Capturing the data edge

MAKING use of all the data farmers collect is fast becoming the focus of ag service providers.

This growth area has attracted plenty of start-ups providing useful technology or support services along the production chain.

However, retailer and ag services provider Delta Ag has partnered with the fast growing FarmersEdge from Canada to bundle together agronomy, retail and precision ag into one package.

FarmersEdge, which specialises in the interpretation of the data to generate efficiencies on farm, is one of these start-ups.

It kicked off in Wade Barnes’ basement in Winnipeg, Canada, with colleague Curtis MacKinnon. Mr Barnes is now the chief executive officer and Mr MacKinnon the company’s vice president of technology support.

The two of them had worked for a Canadian farm inputs retailer providing agronomic support to farmers and as part of this had started a precision ag division focusing on variable rate application.

The precision ag division worked with some of the company’s best fertiliser customers, but was selling less product to them on the new prescription basis compared to filling more typical orders based on broad brush soil testing. Further, the agronomy service came at a fee rather than as part of the retail service.

“At that time in Canada the concept of a fee for service was just not really out there,” Mr Barnes said.

“They decided they wanted us to wind this business concept down, so we (Mr Barnes and Mr MacKinnon, who worked at the same company) decided to venture out on our own,” he said.

They started with a clientele of about a dozen growers with a total of 20,000 acres (8094 hectares) in the Winnipeg area with “no real ambitions or aspirations to grow the business much larger than to essentially make a living”, Mr Barnes said. However, word of mouth kicked in.

“So we went from 20,000 acres, and today we touch millions of acres in five key markets, including Canada, the US, Latin America, Australia and Eastern Europe.”

In the beginning they were mainly an agronomy company which used other companies such as Trimble or John Deere to provide the technology.

The money they made was rolled into developing their own platform and they used this for their pitch to raise capital to expand. This was before the tech company start-up trend took off.

“The business got started in 2005 and we went out and raised our first capital in about 2012,” Mr Barnes said of the $4 million-odd which came mainly from FarmersEdge employees.

“As we grew, every person that came to work for us took an equity stake in business,” he said.

Today, however, they have four key investors, including Avro Capital, Kleiner Perkins Caufield Byers, Matsui Corporation and chairman of Thomson Reuters, David Thomson. FarmersEdge employees, which include agronomists and software and hardware engineers, still make up about 50 per cent of the shareholder base.

The company this year is targeting about $20 million in revenue. It has offices in Winnipeg in Canada, Minneapolis, US, plus regional offices throughout western Canada, as well as in the US, Brazil, Russia and soon in Australia.

“We believe in these five big grain growing areas if you can get around issues such as price point and provide a product that works, you’re going to see farmers adapt to it quickly,” he said.

Mr Barnes said Australia was further ahead of North America with sub-metre global positioning and controlled traffic, but North America was further ahead with variable rate application and data strategies.

“I think that’s seeping in from from things that are going on in Silicon Valley (California) and some of the things that Monsanto has done,” he said.

He said using data has previously been complicated, but this offered a turn-key type service.

“When we first went out to raise money, we went to venture capital firms and we said we did all three things (agronomy, software and hardware provision). They said ‘you’re crazy, that’s not a business. You have to be good at one’.”

Mr Barnes, who was born and raised on a mixed farm in western Canada and also owns his own farm, said farmers needed the whole package and he expected companies with these services to become more common.

FarmersEdge’s focus is corn, soybeans, wheat and canola, but it is also venturing into cotton, sugarcane and potatoes.

“Large scale markets are what we know and those are the markets we want to stick to,” he said.

“There’s a lot of hype around North America, but when you get down to the nitty gritty of it, there’s still not a lot of acres being done.”

He said in Canada and the northern US, FarmersEdge was “touching” only about 1.2m hectares. They want to hit 1.6m hectares this spring.