Fewer farmers but bigger operations in US drives stronger need for technology
The Farmers Business Network (FBN), a “data and technology enabled direct-to-farm commerce, community and sustainability platform” is a relatively new entrant in the farmer-to-farmer network space that has “gotten to some scale”. Third Bridge Forum spoke to a former SVP at The Climate Corp to discuss the genesis and future of FBN and technology’s expanding role in US farming.
The Interview started with an overview of how technology adoption has evolved over the past century, with the expert emphasising that this should be considered in terms of the two main markets: row and speciality crops.
The era of digital agriculture has been unfolding since circa 2010, we heard, and relates to farmers optimising how they generate yield as well as farming practices. Describing farmers as an “experimental bunch”, it was noted that given the capital-intensive and low-margin nature of farming, adopting technology can be a high-risk endeavour. In effect, “the adoption curve for different technologies is elongated”.
Delving deeper into the technology landscape, the specialist categorised the segments of companies that exist as: agronomic improvement; operations and logistics; cost accounting or management accounting; and inputs. They then named all the respective key players. In terms of what’s driving technology adoption, it was noted that “farmers that are in a position to consolidate have to be fantastic operators” and are “continuously looking for an edge”.
The Interview then turned to the FBN, set up 6-7 years ago to enable farmers to share data regarding operations and ultimately enhance their performance. The expert explained how FBN has evolved into a “digital ag retailer or a digital co-op”.
It competes with traditional agriculture retailers, who are “responding to the general digitisation we see throughout our society” as well as to the threat posed by FBN’s growth, by providing more data-driven insights, local knowledge and expertise. However, retailers retain a competitive edge in that their physical presence enables customers to go directly into the store and buy what they need instantly, we were told.
On the topic of FBN potentially going public, “the most likely outcome is… either through a traditional IPO or a SPAC, because any of the incumbents buying them, either at the input provider level or at the retailer level, will just be massively disruptive to people’s existing businesses and other business relationships”. According to the specialist, it “makes sense” for FBN to pursue an independent pathway that’s consistent with its positioning and customers.
Other themes discussed in the Interview included the role of traceability of inputs in seeds and genetics, and how technology can address ESG concerns.
To access all the human insights in Third Bridge Forum’s Farmers Business Network – technology adoption in US farming Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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