How the Market Achieves a Technological Big Bang
Surf’s Up
This might sound more like some kind of Zen moment where the
heavens open and we begin to embrace the new and improved methods of producing,
processing and even delivering our food. There are many ag and food supply
chain folks out there who will find that this, in fact, does happen and their
worlds will be shaken to the core. For those who are at the forefront of this
movement you might just get a chance to ride that wave that us old timers have
been waiting on for many, many years.
There’s a New Deal a Comin’
The leaders in the revolution will be the younger generation
of agribusiness professionals who are the trusted advisors of the growers. The
agronomists that succeed will be “techno business management agronomists” who
understand how all of the pieces of the puzzle come together to deliver
solutions – not data or information or suggested courses of action but the best
answers to the questions as to “what do I do right now” balancing science and
economics to perfection.
Transition to Services
Ag retailers, hawkers of chemicals and fertilizers, will
need to change what they do and how they conduct their businesses. The profits
that they generate from the volume sales of materials will be surpassed by
their services business. They must be prepared to give chemicals and nutrients
away at cost in order to convince growers that their own interests are the optimization and profitability of their clients’ businesses. At this point
there will no longer be a conflict of interest in the relationship between
farmer and crop advisor/salesman.
Money! It’s a Gas
When they are no longer order takers for these products and
become the experts in minimizing the use of these inputs while simultaneously maximizing crop outputs the corner will be rounded on the road to success for both
parties. And swept up in this revolution will be the technologists who have
figured out that the way to a grower’s pocketbook is through his advisor.
Aligning the Stars, Planets, Moon and Earth
There is no one company out there who has EVERYTHING UNDER
THE SUN in the way of the “total solution”. No one is even close. Well, maybe Trimble
has a start towards the lofty goal of assembling the building blocks on the ag
side of the equation. But who is thinking about the other major component of
the optimized chain? Food processor and packer. If they are out there then they
are keeping a low profile.
Next: Vertically integrated food and ag companies vs value chains.
