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Upstream Ag Insights Podcast
Upstream Ag Professional - October 20th 2024
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Upstream Ag Professional - October 20th 2024

Essential news and analysis for agribusiness leaders.

Welcome to the 64th Edition of Upstream Ag Professional!

Index

  1. McKinsey Global Farmer Insights 2024 Highlights and Analysis

  2. Simplify to Succeed: Why Removal Can Lead to Greater Gains in Agribusiness

  3. Acadian Plant Health™ and BASF Agricultural Solutions Partner to Innovate Climate-Resilient Solutions for Sustainable Agriculture

  4. How ‘vaccinating’ plants could reduce pesticide use and secure global food supplies

  5. AgTech Pitch Breakdown: Fractal Ag, with Ben Gordon

  6. Vestaron Corporation Announces Strategic Collaboration with ADM for Production of Peptide-Based Crop Protection Products

  7. Syngenta Crop Protection and Taranis Partner to Drive AI-Powered Agronomy Solutions and Business Opportunities for Retailers

  8. ICYMI: The Rise of Biologicals and Specialty Fertilizer: A Report on Agribusiness Strategy, Progress and Initiatives

  9. Malcolm Gladwell's New Take on Tipping Points

  10. Other Ag Articles (7 this week)


Follow up from Last Week’s Edition: Biologicals vs. Synthetics

Last week I talked about spinosyns and pyrethrins and biologicals compared to synthetics and looked at molecules and their titles through the lens of LD50 and production methods.

I missed a major component. Pam Marrone was kind enough to share her expertise and correct me, highlighting the miss on my end (emphasis mine):

Regarding the difference between spinosyns, pyrethrum and whether registered as biopesticide or synthetic (these two are as you point out). EPA requires submission to the Biochemical Classification Committee for this determination. The most important consideration is does it have a toxic mode of action. Pyrethrum works on sodium channels in both insects and people so hence, toxic mode of action. Spinosyns work on GABA receptors, of which they are in both humans and insects, hence “toxic mode of action.” 

1. McKinsey Global Farmer Insights 2024 Highlights and Analysis - Upstream Ag Professional

The McKinsey Global Farmer Insights Report for 2024 highlights the challenges farmers face globally, such as rising input costs, extreme weather, and commodity price fluctuations. It explores the priority of improving productivity through agricultural technologies, biological products, and sustainable practices.

In the first quarter of 2024, McKinsey interviewed ~4,400 farmers in Europe (France, Germany, and the Netherlands), India, Latin America (Argentina, Brazil, and Mexico), and North America (Canada and the United States). The survey is the newest since 2022.

The survey covered five main areas:

  • farmers’ views of profit risks and opportunities

  • farmers’ outlook on future profits

  • adoption of sustainable practices

  • adoption of products and technology

  • purchasing channels and main influencers on the purchasing journey.

Key Takeaways

In the Upstream Ag Professional article linked above, I expand on each of these points, highlight key images and augment with information, data and insight from various external sources.
  1. Input prices remain the top concern, with 48% of farmers noting price increases as the main risk to profits.

  2. European and North American farmers more pessimistic on future profits. In North America, the proportion of farmers expecting lower profits over the next two years has risen by 16 percentage points compared with 2022.

  3. Adoption of biocontrols and bionutrients has been growing globally. 31% of farmers are using bionutrients, while 20 percent are using biocontrols. In the United States a blended 23% of farmers are using biostimulants and/or biocontrols, with Canada coming in at 14%. Farmers in Brazil lead in the use of both bionutrients and biocontrols, with bionutrition products coming in at 64%.

  4. About 90% of farmers using biologicals said they expect to maintain or increase spending on bio-based products. Some 63% will maintain or increase spending on biologicals regardless of changes in crop protection and fertilizer prices.

  5. Across all regions, the percentage of farmers who said they are currently participating in carbon programs is low—just 12 percent compared to 54 percent who have heard of carbon programs but are not participating.

  6. Farmers globally are more inclined to adopt new technologies that directly improve operations. The United States has the highest adoption of operations-focused technology, with 61% adoption of digital agronomy, 51% adoption of precision agriculture hardware, and 38% adoption of remote-sensing technologies.

  7. Farmers around the world cite input distributors as a key influence for recommendations on soil health. We see the same result for almost all decisions related to agronomy in other survey work.

  8. The majority of growers continue to prefer in-person interactions and use digital as a complementary channel for specific steps of the purchasing journey.


2. Simplify to Succeed: Why Removal Can Lead to Greater Gains in Agribusiness - Upstream Ag Professional

Key Takeaways
  • Rather than adding more products, services, or tools to solve problems, agribusinesses streamlining offerings and removing low-margin or unnecessary services can lead to clearer focus, better resource allocation, and improved long-term profitability.


I recently read an article from the Collaborative Fund titled Take Something Away. It struck a chord with me, especially in the context of agribusiness strategy.

More, More, More

We often default to the idea that solving a problem means adding more—more resources, more strategies, more tools.

But sometimes, less is more.

In fact, subtracting leads to more focus, and often, better results.

Take the story of Ryan McFarland and the Strider Bike, which was highlighted in the article.

Instead of adding training wheels to help his child ride a bike, McFarland took away the pedals, forcing his child to focus on balance. By simplifying the design, he created a more effective learning tool.

This same principle applies to numerous aspects of life—whether it’s healthcare, personal finance, or business strategy.

In agribusiness, we tend to overcomplicate things in the pursuit of growth or efficiency, but over complication can lead to inefficiency, confusion, and wasted resources.

How Does This Apply to Agribusiness?

I frequently hear from ag retailers, distributors, and agronomists who feel overwhelmed by the increasing complexity of the industry. The introduction of new products, technologies, and initiatives often leads to the question, “How can we sell precision ag services, learn new software and adopt new technologies when we’re already stretched thin selling herbicide, fungicide, bulk fertilizer, and more?”

While artificial intelligence and LLMs might be a small component of the answer, the reality is that those concerns are valid.

Not every business can do everything, and trying to will stretch resources even further. Some may need to hire more staff or develop new skill sets, but for many, simplifying their strategy is a more realistic solution.

For the full article, including examples from Corteva and ag retail, check out the full article.


3. Acadian Plant Health™ and BASF Agricultural Solutions Partner to Innovate Climate-Resilient Solutions for Sustainable Agriculture - Acadian Plant Health

Key Takeaways

  • The partnership is focused mainly on distributing newly developed, unique abiotic stress management products for seed treatment, soil and foliar applications which suggests an aim for novel products to come to market in the future. The partnership is global in nature with BASF expanding distribution to countries beyond Europe.

  • Can companies simply partnering with external suppliers still be considered innovation companies, or do they become something else?


Acadian Plant Health™ and BASF Agricultural Solutions, two leaders in biostimulant technologies and global agriculture, have announced they are collaborating to develop innovative agricultural solutions to market climate-resilient products for the protection of crop yield and quality.

BASF will leverage Acadian’s biostimulant technology to complement its chemistry and biological portfolio and increase solutions that will grow more, and sustainably better crops.

Since acquiring Becker Underwood in 2012, BASF has been quiet on the biological front, relatively speaking. Key crop protection competitors have gained technology, talent, revenue and market footprints globally by acquiring companies in the biostimulant and plant nutrition space— for example, Syngenta acquiring Valagro and Corteva acquiring Stoller.

Ironically, a few weeks ago in BASF Agriculture Solutions Capital Markets Day Highlights and Analysis I stated the following about BASF biological initiatives and Acadian:

I assume they acquire and whom they acquire will depend on where they want to prioritize (product wise and market reach wise), but entities such as Verdesian Life Science or Acadian Plant Health may stand out as beachhead acquisitions in the biostimulant space, similar to what Syngenta did with Valagro and Corteva did with Stoller. There is also Rovensa, which has a broader portfolio and more global reach.

The announcement is not for an acquisition. Simply a partnership. But my statement illustrates my view that, without knowing the specific details financial details of the partnership, this is a smart move for both companies.

The partnership is global in nature and BASF is expanding distribiution of Acadian products beyond China and Europe, with many more countries preparing to launch according to Acadian.

The partnership is focused mainly on distributing newly developed, unique abiotic stress management products for seed treatment, soil and foliar applications. which suggests an aim for novel products to come to market in the future. The global seaweed extracts biostimulant market is expected to grow at a CAGR of 13.1%.

Acadian is relatively unknown, but has scale— Acadian sells their biostimulant products in more than 80 countries, in many instances selling to other manufacturers that integrate the Acadian seaweed formulation with other molecules to create augmented products for farmers.

Seaweed Products

Acadian Plant Health focuses on developing biostimulant solutions, predominantly seaweed extracts.

Seaweed is a dominant biostimulant type, but not all seaweed products are equal.

Factors that can contribute to the quality and effectiveness of seaweed products include:

  • Environment — Harvest location, process, environment and harvest month.

  • Seaweed Taxa and Biology — Phenology, Tissue type, Genotype.

  • Manufacturing Process — Extraction method, filtration, holding time, and additives.

Seaweed extraction processes for agricultural biostimulants include Cold Water Extraction, Enzymatic Extraction, Fermentation and Alkaline Extraction.

Acadian uses a proprietary extraction processes to create its biostimulant products. Thier process is an alkaline one which helps increase the level of active biocompounds derived from the seaweed compared to other methods.

Acadian harvests the common Ascophyllum nodosum from North Atlantic shores— an environment that is conducive to having high levels of beneficial bioactive compounds.

According to the release, BASF and Acadian are looking at novel product formulations together.

Innovation Companies or Distribution and Commercialization Companies?

There has been emphasis at crop protection companies surrounding biologicals being around partnerships and in-licensing products and molecules.

Corteva and Syngenta have made major acquisitions recently.

But, Bayer has de-prioritized internal development and worked more on in-licensing and strategic partnerships. Even Syngenta continues to fill gaps in its portfolio with partnerships— like with Azotic Technologies, Intrynsix, Aphea Bio and Bioceres.

If a company does not have the internal capabilities to develop new products and solutions, the company leaves itself relying on someone or something they have less control over— over relying on distribution rather than ability to innovate.

This is what Jeff Bezos calls “Day 2”:

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