Upstream Ag Professional - January 14th 2024
Essential news and analysis for agribusiness leaders
Welcome to the 24th Edition of Upstream Ag Professional!
Index for the week:
The Insight is the Edge: Why CNH Industrial Struggles to Catch Up
The Hierarchy of Agronomic Needs and Biological Growth
Mosaic Biosciences Brings Transparency to Agriculture Biologicals Market
FieldView™: Introducing Our New Subscription Tiers
Dean Banks Appointed CEO of Indigo Ag and CEO-Partner of Flagship Pioneering
Co-operative Mergers and Partnerships
Can A Scouting Technology Increase Farmer Trust?
David Friedberg on How To Build a Billion Dollar Startup
CropLife’s Buying Intentions Survey: Here’s What Ag Retailers Plan to Purchase in 2024
Farmers Edge Provides an Update on Proposal from Fairfax and Enters into Letter of Intent
The Structure of Scientific Revolutions
Audio Summary of Upstream Ag Professional and Upstream Ag Searchable Database and LLM functionality available at the end of the edition.
1. The Insight is the Edge: Why CNH Industrial Struggles to Keep Up - Upstream Ag Professional
Importance of Leading with Unique Insights: World-class companies tend to lead their customers, not follow them, using unique insights to drive their product roadmaps, strategy and offerings. Listening to CDO at CNH Industrial Marc Kermisch, in contrast, seemingly states that their customers guide them.
The Need for a Stronger, Customer-Oriented Strategy: Highlighting a comparison between Amazon and Wal-Mart illustrates the importance of innovation and a customer-focused approach. CNH Industrial, by seemingly not having a unique customer insight or a proactive innovation strategy, is at risk of falling behind competitors who are more aggressively pursuing technological advancements through a unique vision and problem-led insights.
Over the holidays, I listened to one of my must-listen agriculture podcasts, The Future of Agriculture by Tim Hammerich.
On the particular episode I want to highlight, Tim had Marc Kermisch, Chief Digital and Information Officer of CNH Industrial.
There are many comments from Mr. Kermisch on the future of precision agriculture and the CNH Industrial business that make the podcast worth the listen.
My biggest takeaway, though?
I can’t help but come away from listening and wondering about the vision of CNH Industrial.
In fact, the messaging comes across as CNH Industrial is content being #2 in North America to John Deere, showing little desire for leadership in any future-driven area, whether it’s autonomy, precision capabilities, or new business models.
A comment that stands out to me reinforcing this was the following regarding annual recurring revenue (emphasis mine):
“If it makes sense for the farmer and the farmer wants to go there, we will go there…we want to make sure the farmer is leading us through that business model change”
If they do not deem recurring revenue to be the future, that’s understandable. However, the rationale behind that view is noteworthy because it likely guides more than just their business model endeavors.
World-class companies lead their customers. Not vice versa.
These companies lead their customers based on unique insights that drive customer actions and behavior.
In most industries, the businesses with the insights have the edge.
CNH Industrial doesn’t clearly state a unique insight or vision guiding them, or their customers, towards the future of agriculture— whether listening to this podcast, their 2022 Tech Day, or reading investor materials, it remains unclear where they are leading their customer and why.
For the full article and background, check out the Upstream Ag Professional member-only article.
Related: Deere Highlights Software as a Service Tech at CES 2024 - Precision Farming Dealer
Deere confirmed the See & pray software-as-a-service (SaaS) pricing model will vary by customer but said it is currently charging $4 per acre in the test run with corn growers.
2. The Hierarchy of Agronomic Needs and Biological Growth - Upstream Ag Professional
Hierarchy of Agronomic Needs Affects Input Choices: Farmers prioritize foundational and functional needs in their input choices, such as herbicides and seed, often relegating optimization options, like biostimulants, to secondary consideration. This hierarchy becomes more pronounced during economically challenging times, where farmers are more likely to cut back on inputs perceived as less essential.
Influence of Positioning and Messaging on Biostimulant Sales: The success of biostimulants in the market can be significantly influenced by how they are perceived and there is an opportunity to elevate the understanding of biostimulants. Focusing on specific use cases and benefits, rather than a broad, all-encompassing approach, can lead to more effective marketing and increased product utilization.
Generally, we see input costs and farmer incomes affect the buying habits of inputs.
My experience is that when farm income declines, crop prices drop, or weather is suboptimal, certain segments of inputs are cut before others. I think of it as a Hierarchy of Agronomic Needs for the farmer: