Monsanto to Expand Computerized Farming Effort
August 17 2016 - 1:30AM
Dow Jones News
By Jacob Bunge
Monsanto Co. is broadening its bet on computerized farming
services, hoping to attract farmers looking for an edge in boosting
crops and managing their land amid a slumping agricultural
economy.
The biotech seed giant said it plans to expand its Climate Corp.
subsidiary, which delivers weather and planting advice based on
computer models, to develop an online network similar to Amazon.com
Inc. Monsanto aims to build an online bazaar allowing farmers to
shop for services and share data with Monsanto and other
companies.
The decision comes despite Monsanto's limited returns from its
digital farming services so far. Monsanto built the division
through more than $1 billion in acquisitions over the past four
years, saying it could transform agriculture by using Silicon
Valley-style data-crunching techniques to formulate advice that can
boost farmers' productivity and shave unnecessary costs.
DuPont Co., Cargill Inc. and Deere & Co., are also investing
in the business, along with a host of startups.
But U.S. farmers have clamped down on spending after a string of
bumper crops have slashed prices for corn, soybeans and wheat. And
some farmers have been wary of sharing their intimate business
details with some of the sector's biggest players.
Monsanto so far has focused on recruiting as many farmers as
possible to the Climate platform. Farmers representing about 92
million acres of U.S. farmland -- nearly as many acres as were
planted with corn this year in the U.S. -- have signed on. About 14
million of those acres are enrolled in paid services, according to
Mike Stern, who earlier this year took over as chief executive of
the Climate division. Mr. Stern said 25 million paid acres are
estimated in 2017.
Monsanto aims to parlay its base of users into a broader
platform for computer-powered farming, a move Mr. Stern said
resembles Amazon.com's evolution from an online bookstore to
selling clothing and groceries while building out a separate web
services division. He said the move will make Monsanto's digital
agriculture offering more central to farmers' operations, while
opening up an established base of users and technology
infrastructure to other farm supply companies developing their own
data-powered services.
"Digital agriculture is very fragmented right now," Mr. Stern
said. "The next step is to go ahead and provide a mechanism by
which you can help organize this ecosystem."
The first company to sign on to Monsanto's effort is Veris
Technologies Inc., a Kansas-based company specializing in sensors
that measure soil content variations across fields. Farmers using
Veris's soil sensors will be able to funnel that data to Monsanto's
Climate system to better plan fertilizer and seed use, the
companies say.
"We're anticipating this will be a wind at our back," said Eric
Lund, president of Veris, which has been developing its mobile
soil-testing equipment since the mid-1990s.
Monsanto is betting that more companies will follow, attracted
by the prospect of tapping into the established Climate user base
and its technology, avoiding the need to develop their own systems
for creating farmer accounts, securely transmitting data, and
payments.
Mr. Stern said that Monsanto hasn't yet determined how much it
may charge companies for connecting their services to the Climate
platform. Monsanto continues to project hundreds of millions of
dollars in sales from its Climate suite of services by the end of
the decade, he said.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
August 17, 2016 01:15 ET (05:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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