Fields of Data: Monsanto and Others Use Agri-Data to Upsell Farmers
Agriculture Industry Stakeholders Also Grapple with Data-Ownership and Security Issues
The acquisition of data companies isn't just a trend in Silicon Valley and Madison Avenue. It's happening out on the plains as well. Agribusiness colossus Monsanto bought a data and analytics firm last year for $930 million. Now that firm -- Climate Corp. -- is supplementing its data services and staff through the acquisition of a small Chicago startup, 640 Labs.
The entire agricultural industry is undergoing a massive shift away from planting-by-gut and historical weather data towards "precision agriculture," and companies like Monsanto are marketing products and services tailored to farmers based on the data they harvest.
Monsanto's goal to "grow more with less," as Anthony Osborne, VP of marketing for the firm's subsidiary, Climate Corp., put it, is in part predicated on farmers using modern data services to plant more efficiently with seeds and fertilizer customized for their soil. That creates a significant opportunity for Monsanto to develop a new line of products and services facilitating precision farming.
Climate Corp. is not unlike other firms providing free analytics tools then later offering paid premium versions -- think Google Analytics. Once the system proves beneficial to farmer clients, said Mr. Osborne, "then we can move them into paid products." The company sells its portfolio of data services through retailers that sell seeds, fertilizer and other farm supplies.
Climate Corp. has had a "good uptick" in purchases of its paid analytics product, Climate Pro, in the past year, according to Mr. Osborne. The company also is expanding a product that uses satellite data to show farmers images of their fields and where trouble spots are. They may consult the satellite images on their tablet devices while out in their fields, then go directly to that patch of dirt.
"Throughout history, that's been done by a guy walking through a field," said Mr. Osborne.
Today's farm equipment, like our automobiles, are computers pumping out and acting on steady streams of data. Auto-steering technologies, for instance, help farmers drive equipment in straight rows using GPS data. 640 Labs offers a system that grabs geo-tagged data from tractors, combines and other equipment, sends it to farmers' mobile devices, and allows them to store it in the cloud for real-time and future analysis and reports.
The precision farming trend is spurring startup activity. Small agri-tech firm Precision Planting offers a digital platform that helps farmers seed fields and maintain seed depth.
Farmobile, a small outfit launched in 2013, has a system called Electronic Farm Record that stores and organizes farm data for analysis.
A full-scale ad battle has yet to break out in the space, but the companies are honing their pitches.
The Kansas-based Farmobile appeals to farmers by stressing that the system and its data is "farmer-owned," and plans to let farmers generate revenue from their own data by allowing them to pick and choose what information they are willing to disseminate to potential data buyers like pesticide producers or commodity traders.
"A farmer at the end of the year creates kind of a unique work of art on the land," said Jason Tatge, CEO and founder of Farmobile. "It's kind of similar to what a writer would do using paper and pen and ink," he said regarding the data farmers generate. "We're trying to create a way for these farmers to benefit."
That notion of control and revenue streams for those creating the data may not have found a place in the world of consumer data yet, but it is becoming a reality for farmers.
"We accelerated interests and it probably accelerated concerns [about] 'What's going to happen to my data?'" said Mr. Osborne. Farmer clients worry the information could be exploited by Monsanto or other companies to alter prices for seeds and other products, for example.
"The data the farmer provides us, they own that data," said Mr. Osborne, adding that Monsanto and Climate Corp. use client information only to improve products, unless farmer clients provide explicit consent.
Firms including Monsanto, Dow AgroSciences and DuPont Pioneer signed an agreement in November which will be overseen by the American Farm Bureau Federation, a non-governmental organization comprised of farm and ranch businesses. A set of principles agreed upon by industry stakeholders call for farmer ownership of data, as well as transparency regarding data collection and use by equipment manufacturers. The principles also call for farmer education about data rights and responsibilities.
"At this point in time, we are putting the principles out to other ag tech providers to see if they support the principles and would like to sign on the document," said Mary Kay Thatcher, senior director of congressional relations at the Farm Bureau. The organization is developing a "Transparency Evaluator Tool" to gauge whether companies are abiding by their corporate data and privacy policies and contracts with farmer clients.
"For example, if an ag tech provider says they do not sell or share a farmer's data, is that reflected in the contract?" said Ms. Thatcher.
"We anticipate many more farmers will participate in big data technology in the future and we believe it will be beneficial to producers in terms of sustainability, profitability and environmental impacts," she continued. "However, there is also a lot of fear in the countryside about privacy, security and usage of data. That is our main focus today."