Who Is Getting Rewarded for Your Ag Data?
Editor’s note: This article originally published in September 2019.
It’s hard to open any agricultural website or magazine without reading about ag data. Plenty of new and established companies are able to help growers collect and store this data while some can even digitally connect growers to their advisors and help them utilize their data to improve bottom-line results. I talk to growers, ag retailers, and agronomists on a daily base and they all tell me how hard it is to find the right platform for their data, mainly because they are not sure what their selection criteria should be.
The two questions I ask every time, are: “What do you want to achieve?” and “Where do you want to be in 5 and 10 years’ time?” I find these two questions most important, as they reveal the commitment level as well as effort an organization is willing to invest in digitization. In the case of ag retailers that are looking for a data platform for example, the answers to the aforementioned questions can range anywhere from: “We just want to do something on a computer and look like we’re up-to-date” to “we want to secure the profitability and sustainability of our organization as well as our grower clients in future years”.
Most ag retail organizations tend to be very grower focused however and realize that, in order to remain relevant to their client base, they have to implement some sort of digital solution that connects advisors to clients, increases “stickiness” and strengthens relationships. It is for this reason that at some point in most conversations, I get asked what will work best for their growers from a digital perspective. And again, I tell them to not worry about that right now – think about 5 or 10 years into the future: where do you and your growers want to be?
There are platforms out there that are owned by Big Ag, who obviously can put that data to good use, but good for who? Already we are seeing announcements of large chemical companies and articles by the likes of BCG, about using farm data to set input pricing, while calling it “risk sharing,” and I suspect that this is only the beginning.
In the past few years, we saw that Syngenta has acquired Cropio, among other similar announcements. This is a clear sign that the trend of Big Ag wanting to own farm data will only become stronger and more predominant in our industry. Ideally for them, these companies will turn every ag industry into what the pork industry for example is already: a group of price takers that act as contract farmers and serve the corporate purpose best.
There are a number of reasons for this big ag approach, namely to secure a better return on investment to shareholders. While there is nothing wrong with that for any business, the way it is done and the impact on said industry and its participants needs to be thought through by those most likely to be impacted.
Think of it this way: if these digital strategies did not decrease risk for the supplier, increase market penetration of their product, improve the efficiency of their go-to market strategies and thus improve overall profitability, then you would not see the millions of dollars being invested.
Ag retail organizations and coops have supplier relationships with most Big Chem companies and through these digital strategies are getting pressure to adopt Big Chem’s data collections platforms and get their growers to do the same. A prime example of this would be if Bayer were requiring retailers to achieve minimum sales of their data product FieldView in order to achieve rebates on seed that most retailers rely on to remain profitable if they want to sell Bayer products. The question that would have to be asked here is: who ensures the existence of ag retail organizations into the future? Farmers or manufacturers?
When ag retailers, agronomists, and growers choose a data platform, they really have to ask themselves: who benefits from my data, or my customers’ data, on this platform? If the answer is the same companies that sell you the inputs that you rely on to farm each year, it might make sense to think hard about the independence of the chosen platform.
To me, there is no such thing as a free lunch, and if the product I use is free or linked to something else then “I am” likely the product. So the most important thing here is that the questions get asked and serious thought and discussion is had and given to the repercussions.
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