Cubbage: Agriculture Is Being Left In The Digital Dust

March 27, 2018 08:07 PM
Agriculture is ripe for the picking in terms of benefiting from its digital potential. This is why we're seeing so much venture capital money flow into an industry mired in an economic downturn.

The often-quoted line from the movie Talladega Nights: The Ballad of Ricky Bobby—“If you ain’t first, you’re last!”—is funny, but applied to the next bit of news, it’s not so funny.

Agriculture is the least digitized of all major industries, according to the McKinsey Global Institute’s Digitization Index. That’s right. Agriculture is dead last for living up to its digital potential. It’s never good when you realize you’re even being outflanked by slow-moving sectors such as government and education. In the digital horse race, our industry is being left in the dust. When you’re being beat by a bureaucracy, you know you’ve got serious problems.

Think of it this way. Agriculture today is a lot like Walmart, which derived its efficiency from its sheer size and scale. That’s how the company beat the competition back in the day.

However, digitization has given rise to companies such as Amazon that have put a traditional retail giant such as Walmart back on its heels. Digital disruption also can be seen as companies such as Uber take over the taxi business and Facebook stimulates the demise of the hometown newspaper. The fact is, right now agriculture does not currently have an Amazon. At least it doesn’t yet.

In the world of big data, self-driving tractors and combine yield monitor tech that was introduced more than a quarter century ago, one has to ask how modern agriculture is last in terms of digitization. Even with the amazing advancements in technology that mainstream agriculture has seen during the past two decades, the McKinsey report exposes just how far agriculture is behind compared with other industries.

Although the most advanced sectors, companies and individuals may be pushing the boundaries of technology use, the total U.S. economy is realizing only 18% of its digital potential, according to the report. But that’s good compared with agriculture, which hasn’t even cracked double digits.

So which industries are on top in terms of digitization, and just what are the metrics used to develop such rankings? At the top is the information and communications technology sector, which includes the businesses supplying the devices, software and services that are fueling this whole digital explosion. But at only 5% of U.S. gross domestic product, it is only a sliver of a much broader phenomenon. Media and finance were also near the top, and they were followed by asset-intensive industries such as oil and gas and utilities.

More than 27 different indicators were used in the McKinsey index to capture the many ways that industries and companies are digitizing. Those indicators were divided into three main buckets: digital assets, digital usage and digital workers. In a simplified example, businesses that spend heavily on computers and, more specifically, robots received high scores in this particular study. Also very important was the number of workers that had received training for and could execute certain digital-related tasks on a regular basis.

This disturbing digital state of affairs within agriculture should not be a profound revelation to anyone in agriculture who really looks closely in the mirror. We like to pat ourselves on the back when university and media studies show mass adoption of precision technologies such as yield monitors and grid soil sampling.

But the reality is adoption and utilization are two totally different metrics. If a farmer has auto-steering on his or her combine but does nothing with the yield data, then in reality you’re not going to score many digital points for just being along for the ride.

There are many fingers to point to the root causes of just how agriculture ended up in the rearview mirror. First, one could point out that it’s a generational thing. Agriculture as a whole is manned by one of the oldest workforces of almost any industry, and by nature, change doesn’t come easily or willingly. The other obvious reflection is that agriculture, especially at the production level, is extremely fragmented, and in a digital world, that makes things even harder to connect.

But if there is any silver lining here, then being last means there is only one way to go, and that’s up. In a follow-up report, the same group ranked agriculture near the top of industries that would benefit from digitization and automation moving forward.

Agriculture is ripe for the picking in terms of benefiting from its digital potential. And it is for this very reason that you continue to see so much venture capital money flow into an industry mired in an economic downturn. Change will come, and it will likely happen fast.

This leaves two questions. Who will be the agent to drive this change, and who is agriculture’s Amazon?

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Spell Check

John Kiefner
Manhattan, IL
4/2/2018 08:59 AM

  I recently wrote an article that fits this story about ag-tech. Outstanding In Their Field I recently took a day off work. I hope it will be one of many in the next 10 years as I try to slide gracefully into retirement. The USDA states that the average farmer is 58.3 years old. That means if I want be an above average farmer I have 4.1 years to go. Can I make it that long? Here is some background. A few years ago the price of scrap steal was insanely high. It was a good time to haul many old pieces of machinery to the scrap yard to be melted and reused. First I called my son to see if there was any chance he would be the 4th generation in the family to farm. I was fairly certain what the answer would be but wanted to verify it. His answer was honest and quite frank. My son was several years out of college at the time and climbing the corporate ladder. His reply to the query about whether he considered becoming a farmer was, “Not a chance, and remember, when you and mom die, we are getting dumpsters.” Perhaps I should have called my daughter and asked her instead. My son’s honesty has helped me to decide how to finish out my life as the last farmer in the family. There is no legacy of passing it on to the next generation. No need to build the business or desire to buy the newest technology. For my day off I traveled to Chicago to tour the office of The Climate Corp. This company is on the cutting edge of data collection for weather, yields, fertility, plant health, and equipment functions and, well, about anything you can imagine. The information that is gathered will be analyzed, sometimes instantly, and used by farmers to increase yields while reducing inputs, protect the environment and reduce waste. One would also expect that those who adopt and succeed with these technologies would also be more profitable while lowering the cost of food even more. to be continued

Jon Kiefner
Manhattan, IL
4/2/2018 09:02 AM

  This technology is above my intellect. It was mentioned that the farmer of the future might very well be a computer scientist or agronomist. I had to sign a confidentiality agreement to be allowed to tour the offices and labs. That’s comical, I could barely comprehend the concepts displayed, yet alone steal any technology. Am I a dinosaur about to become extinct? Am I a relic, a holdout of farmers long gone? Retirement is going to come very soon for my equipment and me if these technologies evolve swiftly. That may please the realtors and developers that cannot wait to bulldoze the black dirt I have tried to save from erosion for most of my lifetime and build warehouses or subdivisions on my farm. Can I last long enough to become above average? The tour of the Climate Corp was in the West Loop; about 2 miles from where I met my wife for the train ride home. Ironically, in the middle of Chicago, there was a wheat mill right behind the Climate Corp office. I walked to the train and admired dozens of buildings under construction on Fulton, Lake, Randolph, Washington and Madison Street. Is it possible that any of my recycled steel was in the beams being erected? Upon my retirement or death, my remaining equipment will be reused somehow. The farm’s fate is uncertain. When I die, I hope they bury me and do not put me in that dumpster.

Marilyn Westfall
Vincennes, IN
3/29/2018 07:28 AM

  Doesn't cost also play a factor into the digital age? It is indeed the oldest workforce running and with that, probably the most frugal. With prices of everything on the rise, except for the commodity itself, farmers can ill afford to buy into technology whole heartedly when they can figure their yields in their heads.


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