Editor’s Note: Jeff Caldwell is an agricultural content marketing manager for Lessing-Flynn Advertising in Des Moines, Iowa. Raised on a farm and ranch in western Kansas, the veteran of agriculture media and marketing has over 20 years of experience connecting with farmers and members of the agribusiness community in the US and around the world, with an emphasis on the ag technology sector in the last decade. You can reach him at [email protected].
When John Deere released its first steel moldboard plow in 1837, it revolutionized crop production and was very much high technology for its era. But it also created the necessity of change for farmers, and that was difficult for some. Now, agriculture technology startups and established companies face the same challenge in an already tight marketplace for farmers and ag professionals.
The agtech sector has exploded in the last decade, as just about everybody with ties to an ag company — be it an early-stage startup or century-old established corporation — knows well. As it’s evolved, so too has a sort of pecking order of companies based on venture funding, market readiness, and commercial sales. That pecking order underscores a set of dynamics between companies and their customers, and often determines those who talk the talk and those who walk the walk.
I’ve had the unique opportunity and privilege throughout my career to talk to people around the agriculture industry, from farmworkers to company CEOs. At the most basic level, everybody’s after the same thing: Strong agriculture that meets the demands placed upon it and the sustenance and success of the men and women who make it their livelihood. But there’s a divergence between the farmers who want to raise bountiful food, fuel, and fiber and realize financial success, while machinery, input and service companies want to make money providing the tools those farmers need. I’ve often joked that “everybody in agriculture is selling something to somebody.” My own family has been involved in agriculture since my great-grandfather emigrated to the dusty plains of Kansas over a century ago. It’s a business and a way of life, and I’ve seldom met people with more pride in what they do, whether they raise a wheat crop and beef cattle or weld the components together on a new combine to help harvest that wheat.
Against that backdrop, agtech started to develop as women and men with new skillsets started connecting new tools, goods, and services to agriculture, introducing an entirely new dynamic to agriculture. Over the last decade, I’ve met with many agtech entrepreneurs. For an old farm boy, it’s been a blast; there are so many exciting possibilities to further revolutionize how farmers and ranchers work, and increasing amounts of venture capital to back them.
Some of it flourishes; the digitization and automation of crop field operations, for example, has been revolutionary for corn, wheat and soybean farmers. But for every successful, meaningful innovation, there are scores of others that miss the mark — by an inch or a mile — and sometimes millions of dollars of initial investment are lost because of a disconnect between technology and agricultural minds.
There’s a problem, though. In a business that’s seen hundreds of new entries just in the last couple of years, it’s becoming increasingly difficult to distinguish between the two. The fact of the matter is the best idea on paper may mean nothing to its potential users without a strong connection between function and outcome. But then again, this is not a new dynamic in business. The road to business success in just about every sector of the economy is lined with the blueprints and prototypes of failures.
What does create a unique challenge in today’s agriculture technology sector is also not new. Right now, crop and livestock markets are tight. Many farmers are finding it difficult to generate a profit from what they produce based on market prices that are below the breakeven point. But you have to spend money to make money, and farmers know this as well as anyone on earth. A corn farmer in Iowa, for example, can’t produce a bountiful yield without leveraging the right combination of seed, chemical, fertilizer, and machinery.
And right now, that corn farmer is hurting. With razor-thin profit margins, it’s tough enough to justify purchasing the conventional necessary crop inputs, let alone a new technology that may or may not have been proven at the farm level. Because of that — and the dominance of traditionally fiscal conservative business practices — there’s a lot of reluctance around purchasing new ag technology at the farm gate. When corn market prices were twice what they are today just a few years ago, spending was much stronger. But now, budgets are tight, and it translates to a lot of difficulty for agriculture technology companies to achieve sustainable commercial success.
To that end, here are a few things to consider in better connecting an agtech company — be it an early-stage startup or a subsidiary of a large machinery company — to its potential customers:
Agriculture’s facing a challenging time, but there’s also a lot of opportunity for technology companies to not only help farmers and ag professionals survive the current downturn in the ag economic cycle but also emerge having evolved to be more productive, efficient or successful. It’s our job in the agriculture technology sector to be attentive to their needs and provide the solutions they need. Doing so will not only better serve a growing customer base, but could also create generations-long loyalty. If it worked for John Deere when the first moldboard plow entered the marketplace, it can work for today’s agtech companies.