As the snow flies across the upper Midwest, the forecast for 2020 is starting to become clearer. Agtech is making it easier than ever to collect and share data, and this is great news for farmers, landowners and investors. More robust data collection and improved data transparency can help ensure that American farmland is being maintained with care, as farmers work to sustain healthy soils and deliver strong yields, year after year.
From major equipment manufacturers’ forays into robotics to the emergence of new startups looking to improve farmer awareness of field activity, here’s what to watch for in the year ahead.
1: Farming as a Service will continue to grow
Farming as a Service (FaaS) is the term commonly used to refer to subscription and pay-per-use farming services. While this may sound like software engineer jargon, it really just refers to custom farming. If you’re a landowner and you need someone to perform specific services for you and manage the equipment, you’re engaging in the FaaS ecosystem. And that’s not a bad thing.
Given the degree of uncertainty around marketing and commodity rates, FaaS has been a boon to farmers and farmland owners who are looking to establish fixed costs and goals upfront. One of my favorite local FaaS companies is a startup called Sabanto that uses autonomous tractors to perform planting and other row crop operations.
2: The rise of data transparency and analytics
The global agricultural robots market was recently valued at $4.1 billion. Major equipment manufacturers like John Deere keep rolling out new models and new machines, like its new crop-spraying drone. There’s also new software that’s changing the data game by bringing AI into the fields to improve monitoring and data collection.
But the rise of data transparency and analytics in farming goes beyond improved equipment capabilities. While agricultural tools get smarter and data delivery gets easier, it’s increasingly common for farmland owners and tenants to sign leases that require data delivery and provide deadlines for that information.
3: AgTech investment opportunities are multiplying
The landscape for farmland investors is changing alongside the rest of the modernizing agricultural industry. Startups like FarmTogether aim to help more investors get the benefits of having farmland in their investment portfolios, and they’re working to make sure more people understand the variety of ways this can be structured.
As the continued interest in agtech companies provides traditional investment opportunities, the new equity-based arrangements will continue to change the farmland investment game.
4: Landowner empowerment is on the rise
Data is power, and its rise is fueling landowner empowerment in agriculture. Having the input receipts in hand from the past five years running is invaluable, and farmland owners are beginning to understand just how valuable it can be to have a complete view of their farmland health, especially when it comes to soil health.
With increased technology and online tools, remote landowners—those do not live near their land—are getting their first glimpse of what’s going on by numbers. Transparent data sharing can help landowners and farmers align their goals, and it can help farmland owners get a more robust understanding of what’s often a landowner’s greatest asset.
Knowing your soil will need inputs next season (or a multi-year nutrient application) has a real financial impact for landowners: if a landowner knows they’ll be investing in these types of improvements in advance of signing their next cash lease, they’ll be able to set a fair price and outline who will pay for these improvements. Data delivery and literacy will have a huge impact on the bottom line for savvy farmland owners in 2020.
5: The popularity of digital leasing grows
There’s no reason today that anyone should still rent their farmland off of a handshake agreement. In the age of online accountability, new farmland rental and sales platforms help farmland owners and farmers manage their leases, records, and references digitally.
While it may seem daunting to change standard practices in an industry that’s as old as our species, the dial is moving away from verbal agreements. The new standard is that every farmland rental agreement should include requirements around tillage, data delivery, and insurance, among other things, and digital leases make exchanging this information easier than ever before.
For farmland owners who live remotely, digital leases are an easy way to secure a rental agreement and establish a higher standard communication that can improve their relationships with their farmland tenants.
Digital agtech drives the agricultural industry forward
While farming is a very traditional space, it’s not immune to the power of technological advances. In 2020, farmland owners and farm farmers will have to find new ways to build trust and credibility within their communities to stay competitive.
To accomplish this, both groups will need to have the right tools on hand and the ability to market themselves by building an online presence to grow their reputations. The agtech industry is rising to meet these challenges in the year ahead.
Corbett Kull, co-founder and CEO of Tillable