Upstream Ag Insights - June 25th 2023

Essential news and analysis for agribusiness leaders

Jun 25, 2023

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Index for the week:

Bayer Crop Science Innovation Summit Highlights and Analysis
2023 Ag Biologicals Landscape
Guardian Agriculture Nets $20m Series A
Digital Battlegrounds: Bushel Emphasizes Ag Retail Offering
First Mid Bank & Trust Joins the GROWERS Platform
Corteva Agriscience Receives First USDA Verification for Biostimulant
Omnipower Future is Not Here Yet
Benson Hill Co-Founder Steps Down, Company Seeks New Permanent CEO
State of Deep Tech

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If you are new or were forwarded this e-mail, my name is Shane Thomas and this is Upstream Ag Insights, a weekly newsletter for agribusiness leaders making sense of the newest innovations and business dynamics in the agriculture industry.

1. Bayer Crop Science 2023 Innovation Summit Highlights and Analysis - Upstream Ag Insights

On June 20th Bayer Crop Science held an Innovation Summit in New York City where their leadership team went through not only their pipeline of products for the next 10+ years but unveiled their new positioning around this pipeline, emphasizing the enablement of regenerative agriculture with their products and systems.

The enormity of Bayer’s pipeline and what they went through would be challenging to cover in its entirety, so as usual, I focus primarily on the news that impacts the North American industry with extrapolations elsewhere when possible. Because of the breadth of topics, products, and areas, I have done my best to keep it flowing, but there is an index below if you prefer to navigate to one specific area.

To go through the entire Bayer presentation, see here:

Bayer Crop Science Innovation Summit Materials - Bayer Crop Science

Upstream Ag Insights Coverage Index:

Strategic Priorities
1. Strategic Summary
Seed: Breeding and Traits
1. Preceon Smart Corn System
2. Hybrid Wheat
Biofuel: CoverCress
Crop Protection
1. Protein Degraders
Biologicals
1. Nitrogen Fixation
Digital Agriculture
1. Farm of the Future and Retail Enablement
Miscellaneous and Interesting
Big Seed: A Divergence in Corteva and Bayer Strategy
Summary and Final Thoughts

Please note, the Bayer Innovation Summit Highlights and Analysis is very long. My aim was not to highlight their points but dive in deeper.

Given the influence of Bayer Crop Science on farming I think there is a wealth of insight from them about how they will be evolving their offering which will influence competitive dynamics across not just other input manufacturers but all areas of the industry, from finance, to insurance, to equipment companies, retailers, digital companies and more.

Related: Corteva 2023 R&D Innovation Update Highlights and Analysis - Upstream Ag Insights

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2. 2023 Ag Biologicals Landscape - The Mixing Bowl Hub

Along with the Western Growers we released our Ag Biologicals Landscape 2023 at the Salinas Biological Summit. Led by Chris Taylor, with support from Franziska Schottler, Rob Trice and Michael Rose we identified 1,200 companies with “Products derived from naturally occurring from micro and macro organisms, plant extracts, and other natural materials used to enhance crop production”. Around 400 companies appear on the Landscape.

The biological landscape is large, fragmented and complex to decipher.

In order to navigate the space myself over the past few years I have put together a list of hundreds of biological-based companies. However, what Western Growers and The Mixing Bowl Hub have done is an incredible layout to help decipher an ever growing space.

The layout is incredibly thoughtful too, working to group companies by living and non-living as well as biostimulatory (crop/soil health) and biocontrol.

As someone who has struggled to label my list of companies for myself, I commend how well put together this is.

Walt Duflock has already alluded to the potential of evolving the landscape in the future too.

One area for future iterations is around augmenters and enhancers.

For example, Jord BioScience (not shown) technology is intended to enhance the consistency of performance of other biologicals. Or 3Bar Bio (under biopesticides), which has the capability to increase the biological survivability of products through the supply chain. Meristem Crop Performance (not shown) has unique delivery technology. There are others, and depending on where the line wanted to be drawn, it could extend to fermentation / still manufacturing companies.

I have benefitted from The Mixing Bowls’ great landscape maps in the past and have already derived utility this past week in identifying companies I was not aware of.

If you have any interest in the area of biologicals I encourage you to check out the landscape. There is a high resolution download option within the heading link.

3. Guardian Agriculture Nets $20m Series A - AgFunder News

Guardian Agriculture has raised a $20 million Series A round led by Fall Line Capital to expand its autonomous drone technology to farms across the US and ramp-up manufacturing of its SC1 aircraft. The raise brings Guardian’s cumulative funding to $35 million.

Guardian Agriculture develops autonomous eVTOL systems with spraying capabilities for commercial-scale farming.

In 2020 I emphasized my newfound bullishness for drones stemming from improving data processing capabilities, autonomous technology, and improving regulations. The directional arrow of progress (efficiency + precision) illustrates the potential in drones for spraying and for data acquisition (with the right business models) if those initial hurdles could be figured out.

Guardian has worked at all of these and seemingly overcome other challenges, such as allowing the drone to manage the payload, manage battery charging and utilization and effectively spraying.

Check out the video of the SC1 in action on Twitter here.

There is still a long way to go to mainstream commercial uptake, but Guardian is unique in having a commercial offering, and the interest is immense.

CEO and founder Adam Bercu says the company already has more than $100 million in orders on a machine that starts at $120,000 and costs upwards of $300,000.

Guardian also has interesting corporate venture capital ag investors: Cavallo Ventures (Wilbur-Ellis CVC) and Leaps by Bayer FMC Ventures.

Wilbur-Ellis has ordered 400 systems from Guardian Agriculture.

The interest has been so significant that Bercu told Bloomberg, “We’ll be bottlenecked by manufacturing capacity for years…We’re turning folks down.”

They are currently taking orders out to 2025 for delivery. This raise I suspect enables them to better meet this demand.

The SC1 can do 40ac/hour at 5gal/ac, including the charging and filling. What is wild is they state a 1 minute “supercharge” and fill time— impressive and illustrates how this can streamline efficiency and make drones more enticing to service providers and the mainstream. It will be interesting to see how this supercharge performs across conditions, formulations etc.

The tank size is just 20 gallons, so the drone is doing 4 acres per fill at that 40ac/hour speed! If using fewer gallons per acre, it can do upwards of 60ac/hour.

It’s helpful to consider current spray productivity with large ground spray rigs. From spraying expert Tom Wolf at Sprayers 101:

For the base condition, the sprayer spent 15% of its driving time turning, and 37% of its on-field time stationary (i.e. filling). For every hour spent on the field, less than half the time (48%) was spent spraying. This resulted in an average productivity of 82 acres/h.
Increasing the spray speed to 18 mph increased average productivity to 93 acres/h, but it also increased the proportion of time spent turning and loading, resulting in just 40% of the field time spent spraying.
Decreasing the loading time from 20 to 10 minutes reduced the proportion of field time spent stationary to 23%, covering 100 acres/h at 14 mph. Surprisingly, this was the productivity-winner, resuling in 62% of on-field time spraying.

This contextualizes what current sprayers can cover per hour and where the enormous inefficiencies are.

The Guardian SC1 is not quite at the same level of productivity today. The SC1 is still highly capable, and their numbers illustrate how one might leverage the SCI in conjunction with a ground rig to optimize the efficiency of the entire spray operation and take engine hours off of the more expensive ground sprayer (~$750,000 USD).

To my knowledge, the SC1 does not currently have see and spray capabilities. Still, we can see how those would further increase the value, efficiency, and data acquisition capabilities of the Guardian offering to farmers and service providers.

There are several potential implications here across the industry:

Service - Spray service offerings at the retail level could change, and Wilbur-Ellis looks to be an innovator there, specifically in what comes across as the specialty markets on the west coast first.
Dispatching - Current software focuses on ground rig sprayers and fertilizer floaters. When considering drones, they add more complexity to fleet management and optimization. Software products like Raven Slingshot will likely evolve to offer this functionality.
Formulation technology - 5 gallons an acre water volume may be unnecessary for optimum coverage of crop protection products when using a drone. Crop protection products tend to be optimized to work with more water. If companies can establish strong performance at lower water volumes, their products could win out by improving drone spray efficiency and performing optimally with low water volumes (e.g., <2.5 gal/ac).

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