. I get a lot of "hmmmm" moments. Thank you for sharing your thoughts.