Upstream Ag Insights - April 16th 2023

Essential news and analysis for agribusiness leaders

Apr 16, 2023

∙ Paid

Index for the week:

Winning in the Ag Machinery Space: Integrated Tech Stacks and Precision Technology
Bayer Announces Preceon Smart Corn System and Business Model Implications
ClimateAi Raises $22 Million in Series B Funding
What Technology Lessons Can Ag Lenders Learn from the Home Mortgage Industry?
Carbon Robotics Raises $30 Million in Funding to Scale AI-Powered LaserWeeder™ Platform
Q1 2023 AgTech Venture Capital Investment and Exit Round Up
Crop Insurance Considering Coverage on Intercrops
ChatGPT Implications for Agriculture
Interoperability Problems and Causes with Agriculture Data
Vertical Operating Systems: One System of Record to Rule Them All

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1. Winning in the Ag Machinery Space: Integrated Tech Stacks and Precision Technology - Upstream Ag Insights

When I first meaningfully wrote about autonomy and automation of smart equipment in August of 2021, I talked about my view that integration in the equipment space will win out.

While this view isn’t universally agreed upon, I think it is worthwhile to dive deeper into what "integration” means and why I think this way in the context of equipment and various precision and autonomous functionality.

With recent smart spraying announcements from AGCO and Bosch/BASF along with the Case IH acquisition of Hemisphere GPS I thought it would be a good time to dive deeper into integration.

To read more on Tech Stack’s, the Conservation Of Attractive Profits, Commoditization of Equipment and more check out the link.

2. Bayer Announces Preceon Smart Corn System - Successful Farming

In 2024 Bayer is set to launch their short-corn seed product. However, they are bringing it to market in a unique way—as a bundled solution with FieldView and agronomic support:

Short stature corn hybrids will offer increased lodging and greensnap tolerance in high winds while allowing for season-long access for standard ground rigs.
With FieldView digital insights, farmers can receive custom field placement and seeding rate recommendations.
Bayer and participating seed dealers will provide tailored agronomic support including personalized hands-on support and regional recommendations and best practices.

Input manufacturing companies like Bayer have historically been more product or point solution focused. Meaning, they sell a seed or a fungicide singularly and attempt to bundle these products together through incentive programs. Bayer has attempted to evolve this in the past with their outcome based pricing effort.

Preceon is unique in that it is a systems approach to product sales, integrating their FieldView digital system along with tailored agronomic support. Short corn itself does bring with it new opportunities to systematically approach in-season agronomics like fungicide application, foliar nutrition or top dress nitrogen applications which I suspect Bayer wants to ensure are taken advantage of by farmers to deliver better outcomes with the new corn product. But there is more.

The subtle change from outcome based pricing to Preceon is the monetization angle. Outcome based pricing was primarily a risk reduction tool for farmers that bundled products together and changed how farmers were paying for inputs. Preceon doesn’t change how farmers buy products, but evolves the Bayer’s ability to influence, add value and further monetize that farm customer.

In Business Models for the Future of Farming I highlighted then CEO of Bayer Crop Science, Liam Condon’s statements about their future three-pronged approach to monetizing digital capabilities:

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