Next Gen Farming and the Future of Ag
Fast paced technology developments in the future of agriculture have opened doors for more investors to enter the industry. Ever since The Climate Corporation, which collects and analyzes data to help farmers make informed decisions, was acquired by Monsanto, Agtech-focused corporate investing and smaller company acquisitions have greatly increased, leading to industry consolidation and greater capital infusion into the sector.
Technological integration has been key to attracting investors’ attention. There has been an increased focus on Agtech with consideration to three key factors that have been damaging farm profitability and sustainability: weather, immigration, and produce shortages.
Extreme and unpredictable weather has had a direct impact on crop yields, while reduced immigration has increased labor costs. As a result of these two factors, there have been produce shortages which threaten the sustainability of farms. To counteract these unpredictable factors, agtech innovation has been focused on improving three key parts of the farming business model: operating and overhead costs, distribution, and farming efficiency.
To address farming operational and distribution inefficiencies, there has been a recent trend of decentralization and urbanization of traditional farms. For example, Brooklyn-based agriculture startup Gotham Greens is building huge greenhouses in cities such as New York and Chicago. Urban growing brings the supply closer to consumers which solves preservation and distribution issues. The startup recently closed $29 million in Series C financing, for a total of $45m in funding. They use deserted industrial sites to build their climate controlled greenhouses which grow crops hydroponically, without soil. Gotham Greens states that this use of technology allows their greenhouses to produce 30 times as much per acre than traditional farms. Greenhouse farming also prevents the spread of dangerous bacteria such as E. coli and segments areas so that it easy to dispose of impacted crops.
Another example of distributed and decentralized farming networks is the Farmers Business Network, an independent network of thousands of America’s most advanced farmers, which enables farmers to share practices and data. The platform has recently invested in the Nebraska-based AgriSecure, a company that helps farmers transition to effective organic farming, enabling its members to have a priority access to AgriSecure’s network. This serves as an example of a farming management company that leverages a collective of small farms to negotiate better prices for farming equipment from suppliers and offer similar benefit of farming cooperatives.
Another strong Agtech trend addressing operational and distribution inefficiencies has been the wide adoption of drone feets in agriculture. For example, Syngenta, a Swiss based global agribusiness company (recently acquired by Beijing-based ChemChina for $43 billion) provides FarmShots, a technology which uses satellite data to identify sick crops. The satellite takes photos of a farm and uses color to determine areas of healthy and sick crops. Other colors may also indicate the overuse of fertilizer, lack of water, or damage of insects. By deploying drones, FarmShots can now also pinpoint specific treatments and optimize the use of pesticide and fertilizer. Together with farm management software, drones will lead to fully automated farms.
Healthcare discovery is becoming increasingly important in its impact on Agtech through its use of gene editing, microbiome research, and AI. Lab-grown crops may replace farms all together as they require less resources than farms and have a greater production rate
As the industry is going through unprecedented growth, Agtech companies are vertically integrating their products in order to reduce their customer acquisition costs and to ensure that farms are correctly using the data derived for resource allocation.
Finally, the use of smartphones is catching up with Agtech to enable farmers to have easy access to new information and supplies.
Altogether, The Future of Agtech lies in applying innovative farming solutions and implementing outside technologies to streamline, derisk, and automate farming operations.