Follow these industry shifts to keep up with the fast-moving sector
Ag data stands out as one of the most buzzworthy topics of 2016. That’s almost certain to continue this year, says Todd Janzen, an Indiana-based agricultural lawyer who grew up on a Kansas grain and livestock farm.
“I think 2017 will be the year when farmers demand results to part with their ag data,” says Janzen, author of the Janzen Ag Law Blog on AgWeb.com. “The promise that ag data will someday pay dividends will no longer be enough.”
New companies punching into the industry can further influence technology trends, which are monitored by firms such as AgFunder, an online investment marketplace. CEO Rob Leclerc predicts technological sophistication in agriculture will accelerate and generate real return on investment.
“We’re not talking vitamins but painkillers that can solve real farmer pains,” Leclerc says.
Although overall venture capital investment in agtech dropped 30% from 2015 to 2016, he says, investment volume actually moved 10% higher. A record-high 580 deals took place. Year-over-year investment growth occurred in five categories: ag biotechnology; farm management software; sensors and the internet of things; novel farming systems; and supply chain technologies.
Multiple startups in China, India, Japan and Brazil also merit attention. “This represents the beginning of a second wave of agtech,” he says. Leclerc pays close attention to agtech areas that are underserved.
“One area that has been really underrated is robotics and automation,” he notes. “We’re starting to see Silicon Valley take a greater interest in these areas.”
It’s anybody’s guess which technologies will gain traction next. But one thing is certain: Agtech continues to create incredible change in the agriculture industry.
Five Digital Trends to Monitor This Year
1. Livestock data enters the market. Many operations that produce protein, milk and other products collect valuable data. There should be even more opportunities for swine, dairy, beef and poultry farms going forward, Janzen says. “I think 2017 is the year that venture capital starts to notice this.”
2. Data platforms integrate. Industry groups such as AgGateway are trying to break down barriers among companies so farm data can more easily be integrated across platforms, Janzen notes. “These efforts will start to pay off,” he says. “Companies that don’t offer integrations will slowly fade away.”
3. The herd begins to thin. For agtech companies, success is far from guaranteed, Janzen says. Business data points show startups in many industries have a difficult time surviving. “This is the year we’ll start to see ag data company failures as the venture capital runs out for some players,” he predicts.
4. Drones will get pushback. Consider the Gartner Hype Cycle methodology, Janzen says, which suggests that early on, many technologies earn accolades based on inflated market expectations. Pushback follows. Finally, expectations level off as buyers find practical uses for the technology.
5. Better data-use policies ahead. Could this be the year when policies governing the use of ag data begin to better address farmers’ concerns about issues such as privacy, ownership and fair usage? Janzen hopes so. In his view, all of this information should be distilled into a single transparent document.