Upstream Ag Insights - December 4th 2022

Essential news and analysis for agribusiness leaders

Welcome to the 147th Edition of Upstream Ag Insights!

Index for the week:

1. Finding Asymmetric Upside in Ag Retail and Agribusiness

2. Corteva Agriscience Signs Agreement to Acquire Stoller Group, One of the Largest Independent Biologicals Companies in the Industry

3. AgVend Introduces Point-of-Action Financing in Its Digital Enablement Platform

4. Climate Related Financial Disclosures

5. Autonomy Corner

   1. John Deere Q4 2022 Investor Call Highlights

   2. Why is Autonomy in Ag So Hard?

   3. Thinking of starting a weeding robot startup? Don’t — you’re too late

6. AgTech Startup Ground Truth Raises $4 million

7. MyLand Completes $12M Funding

8. AgTech Start-up’s: Positioning for Farmers/Industry vs. Investors

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1. Finding Asymmetric Upside in Ag Retail and Agribusiness - Upstream Ag Insights

An asymmetric opportunity is simply one in which the upside of a decision or action is much greater than the downside.

Reading Nassim Nicholas Taleb’s book “Antifragile: Things That Gain from Disorder” was where I first encountered the concept and a definition for what he calls “Fundamental Asymmetry”:

Fundamental Asymmetry: When someone has more upside than downside in a certain situation, he is antifragile and tends to gain from (a) volatility, (b) randomness, (c) errors, (d) uncertainty, (e) stressors, (f) time.

Every asymmetric opportunity starts with a contrarian idea. If it doesn’t, there’s no asymmetry.

This can be brought to life very simply in ag retail. I often hear “we are high service” or “we scout fields” or “we will deliver chemical at 11pm at night during planting”. Guess what? Those are table stakes. Every retailer worth their salt does these things. They aren’t the differentiators that bring disproportionate customer delight or monetary upside.

Said another way, if few groups do something that is great, the reward will get concentrated into the few that took on the risk. Being different can disproportionately accrue big upside.

This week I go through opportunities to look for asymmetric upside by reading this weeks Upstream Ag Insights article.

Related: Ag Retail's Value Proposition: There’s No Easy Button - The Daily Scoop (Note: I highlight and comment on this article within the Asymmetric Upside in Ag Retail and Agribusiness article)

2. Corteva Agriscience Signs Agreement to Acquire Stoller Group, One of the Largest Independent Biologicals Companies in the Industry - PR Newswire

Corteva, Inc. and Stoller Group, Inc. today announced that Corteva has signed a definitive agreement to acquire Houston-based Stoller, one of the largest independent Biologicals companies in the industry.  With operations and sales in more than 60 countries and 2022 forecasted revenues of more than $400 million, Stoller brings immediate scale and profitability, with EBITDA margins that will be accretive to Corteva.

Corteva has been emphasizing their desire to build out the biological muscle of their business since new CEO Chuck Magro taken over the helm.

This week, Corteva announced the biggest biostimulant acquisition they have made, purchasing Stoller for $1.2 billion in cash. This price represents an enterprise value multiple of 12x based on Stoller's expected EBITDA for 2022, according to the release.