Welcome to the 41st Edition of Upstream Ag Professional!
Index:
Jevon's Paradox, Brand Erosion and Precision Applications in Agriculture
Seeing Into the Future of Farm Autonomy
Precision Ag and Patents: ‘Farmers increasingly interested in more precise planting’
FMC Corporation announces multi-year collaboration with AgroSpheres
AgZen’s Vishnu Jayaprakash on spraying, praying, and sticky droplets
GenerativeAI and Agriculture
Generating (Somewhat) New Biology with AI
AlphaFold 3 predicts the structure and interactions of molecules
Phi-3: Redefining What’s Possible with SLMs
LLM Search Functionality
Venture Capital’s Space for Sheep
Other Interesting Ag Articles
Thank you for your continued support of Upstream Ag!
And Happy Mothers Day to all the Moms reading!
1. Jevons Paradox, Complement Disruption and Precision Applications in Agriculture: Implications for Crop Protection Manufacturers - Upstream Ag Professional
Key Takeaways:
Jevons Paradox applies to crop input usage and precision agriculture. It states that as efficiency in resource usage increases, such as with precision spraying, there's a chance that this efficiency improvement leads to increased consumption of crop inputs rather than reductions.
Precision spraying technologies have other risks to input manufacturers though, such as a commoditization of differentiated IP/brands. This can result in lower margins for crop input companies as differentiation shifts from the input itself to the precision spraying technology.
Crop input manufacturers should assess business models and alliances in response to the potential implications of precision spraying. This includes exploring strategic partnerships, and leveraging data-driven differentiation.
Jevons Paradox is named after the English economist William Stanley Jevons. It’s a counterintuitive economic theory that suggests improvements in efficiency for using a resource can lead to an overall increase in the consumption of that resource, rather than a decrease. This paradox has primarily been applied to sustainability efforts, specifically in the context of energy consumption and environmental conservation.
The implications reach beyond energy consumption, though. More specifically, the concept can be directly applied to crop input usage and precision agriculture.
For the full article, including understanding Jevons Paradox, the extrapolation to farming, examples of crop protection evolving and a discovery of second order implications of precision application leading to commoditization of crop protection products, check out the full article above.
Index:
Understanding Jevons Paradox
Real World Examples
Energy and Iron
Transportation
Extrapolating to Farming
Yield and Quality as a Primary Revenue Method
Early Examples and Practice Evolution
Herbicide Resistance
Not an Isolated Technology
Second Order Implications
Commoditization of Crop Protection Products
The Jobs-to-be-Done Lens Behind Crop Input Decision Making
Disruption Through Complements
Access to Information
Final Thoughts
Implications for Input Manufacturers
2. Seeing Into the Future of Farm Autonomy - Tenacious Ventures
Key Takeaways:
SwarmFarm's success acquiring more than 4m ac underscores the importance of identifying the most valuable use case for a customer and focusing diligently on it to build out a market. By prioritizing precision weed control, SwarmFarm demonstrated a strong return on investment for farmers and laid the foundation for broader adoption of its autonomous solutions.
The integration of autonomy and precision applications offers the opportunity to optimize outcomes in farming. The emphasis should remain on using best-in-class inputs to deliver superior results, not trying to bring up inferior products.
SwarmFarm is an integrated autonomy company with a compelling vision for how autonomy will transform agriculture.
I always enjoy learning more about SwarmFarm’s vision. In this interview with Tenacious Ventures they share some notable stats and viewpoints, including:
With over 4m acres already autonomously managed by their robots
An impressive number.
They also indirectly illustrate the importance of identifying the most valuable use case and focusing diligently on it to build out a market. In the instance of SwarmFarm, precision weed control:
Some people will say, ‘oh, you guys are just a spray company’. And, well, we’re not, so it’s an excellent conversation to have.
What we’ve built alongside our robots is an app ecosystem, SwarmConnect. It's kind of like the Apple App Store, in that we allow independent developers to release their technology on our robots with hardware and software integrations. We create a path for other independent technology developers to get their products to market faster, and deliver more value to growers by being on a robot.
But we had to start somewhere that delivers a strong ROI for farmers or they wouldn’t adopt it.
Weed management is a crucial agronomic consideration for farmers, each year, multiple times per year. This is another example focus being crucial.
The following is sentiment that I am seeing more frequently surrounding biologicals and precision application:
Right now, if you have a biological product with only 60% efficacy, farmers won't use it. But if it works 60% of the time or targets 60% of the pests it’s supposed to treat, when you start adding that to autonomy and you do it, maybe, on a weekly, three day, or even a four-hour cycle, suddenly that product that was initially disregarded, finds a market and becomes a useful tool for farmers.
I have a different perspective surrounding the biologicals and precision applications, though.
Farmers won’t use a product that is 60% efficacy (or anything lower than that market standard), when the market standard is say 85% or 95%. No matter if the farmer has autonomous and precision assets or not.
Applying inferior products more often still has an immediate monetary cost (more application of an inferior products = $$) and an uncertainty cost (does this lower control lead to other implications and will I have to manage more later?) versus using the best product available.
If a product isn’t able to stand on its own without precision application, then it should’t be commercialized. If a farmer can use a market leading input product within the autonomous system, that is still going to be the desire. I talked about this a few weeks ago in Biologicals are ‘economically unfeasible’ According to Report: The Shortcomings and Opportunities.
SwarmFarm goes onto the state the following:
It’s the same situation for timing of application- some of these products work best at night when there is less UV light around, humidity is higher, and temperatures are cooler- that’s the perfect use case for robotic application.
This is spot on. Optimizing outcomes is the opportunity with autonomy and precision applications. Best in class inputs with autonomy and precision application can deliver previously unattainable results, that should be the emphasis.
3. Precision Ag and Patents: ‘Farmers increasingly interested in more precise planting’ - Future Farming
Key Takeaways
Precision agriculture encompasses a farm management approach focused on observing, measuring, and responding to temporal and spatial variability to enhance production output and farm economics. It's more than just farm management software or soil sensors; it's about agronomy at a higher resolution, allowing for precise input management timing and placement.
Farmers are increasingly seeking more precision capabilities integrated into the assets they already use, such as sprayers or planters. Start-ups and equipment manufacturing companies are recognizing and investing in this demand, with innovations ranging from seed orientation technologies to advanced plant identification systems. As precision agriculture evolves, there remains potential for enhancements that optimize yield, quality, and operational efficiency, leading to better returns for farmers, as well as equipment manufacturers.
What precision ag is or isn’t often gets muddied in conversations due to conflating precision ag with a singular technology — farm management software or a soil sensor technology for example.
Precision agriculture is a farm management approach based on observing, measuring and responding to temporal and spatial variability across the farm to improve production output and farm economics.
At its most basic, precision agriculture is agronomy applied at a higher resolution.
In farming, we have increasingly seen a shrinking unit of focus:
Farm → Crop → Field → Zone → Plant
We have experiened precision improvements also from managing by parameter of any given input. In the instance of seed for example it could be:
Variety→Planting Rate→Depth & Downforce→Placement→Orientation
Meaning, you can seed a different variety in a different area of the field, vary the rate based on considerations like yield potential or lodging risk and then dial in that variety and rate to the optimal planting depth, at an optimal distance from a fertilizer band at a specific seed orientation (more on this below).
The ability to manage input placement is enabled primarily through high-tech agricultural equipment that includes:
Telematics and Sensors
Guidance (eg: RTK)
Data Management
Sophisticated engineering
Precision agriculture is still in the early earnings of its potential.
In the above article, it suggests farmers want more precision capabilities. I agree, particularly when looking at top farmers. The opportunity is immense.
Not only are start-ups betting on precision agriculture, but those best positioned to enable, equipment manufacturing companies, are betting, on the growth of precision agriculture demand.
I like looking at ag company patents to get a glimpse of what innovation we might see in the coming years. There are ample interesting patents and patent applications that stand out in regards to precision agriculture.
One patent-type being around seed orientation.
There has been plenty of research done around planting where researchers position seeds a specific way in-furrow— specifically in corn, with the seed tip down, which has delivered interesting results, including this work from Pioneer Seeds:
Seeds planted with the kernel tip down emerged about 20 GDUs earlier than those planted with the tip pointed up.
Seeds planted tip down with the germ oriented toward the inter-row had greater light capture and lower temperature under the canopy during late vegetative growth stages.
Leading to other benefits like better stand establishment, more uniform emergence, more efficient light utilization and quicker canopy closure. These all have yield and quality implications.
One of the limitations of this research has been the lack of planting technology to take advantage of its insights. We have gotten incrementally closer with the commercial release of products like ExactShot from John Deere that enables in-furrow varying of fertilizer for example, and there are more seemingly coming.
Precision Planting (AGCO) was granted a patent in 2021 that is a “system for seed orientation with adjustable singulators during planting.”
John Deere applied for a patent later on in 2021 with a similar vision of having “a method for planting a seed with a desired planted seed orientation within an agricultural field.”
There are plenty of avenues to further enhancing precision, too.
Take just one more example from a list of Blue River Technology (John Deere) patents/patent applications:
Plant group identification: A farming machine moves through a field and includes an image sensor that captures an image of a plant in the field. A control system accesses the captured image and applies the image to a machine learned plant identification model. The plant identification model identifies pixels representing the plant and categorizes the plant into a plant group (e.g., plant species). The identified pixels are labeled as the plant group and a location of the pixels is determined. The control system actuates a treatment mechanism based on the identified plant group and location. Additionally, the images from the image sensor and the plant identification model may be used to generate a plant identification map. The plant identification map is a map of the field that indicates the locations of the plant groups identified by the plant identification model.
When layering this capability into See and Spray assets, it delivers a more precise ability to inform future herbicide product decisions, rate decisions, mixing decisions and more.
While there is still room for base level adoption of precision capabilities, there are farmers that increasingly demand more precision tools, directly integrated into the assets they are needing to buy— like sprayers or planters.
4. FMC Corporation Announces Multi-Year Collaboration with AgroSpheres - FMC
Key Takeaways
FMC Corporation's agreement with AgroSpheres marks a move towards accelerating the discovery and development of novel bioinsecticides. This collaboration leverages AgroSpheres' proprietary active ingredients and formulation capabilities in biological product development. With a focus on RNA-based solutions and the potential synergies with FMC's diamide molecules, the partnership signifies a pivotal step towards enhancing crop protection efficacy, managing pest resistance, and driving innovation for FMC.
AgroSpheres' innovative technology, AgriCell, facilitates the effective delivery of small bio-based molecules like peptides, RNA, and volatile compounds such as pheromones in agriculture. By overcoming challenges related to stability, performance, and targeted uptake of actives in pests, AgroSpheres encapsulation technology, plus novel active ingredients, unlocks potential for the industry and AgroSpheres themselves.
FMC Corporation, today announced a research agreement with AgroSpheres, a biotechnology company pioneering breakthroughs in sustainable crop protection and crop health. The agreement will accelerate the discovery and development of novel bioinsecticides, which is a key part of FMC's long-range strategic plan.
AgroSpheres is widely known for having encapsulation technology that can effectively support the usage of small, bio-based molecules like peptides, and nucleic acids (RNA) along with volatile compounds such as pheromones in agriculture. AgroSpheres’ patented AgriCell technology allows for improved stability, performance and targeted uptake of actives in pests.
In a world where bio-based crop input products are forecasted to grow at a double-digit CAGR, and one of the biggest challenges is delivering them effectively to the mode of action in the target plant or organism that means significant potential for AgroSpheres. Peptides and RNA, for example, have several major challenges: high cost of goods, challenges with bioavailability, and instability in the formulation and in the field due to things like UV light breaking it down. AgroSpheres technology can help to overcome these challenges. For example, its AgriCell product can withstand a pH range of 4 to 11 and temperatures of 0–54°C, with a shelf life of 24–30 months.
What is lesser known is that they also boast their own internal pipeline of proprietary active ingredients— during a call last year with CEO Payam Pourtaheri, he mentioned they have their own proprietary molecules in the fungicide and insecticide segments, the first product of which is expected to receive EPA approval this year and commercialized in 2025.
The strategy to develop their own active ingredients started over three years ago and has resulted in Agrospheres building their own library of novel biomolecules, such as RNAs and peptides, along with building their own manufacturing capabilities.
That makes AgroSpheres a vertically integrated active ingredient & technology development company in the space of biological inputs.
This agreement with FMC leans into not only the formulation capabilities, but also their active ingredients. AgroSpheres CTO Ameer Shakeel stated the following to me:
This development agreement is on our internal pipeline; Manufacturing, Formulation and Active Ingredients coming from AgroSpheres. When we first started off, we did not have our own Actives so we were reliant on others to utilize our technology in a product. Over the past 3 years or so we launched our strategy of vertical integration in the area of biological product development.
FMC is also an investor in AgroSpheres. During their 2023 investor day, FMC highlighted their partnership with AgroSpheres. At the event, FMC emphasized its efforts surrounding pheromone-based products and the desire to allow farmers to apply them in row crops, similar to how they would any other insecticide product. Pheromones are volatile molecules that AgroSpheres encapsulation technology is compatible with. On top, the aforementioned AgriCell product enables a consistent gene-silencing response that could be valuable for FMC. When target pests, such as fall armyworms, consume a plant treated with AgriCell, the RNA elicits a cellular response that kills the insect.
However, there was no formal commercial agreement in place. Until now.
This collaboration is the first where an external agribusiness is making an investment to license/co-develop AgroSpheres internal pipeline of actives. The announcement emphasized RNA, which AgroSpheres confirmed is a focus. They also stated there will be utilization of novel RNA-Protein combinations for pyramiding/stacking modes of action, which is compelling.
Stacking of different RNA-protein combinations is interesting. And given FMC’s diamide business, the agreement is even more compelling for both sides.
FMC today is effectively an insecticide company, with 59% of its revenue, or $2.65 billion, coming from insecticides. FMC’s diamide business, Rynaxypyr® and Cyazypyr® active ingredients, continue to be the key portfolio driver, making up approximately $1.8 billion in combined sales and 39% of the total revenue in 2023. FMC does not breakout margins by segment or for the diamides specifically, but given the current differentiated nature of the diamides, it wouldn’t surprise me if 50% of the entire companies EBITDA came from the diamides. Rynaxypyr alone makes up almost 80% of the diamide business, which means around $1.4 Billion, or just shy of 33% of FMC revenue comes from one molecule. FMC leadership has been under scrutiny surrounding their diamide patent viability around the world.
I bring this up because AgroSpheres mentioned that their actives could have synergy with diamide molecules, which I would extrapolate to indicating management of pest resistance and enhanced efficacy. The resistance component is a key benefit and that insight also indicates that AgroSpheres technology offers another formulation avenue to manage the lifespan of their diamide business with a novel product formulation:
For FMC being pressured on the viability of their diamide patents and long term margins from investors and short sellers, this AgroSpheres agreement provides another tool for them.
Related: Foundations of Product Life Cycle Management (PLCM) in the Chemical Industry - Linkedin
