The silver lining: how COVID could spark a fire in animal ag
Prime Future 008: the weekly newsletter highlighting trends in animal protein
|Jun 13, 2020|
Set aside the immediate pain in animal ag caused by COVID, and let’s talk about the silver lining of how post-COVID trends could mean great things for animal agtech, based on two assumptions about the world:
More people will work remotely
Tech adoption will continue to increase
Proximity. Tech giants like Twitter and Facebook are giving employees the option to be remote forever. Instead of an engineer making 180k and paying $3k/month for a studio apartment in San Francisco, that engineer can move to Denver or Kansas City or even smaller towns and do the same work remotely while lowering cost of living dramatically and, in some cases, maintaining their earning level. As evidence this is actually happening a mere 3 months into the pandemic, 1 bedroom rentals in San Francisco are down 10%. The exodus from urban centers like SF & NYC has begun.
This likely means engineering talent will be closer to people who know animal agriculture.
This likely means entrepreneurial talent will be closer to people in animal ag.
This likely means people solving problems will be closer to people who need problems solved.
Which can only mean good things for the quality of solutions and rate of adoption.
Proximity means access to more prospective customers so entrepreneurs can avoid the “n of 1” problem, of building a solution for 1 customer that isn’t representative of the many. (A lot of folks attribute slow adoption in crop farming to the early assumptions made by entrepreneurs that all farmers are alike and all production systems are alike…a fatally flawed assumption.)
Proximity means the ability to actually get on farms, to gain direct visibility to the practical constraints of how a solution fits into a production system and a producer’s decision making process
Farmer Adoption. Satya Nadella, CEO of Microsoft, recently said “As COVID-19 impacts every aspect of work and life globally, Microsoft has seen two years' worth of digital transformation in just two months."
For example, many producers are getting a taste of new-to-them consumer technologies. The farmer who had never used Zoom just spent the last 12 weeks on Zoom for his/her Bible Study. Or the producer who always scoffed at urbanites ordering groceries online learned how to snag an elusive time slot for grocery pickup on Walmart’s website. Or they joined a Slack channel to access market intel from their risk management advisor.
With tech merging into the heartland and producers increasingly using technology, this sets up a perfect storm. I really hate COVID-19 and its destruction, but these resulting trends should lead to good outcomes & new solutions in animal agriculture.
The Rise of Precision ____ in Animal Protein
Here’s a quote from an AgFunder article about precision ag adoption rates:
“Farmers’ interest in precision ag is divided into four categories: the top 1-2% who will try anything, 10-15% who are not as bullish but still cutting edge, the 45-55% who will adopt once the product is proven, and the remainder being the most skeptical.”
Keep in mind the “precision” wave has been crashing into row crop farming for 5-7 years while its just barely starting to sneak up on animal agriculture; you only see it if you squint. Terms like Precision Nutrition, Precision Farming, Precision Health are still just whispers around the edges of the industry. My hypothesis is that the animal precision farming adoption rates can look much better than crop if the post-COVID trends I highlighted above play out.
One element of the precision wave has been the strategics in the space (input suppliers & retailers) embracing precision tools as part of a comprehensive offering to producers: Bayer’s Climate Corp Field View, Corteva’s Granular, Syngenta’s AgriEdge. Soon we’ll take a deeper look at the build vs buy paths, but suffice it to say that in animal agriculture there are very few companies making public moves in the digital space; although Zoetis is leading the way, they are still early in the execution of their strategy and turning their strategic roll up into value for producers.
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Seana Day (Better Food Ventures) has built a FarmTech Map highlighting the clusters of innovation specifically for producers. This is heavy on tech for plant agriculture but could foreshadow the types of innovation headed to animal agriculture.
From the AgFunder article:
Although rural connectivity is still woefully inadequate and adoption barriers remain, key aspects of digital infrastructure are starting to fulfill the promise of FarmTech. If you think about the investments in massive datasets, 53% of the $836 million invested in Farm Management Software, Sensing and IoT went into just nine deals in 2019…all in aerial remote sensing companies. I think this suggests that we are getting a feel for the power of scalable data sources. This doesn’t at all minimize the importance of ground-truthed data from IoT monitoring and remote sensing in the field; in fact, it enhances the value of the data for better decision support.
We’ve organized FarmTech around the principle farmer activities:
Digital Agronomy and Production: encompassing much of the IoT, robotics, and automation, and remote sensing activity;
Planning and Farm Management: intersecting across digital agronomy, resource management, and business planning and execution; and
Market Access and Financing: tools and technologies used by farmers, farm managers, and crop buyers to access markets and financing.
Great Ag Read: The Alchemy of Air
If you are into ag and history, “The Alchemy of Air” will blow your mind as the author dives into the history of fertilizer and Germany from WW1 - WW2. Think the subjects are unrelated? Think again.
Here’s a quick summary of the book: Back in the day, farmers used animal manure for fertilizer but it wasn’t great. Until rich deposits of bat guano were found in South America, it was a game changer and bat guano was shipped all over the world to farmers. Until it ran out.
Then saltpeter deposits were discovered in South America and was shipped all over the world to farmers. But in the late 1800’s / early 1900’s economists started declaring that population growth would result in mass starvation due to limitations in crop yields. So a German scientist decided he was going to fix that problem.
Fritz Haber decided to save humanity by creating a way to turn nitrogen from the air into fixed nitrogen for fertilizer. And he did.
He licensed his machine to BASF and a young engineer, Carl Bosch, was tasked with turning Haber’s blueprint into an industrial scale manufacturing plant. And he did. He created the largest manufacturing facility BASF had.
But nitrogen is not only useful as fertilizer….its also useful in explosives or gun powder. And Haber’s machine and Bosch’s facility were coming into full production just in time for WW1. Many say this single resource allowed Germany to go to war, or at a minimum to stay in the war for much longer.
Ok so then of course Germany is paying reparations it can’t pay so it prints a bunch of money, which causes hyperinflation and the economy crashes. Then the Great Depression hits and the economy further collapses. Then Hitler enters the scene.
As Hitler removed Jews from professional roles and from society, this included top scientists - including Haber!
In the meantime, Bosch has figured out how to manufacture synthetic gasoline and synthetic rubber at his massive facility. The plant becomes central to Hitler’s war plans. A ways into WW2, the US begins focusing solely on destroying the manufacturing facility. 1 person estimated the war could have ended in 8 weeks if the entire strategy to defeat Hitler was focused on destroying the facility.
1. Agriculture history is world history.
2. Anything can be used for good, or for evil.
3. Sometimes you have to just decide to solve a problem and find a way.
Here’s the Amazon link to order the book, you’re welcome :)
Janette Barnard works to enable technologies throughout the animal protein value chain. She leveraged her commercial experience with Elanco Animal Health, Cargill, and McDonald’s Global Supply Chain team to launch and grow two animal protein focused startups. Janette is now a principle in Rock Road Consulting, helping companies to launch, source, and fund innovation, and writer of Prime Future.