Top of Mind: Data Is Value, Not Cost

April 1, 2014 10:05 PM
 
Jeanne Bernick

Big data has become a modern ag commodity. Think about recent investments in technologicalsolutions for translating farm data into actionable information. These ag informatics solutions could forever change the way we think about agriculture, reports Informa Economics, which has conducted numerous studies on the application of technology and data when making decisions in agriculture. Investment in big data gathering technology peaked in 2013 in convergence with farm profitability, notes Informa. Major supply companies such as DuPont Pioneer, Monsanto Company and John Deere, as well as new players such as Granular (see page 32), now cover the market with data solutions.

But big data really is not that new to agriculture. The use of technology and information management systems has had significant value outside of domestic grain and livestock markets for years, notes Tom Dorr, former USDA undersecretary for rural development and president of Thomas C. Dorr & Associates. Think about ethanol, which was and still is the first nonfood and nonanimal value-added product produced off the land. Ethanol was made possible by technology and data. 

"The ethanol industry has revealed how important technology and data can be in driving profits," Dorr says. In fact, big data in ethanol turned the economics of production agriculture upside down. Data use is what allowed ag to identify new production technologies and markets: think oxygenated fuels, enzymes, new dry-milling production systems, blending strategies and RINS. "All of these tools were data driven," Dorr adds. "Without them, we wouldn’t have benefited from the opportunity to serve emerging energy markets." 

Why Turmoil?
So why such angst over how we gather, use and deal with farmer- and vendor-generated data? Dorr believes it is because at the farm level, too many still view the world through the commodity lens.

"We lost the war on ethanol because instead of treating it like a value-added product, we treated ethanol policies and their critics as though we were protecting a traditional ag commodity," Dorr says. "We never made it clear ethanol was the environmentally best new liquid fuel for the money. "

If we continue to assume data is a commodity, it is considered a cost. If we appreciate the significance of downstream value-added opportunities, it is a value. The only way to do this economically is to use technology, farm-based data and develop trustworthy systems to manage them.
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