FTFL-GE: Key Takeaways from Our Executive Agtech Roundtable

We recently attended the World Agri-Tech Innovation Summit in San Francisco. We had our usual multitude of productive meetings, catching up with prospective clients, buyers and investors, but the highlight of the conference for us was a fascinating roundtable dinner discussion we hosted to discuss the role of next-generation agronomy in the farm input business.

We were joined by a selected group of innovative companies in farm inputs and agronomy along with large ag inputs companies and private equity firms with interests in the space. We debated the timing and path of the evolution of the farm inputs business from synthetic chemical fertilizers to a broader mix including biologics, and the role that advanced agronomy can play in the transition. It was a lively discussion, but a general consensus on a number of interesting points emerged.

Biologic inputs are coming of age and becoming a mainstream part of farm inputs, but hurdles to adoption still need to be overcome

• Three major PE transactions in Q4 2024 represent a powerful positive signal – BW Fusion and Bain Capital Double Impact, Meristem and Bridgepoint, and Life Agro and HIG
• There will be further consolidation – there are too many undifferentiated microbial consortia players
• To gain widespread adoption, biologics companies need to be able to accurately predict the cost-effectiveness of their products on any given farm, as they can vary widely depending on soil conditions

Advanced agronomy, including AI to analyze soil databases, will play a key role in agriculture

• Efficient use of farm inputs, including synthetic fertilizers as well as biologics, is dependent on a detailed understanding of soil health and conditions
• Farm inputs companies will use analytical tools to measure the success of their products, creating “prescriptions” for each farm comparing soil conditions to reference databases to optimize results and cost
• This trend is in its early stages, with additional development, data gathering and consolidation to come

Holistic solutions with an eye toward farm economics will win

• This can take multiple forms, such as a broad suite of farm input products and analytical tools to determine how to use them, or integrated solutions and equipment to meet a specific need
• “[Integrated Solution] as a Service” with immediate benefits will prevail over hardware sales that have a longer payback period to the farmer. Saga Robotics, a robotic mildew treatment provider, is a great example of this trend

Nitrogen fixation and phosphorus management are critical focus areas

• The cost savings of more efficient fertilizer use drive adoption of new technologies, with sustainability as a fringe benefit

The current world political climate adds to concern about soft commodity prices and input costs. The emerging next generation of farm inputs and tools including AI, analytics and operational software, extensive data collection, biologics and new sensor modalities have the potential to revolutionize farming. The winners will be those that combine the right elements to solve key problems while keeping a close eye on the economic benefit to the farmer.

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