InfoAg conference offers window onto ag tech’s growing pains

Since 1995, the InfoAg conference has billed itself as the premier event for precision agriculture. Sponsored by the Fertilizer Institute and supported by dozens of agricultural technology and farm services companies, this year’s InfoAg conference was held at St. Louis’ historic Union Station on July 23 to 25.

The choice of St. Louis was apt. Among the ag groups that have headquarters here are the American Soybean Association, the Farm Equipment Manufacturers Association, the National Corn Growers Association and the United Soybean Board. St. Louis serves as North American headquarters both for agribusiness and food ingredient company Bunge, and international animal nutrition company Novus, not to mention Monsanto (now Bayer).

St. Louis is the front-runner among a group of peer cities—including Indianapolis, Indiana, Kansas City, Missouri, and Memphis, Tennessee—that are bidding to become ag tech powerhouses. A 2017 article for AgFunder News asked, “Is St. Louis the Silicon Valley of Ag Tech?” Echoing that question, a September 2018 report by the St. Louis Regional Chamber noted, “The emerging ag tech boom represents a unique opportunity for the St. Louis region to establish a globally recognized brand in one of the fastest growing innovation sectors. In the next five to seven years, we have a real opportunity to become the ‘Silicon Valley’ of ag tech.”

This year’s keynote speaker at InfoAg was Ranveer Chandra, a Microsoft chief scientist who is leading a project area called Farmbeats, whose website proclaims, “Our goal is to enable data-driven farming.”

Early days

Some of the companies with booths at InfoAg capture aerial field data, like TerrAvion, a subscription aerial imagery company; others store, process or package it. Companies like AgStudio and Farmobile promise actionable, easy-to-use data systems. One notable absence was drone-makers. “Last year, there were six or seven drone makers; I didn’t see one this year,” one attendee told High Plains Journal.

Agronomists and crop consultants analyze the data, image it and tailor it into actionable recommendation and solutions. All the companies at AgInfo are seeking niches on the value chain with fewer direct competitors where they can focus on core strengths. While some of the attending companies deal directly with farmers, most deal with each other as they sort out their relationships while waiting for rural broadband to mature.

In an April report, “The Case for Rural Broadband,” the USDA said, “Today, agricultural technologies are often framed as standalone tools, which does not capture the end-to-end use of tech in agriculture. Currently, most producers plan, produce and organize sales of their goods using independent and disassociated technologies. Use of Precision Agriculture will continue to increase as technologies begin working together interdependently, as an agriculture ‘Internet of Things’ to transform the entire business of farming, regardless of which technology or design ultimately creates this value.”

Cracking the code of IoT

Senet is one company that seems to have cracked the code of the Internet of Things.

According to Noelani McGadden, vice president of strategic accounts at Senet, the company that became Senet began a decade ago as a maker of Low Power Wide Area sensors for propane tanks. Both the sensors and the network the company built to transmit their data were the first ones to be licensed by the FCC. The sensors saved money for fuel distributors by sending drivers to refill the tanks only when necessary—an example of “precision maintenance.” Some of those early sensors, powered by simple AA batteries, are still pinging 10 years later.

The data that the tank sensors sent out—pings indicating tank levels—was simple. That kind of low-power, low-density telemetry could be sent over unlicensed, allocated parts of the radio spectrum, using a protocol called LoRaWAN, short for Long-Range Wide Area Network.

At first, the gateways—devices about the size of two bread loaves that connect the sensors to the internet—cost between $3,000 and $4,000. Each gateway handles all the sensor traffic in a radius of between 20 and 30 kilometers. Over time, many commercial gateways became available and the cost continues to drop. There are low-cost options on the market today that are just a few hundred dollars, enabling new and different business models. Even end-users could afford to buy their own to connect to various operator-managed networks. Those end users could be private—such as individual farmers needing data from soil sensors or businesses monitoring carbon dioxide machines—or public, like water districts monitoring water meters. Many of those customers have applied for Connect America Funds money, a special fund established by the FCC to speed the pace of rural broadband connectivity.

As equipment costs fell and competitors crowded in, the company realized that it needed to find a new place in the value chain. “We climbed the whole tree, and hit every branch on the way down,” is the way McGadden puts it.

The company sold its tank-monitoring business to Anova, its biggest cellular competitor. It concentrated on its unrivalled experience in building cloud-based network management software and operating LoRaWAN networks. “We decided to build and maintain the rural internet backbone that all the sensors connected to. There’s a specific skill set around network design. We built up our practice around network design and pure-play cloud services,” said McGadden.

The company has relationships with more than 500 installation crews. McGadden said the company has 220 cities built out in the U.S. and has a “prospective build-out” of between 40 and 45 more worldwide. The networks can deploy quickly; through an international partner in India, networks were installed in 38 cities in only 18 months. “We don’t claim complete coverage like the cell phone companies do. Instead, we are letting our customers determine where and how fast the Internet of Things is growing,” said McGadden.

Farmers and growers remain core customers. But any company that uses low-power, low-frequency sensor data is a potential customer. In India, McGadden said, local governments used the network to operate an array of “no-parking” sensors to monitor lots where vehicles were not allowed to be parked. Fine collections, and hence return on investment for the agencies, “rose through the roof,” she said.

From the beginning, said McGadden, “We knew that any telemetry solution needed to be affordable to the end user and to provide immediate ROI.”

Ag company rebirth

According to Steve Rao, the year 2013 was a “wake-up call” for companies involved in ag tech and information technology. That was the year that Monsanto (as it was then called) bought Climate Corporation, a weather forecasting and insurance outfit started by former employees of Google, for $930 million.

At the time, Monsanto predicted that data science for farmers could be a $20 billion revenue opportunity beyond its core business of seeds and chemicals. According to Rao—whose background includes providing data and analytic services to consumer companies focuses on financial service, retail and insurance—the agriculture industry has only recently begun viewing data as “fuel” rather than “exhaust” for its businesses.

Rao is chief executive officer of Farm Market ID, which has been around for 40 years but has reinvented itself in the past few years. “We used to sell data by the pound,” said Rao. “Now we use our data in applications that solve agribusiness problems, all of which have been built within the past three years.”

As a company that bills itself as “the leading provider of farm and grower data to inform and improve agribusiness strategy, marketing and sales efforts,” Farm Market ID has a unique competitive advantage. It has a proprietary database of 34 million farm field boundaries covering 600 million acres of farmland linked to both owners and operators of the land. This data includes highly accurate government-sourced data, including Common Land Unit data from the USDA, real estate transaction data, and a host of other resources. The data is kept current through quarterly and annual update processes.

That unique data—acquired through a quirk in the legal time continuum, a window that immediately slammed shut—has since become the foundation of Farm Market ID’s proprietary databases, whose information (confirmed by human analysts) has granularity and accuracy without parallel.

“We can link more than 93 percent of U.S. farmland geospatially to owners and operators and can provide a 10-year history of the crops, acres and farm operations,” said Rao. “Earlier this year, we completed our on-farm grain storage compilation, successfully locating and quantifying 98 percent of grain bin storage capacity in 20 states.”

When crunched with other, publicly available data from USDA, state and municipal governments, Farm Market ID can provide precisely targeted information of immediate used to grain elevators, input retailers, farm lenders, irrigation companies, equipment dealers, seed and fertilizer companies, and many other ag-related customers. He puts his company’s mission succinctly: “We show companies serving farmers where to hunt and help them understand the customer.”

‘Last inch’ data

One of the July 23 presentations at AgInfo was, “What End Users Disliked about AgTech in 2018.” Its presenter, Aaron Bobeck, is a farm equipment sales and ag tech consultant who blogs about ag tech issues.

In December, to prepare for this panel, Bobeck compiled a list of comments submitted to his Twitter feed by readers of his blog, AgSnap. Among the randomly gathered complaints about ag tech marketing and products:

• Data, data, data (I’d much prefer useful information myself);

• Solutions in search of a problem;

• Producer feels company gets more value out of data than they do;

• Management doesn’t understand customer base, chases latest fad;

• Investment has been too high in some areas—everyone wants in the space and to scale right now; and

• Enterprise resource planning software: excessively expensive, tailored to specific and larger farms.

In the world of transportation, some logistics experts estimate that that “last mile” of a shipment can account for up to 28% of its total cost. In a similar way, some ag tech data providers talk about the “last inch” of data going to the farmer, the useful data points that actually help farmers make decisions that reduce their costs and increase their profits. It’s the most crucial, and probably the most difficult, inch.

It’s the inch that Servi-Tech specializes in. Servi-Tech, headquartered in Dodge City, Kansas, has been specializing in that “last inch” for decades. A full-service company combining crop consulting with lab testing, Servi-Tech also has offices in Amarillo, Texas and Hastings, Nebraska. The company, formed by co-operatives in 1974, is a kind of super-co-op “formed out of a recognized need to optimize farm inputs,” said Cunningham.

Cunningham grew up on a farm in the Texas Panhandle and graduated from Texas Tech University, studying zoology and chemistry. He spent 37 years at IBM, working with Fortune 100 companies on their networks.

For someone with that background, Cunningham is surprisingly low-key about technology. When he was first appointed to Servi-Tech, Cunningham was quoted on its website saying, “There will eventually be a cycle of consolidation among those [ag tech] startups that will stabilize the marketplace and standards will emerge. In the meantime, the most significant challenge for tech in ag will be proving a clear business value of a given technology and convincing the market that it’s worth the investment.”

Cunningham is more anxious to talk about the company’s trained agronomists, between 75 and 80 of them, one-third of whom have more than 25 years of experience. Many of them do independent crop consulting. Cunningham estimates that Servi-Tech’s clients and customers account for about 800,000 acres on the Great Plains. Servi-Tech recently rolled out a new delivery platform called called Servi-Tech Bridge

Cunningham says Servi-Tech has no direct competitors except in particular areas. “We provide services that help smaller and mid-size farmers and growers scale up,” he said. “Our lab quality is very high and that’s recognized.” Right now, it’s “high-touch” companies like Servi-Tech that are providing direct value to farmers and growers.

A lot of money has been flowing into the ag-tech space, and a lot of hype is being aimed at eager investors.

But a stroll around the InfoAg booths shows that the ag tech revolution so talked-up in the broader media is in its early days.

David A. Murray can be reached at [email protected].