Monsanto is bridging genetics and big data analytics by helping farmers leverage technology to improve crop yields at lower cost and risk. Its precision farming platform will allow agribusiness to realize Monsanto's analytics field of dreams.
Monsanto is at the heart of a growing new field called precision farming. Farmers face increasing pressure to grow more food on their existing fields at lower cost and with less environmental impact. However, with 25-30 major decisions they have to make each year for each one of their fields, maximizing yields is a challenging proposition.
Precision farming is the big data app in agribusiness that also incorporates cloud and mobile computing. And Monsanto is quickly establishing itself as the leader in the field.
On October 2nd, Monsanto announced plans to acquire Climate Corp. for $ 930 million. Climate Crop.'s analytics technology provides localized weather statistics to help farmers improve productivity. Data is sourced from third parties that track weather patterns on a region-by-region basis. Climate's software collects, manages and analyzes the weather data, looking for patterns. Of note, the company was founded by software engineers and data scientists from various technology companies, including Google.
Monsanto plans to integrate this technology with its FieldScripts software. FieldScripts helps farmers maximize planting by varying the amount of seed they apply to a patch of land. The software marries Monsanto's intelligence about genetically modified hybrids with soil data characteristics provided by farmers themselves. This data is then mashed up with seed and farm data. Models are then built using a predictive component that makes spatial yield forecasts that drive algorithms for planting instruction.
Over a year ago, Monsanto acquired Precision Planting Inc. for $ 250 million. Precision Planting developed software that uses spatial analytics to optimize how far apart and how deep into the soil seeds should be planted.
So now, Monsanto's Integrated Farming Systems platform will be able to tell farmers what crops to plant in each field, precisely where to plant the seeds, when the best time is to plant, and how much herbicide and pesticide to spray. The company claims it can improve yields by 7%, or 5-10 bushels per acre. Its algorithms are accurate to within 10 square meters.
It gets even cooler
Signs of GE's Industrial Internet initiative are evident in farm equipment today. New tractors have onboard tablets and navigational systems to enable farmers to populate fields with seeds or fertilizer optimized for local conditions. And pre-empting the automobile industry's evolution toward self-driving vehicles, these tractors steer themselves based on the data inputs they receive.
With its growing analytics business, Monsanto is transforming itself into a data-driven enterprise while consolidating the market for precision farming technologies. Deeper insights into weather and planting can materially improve crop yields. This intelligence could then be correlated to biotechnology advances to further optimize production. At a briefing with reporters announcing the acquisition, Kerry Preet, the company's executive vice president of global strategy said, 'We believe that data science has tremendous potential to boost productivity ".
Monsanto is at the crux of several major technology trends, including big data analytics, cloud and mobility: it brings together genetic and environment data from different databases, uses predictive analytics to create algorithms that are delivered on-demand via the cloud to mobile devices with data visualization tools onboard self-steering tractors. And some people say farming is boring!
It will remain to be seen, however, whether the productivity and economic benefits derived from precision farming can help shift the company's image of being the Darth Vader of genetically modified crops, such as corn and soybeans. If Monsanto can monetize its early leadership in the field over the next five years, the company's shareholders won't care.