Upstream Ag Insights - November 27th 2022

Essential news and analysis for agribusiness leaders

Welcome to the 146th Edition of Upstream Ag Insights!

Index for the week:

1. Vern Hawkins with Syngenta Crop Protection

2. Iowa Farmer Goes Bushels Up and Fertilizer Down with Biologicals

3. To Ditch Pesticides, Scientists Are Hacking Insects’ Sex Signals

4. New Technologies, Industry Partnership Among Key Highlights of an Expanding Seed Treatment Market

5. Quarterly Agribusiness Results

   1. Deveron

   2. John Deere

   3. Upstream Ag Insights Q3 2022 Results Summary

6. Carbon Corner

   1. Embracing Scope 3 Opportunities in the Agrifood Sector

   2. Tech Companies in Carbon Management

7. The Future of B2B Sales: The Big Reframe

Thanks for reading, sharing and subscribing!

And Happy Thanksgiving to All American Readers!

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1. Vern Hawkins with Syngenta Crop Protection - The Daily Scoop

This is a good interview with the President of North American Crop Protection for Syngenta, Vern Hawkins. I highlighted a few of the most quotes that stood out to me:

Our third growth engine is our digital solutions through AgriEdge, which represents about 30% of our branded business today in Crop Protection. It's really about helping growers use their own data to make better decisions and improve profitability on their farms.

Given the news from the likes of Corteva lately, it’s notable to see this comment. It’s important to consider the frame: “helping growers use their own data to make better decisions”, which is consistent with how Corteva has talked about their future in the digital space.

Right now, on a scale of one to 10, biologicals are probably a two to three of importance in our market. However, we have committed to become a market leader in biologicals over the next five to 10 years despite this being a very fragmented technological space. We hope to at least be in a five to six range (of importance) in five years’ time. It’s an active space right now, with a lot of people interested, but the potential is still largely undefined. Currently, we are focused on nutrient efficiency because we've learned that we can enhance a corn or soybean plant's production ability.

There are continued efforts by the likes of Syngenta and Corteva for example to get into the nutrient efficiency space. First, what’s encouraging about these comments (from Syngenta and others) is that when one of the big four crop protection and seed companies speak highly of a product/segment, it brings legitimacy to the entire market.

While nutrient efficiency still falls outside their traditional core competency, it is also one very specific thing: non-cannibalizing of their core business.

Crop protection companies touch everything associated with biotic stresses: nematodes, insects, weeds and disease. They do not however traditionally touch abiotic stresses or the multi-billion dollar fertilizer market.

Changing directly into biological crop protection does very little to grow their business in the short term, it simply replaces their current synthetic products, at best. However, nutrient efficiency as a focus of biologicals opens up an entire new segment and begins to tap into an entirely different area of the farmer budget. That means growth for their business and considering they have large distribution reach and a more recent acquisition of leading biological and nutrient company, Valagro, it gives some more internal know-how than some of their competitors might have.

This doesn’t mean easy growth though.

The competency necessary to effectively sell biostimulants and biofertilizers is actually very different than traditional crop protection. For example, biostimulants increasing “nutrient use efficiency” is less tangible to illustrate and communicate plus requires an understanding of soil fertility and complex soil interactions to position and understand where it will work best. Same with biofertilizers, for example, to effectively position Envita, an N fixation product Syngenta Canada now sells, there is a need to understand crop yield potential, residual nitrogen levels, protein premiums (in wheat) and much more. Without that understanding, the product expectations are unlikely to be communicated effectively and the outcomes have a higher chance of being suboptimal, both resulting in poor customer experience and ROI. Even with some internal knowledge, it takes effort; pointed training processes, incentives and marketing efforts to move the needle in this area.

I have talked about this at length in Upstream, specifically in The Sauce Paradox, The Funnel of Specificity and Dominant Logic: Bringing to Life the Cultural Challenge of Biologicals vs. Traditional Crop Protection.

When I see these moves continuously from the crop protection and seed companies I can’t help but wonder when the larger fertilizer companies (Eg: Yara and Mosaic) will become more externally vocal with their efforts in the biostimulant space through marketing as well as develop a stronger sales force or build more meaningful programs to leverage their strength in fertilizer and marry that with their biostimulant products.

For context: