Articles

Agriculture and technology make good partners

Does technology have a place in agriculture? The resounding answer is yes. A group of panelists, moderated by Dan Stokes, a director of Chicago Farmers, discussed Agtech at The Chicago Farmers’ February 13, 2017, meeting and offered interesting insights. Panelists included Guy Turner, a partner with Hyde Park Venture Partners; Corbett Kull, senior director engineer and head of the Chicago Office of Climate Corporation; Mark Haraburda, CEO of Barchart; and Matthew Rooda, CEO and president of SwineTech.

How do the panelists define Agtech? Haraburda, whose Barchart company focuses on commodities and futures data, said that Agtech has made it possible to analyze large amounts of data that are cloud-based, and Rooda, of SwineTech, which creates products that reduce piglet deaths, noted, “Time is our most valuable resource and technology gives time back to people.” Kull, of Climate Corporation, which helps people and businesses adapt to climate change, remarked that the technology has to improve productivity for the farmer and/or landowner. Turner, whose Hyde Park Venture Partners focuses on high-growth technology startups in the Midwest, believes that Agtech involves genomics and chemistry.

And who are the innovators of Agtech? “Everyone, including growers, who have been tinkering with new solutions for decades,” said Turner.

In discussing the history of the adoption of technology in agriculture, Kull that it can be traced back 120 years and include mechanization and the use of fertilizers, chemicals and GMOs. “There appears to be a cycle every 20-25 years in agriculture,” he said. “At the front end of innovation, there are a lot of naysayers. There was a time when farmers were suspect of tractors and were reluctant to replace their field horses with these machines. Three or four years ago, I was hearing that farmers don’t use smart phones. That is not the case now.”

Timing is everything, observed Haraburda, and noted that rooster.com came out in 2000. While it was a great idea to bring a digital marketplace to the farmer, the time was off, said Haraburda. “The platform was not there. Now we have that platform, but it is still tough to sell grain online. It won’t happen overnight, but the behavior is changing.”

How does that platform happen? “You have to think ahead,” said Rooda. “You have to find cost-effective ways to get an advantage over your competitors.”

Kull noted that computerization has gotten very cheap. He pointed to the ability to walk up to livestock in the field and check a fit-bit in an animal’s ear and gain a reading with an iPhone. “Affordability and pervasiveness make the technology right for right now.”

Also noted in the discussion:

• The consumer drives the investment in the Agtech industry. Look for what the consumer needs.  The consumer has to lead the way. They won’t buy if they don’t need it. (Rooda)
• The grain market is a huge area of investment opportunity. There are two or three tiers of management structure on a farm, so there is opportunity to create transparency. (Turner)
• While hog prices are low and there is an oversupply of pork, the rise of the middle class in China and its appetite for American cuts of meat could change that situation in the next few years. (Rooda)
• Every commodity industry lives on a supply curve. (Turner)
• A farmer is running a factory and it requires doing a better job of measuring and scaling. (Kull)
• Immigration and tariff issues could affect Agtech’s future; however, if there is a shortage of labor, some start-up would figure out how to pick the fruits and vegetables. “Regulations present great opportunities for startups.” (Kull)
• The demand for restaurants to serve locally grown food affects agriculture and technology. There have been advancements in storage and modifications in growing to give longer life spans to fruits and vegetables.
• Collecting information for the famer is a problem; don’t let information die in the field.
• Regarding tech investments or involvement in startup companies, panelists recommended gathering as much information as possible and consulting with a good legal team regarding structuring a company.
• The bar is high for venture capital; a 20 percent return is sought.
• Expertise in the market, tenacity, and previous experience indicate probability of success for a startup company and make it easier to raise capital.
• In response to a question about protection of intellectual property in overseas deals, Haraburda said that Barchart has grains.com and sells grain to one or more elevators. A Brazilian grain buyer wanted a similar situation in Brazil. Barchart is licensing the technology to the group.
• Regarding the future of land grant colleges in research and development of technology, Haraburda said that the University of Illinois tech campus is extensive and it has talent. People are being hired from this pool of talent.
• Future of Agtech? Kull said that Climate Corporation is making investments in sensors for the field and livestock. Haraburda said he is interested in tools that are simple and affordable.