Happy Thursday and welcome back to the 47th edition of the DIALogue.
The DIALogue gives you the most up-to-date news on food and agriculture. It’s a “weekly watering” of ag news and commentary :).
I’ll be experimenting with the format in the upcoming weeks. So let me know what’s working (and what’s not)!
Table of Contents:
Saving Ketchup: The Race to Breed a Tomato for a Warming World
From bytes to bushels: How gen AI can shape the future of agriculture
Saving Ketchup: The Race to Breed a Tomato for a Warming World
From the Wall Street Journal
Agriculture itself is evolving to climate needs, and we're seeing this in terms of seed breeding, biotech seeds, gene editing in the future. But the point of this is developing drought-resistant types of seeds for corn, soybeans, wheat, tomatoes, bell peppers, and there's billions of dollars on the line. These are massive companies that want to be able to sell a product to the farmer that's going to be drought-resistant and survive effects of climate change as they come along over the next decade.
Breeding for selection has been around since the dawn of civilization to solve humanity’s problems. Famously, Jacob used a selective breeding process to cheat his uncle out of his flock of sheep. But today’s problems are a whole lot more complex than increasing the number of spotted sheep.
As climate change continues to affect our agri-food systems, plant breeders are finding ways to adapt to changing needs. Technologies like drought-resistance corn and soy are becoming increasingly relevant as we see more extreme drought and heat events. As Patrick Thomas points out here, “Last year was extremely brutal in terms of heat and drought across the Midwest. And you know what? The harvest came back okay. We really did not see a big drop off in terms of what farmers were bringing in. And a big reason for that for people in the industry say the genetics have just gotten that much better.”
Unfortunately for our agri-food system, R&D pipelines tend to have a longer tail than technologies like software. Gene editing with CRISPR, however, is promising to shorten this tail. Startups like Inari (which has a West Lafayette location) are using multiplex gene editing to bring higher productivity and lower environmental impact.
Regulatory barriers remain for widespread adoption of the technology, especially in Europe. Farmers are afraid that the technology will displace them, and the public worries about health concerns (despite the scientific consensus saying these worries aren’t substantiated).
I personally don’t want to see $10 ketchup. So I’m always happy to see advancement in these technologies.
From bytes to bushels: How gen AI can shape the future of agriculture
From McKinsey and Company
This article explains how companies in the $4 trillion global food production industry can comprehensively strengthen their AI efforts by leveraging gen AI. Doing so can create economic value in two key areas: first, on the acre by improving on-farm economics such as labor and input costs and yields, and second, for the enterprise through increased sales growth, productivity, and operational efficiencies. Overall, our analysis shows that AI can create $100 billion in the former area and $150 billion in the latter.
What an absolutely amazing title for an article about Gen AI in ag.
As the authors point out here, Generative AI is fundamentally an advanced information management tool, especially helpful for identifying patterns in unstructured data sets. Agriculture is ripe for such a technology as it’s full of unstructured, multimodal datasets.
Just as we’ve seen companies fundamentally change their business models to respond to digital transformation, AI will make a similar (if not greater) impact. R&D, Marketing, Agronomy, Operations, and more will be impacted by such a technological shift. Agri-food companies that utilize AI, like Unilever recently, will be best positioned into the future.
158. Beware of the “platform”
From Rhishi Pethe
The best approach is to be surgical about who your customer is and position your product to solve meaningful customer problems, be extremely disciplined about your cash burn, prioritize like hell, and stay focused on your core strengths and strategy.
Don’t try to be everything to everyone.
Beware of the platform!
With Gro Intelligence going out of business after raising $123 Million dollars, many are speculating on what happened. Was it the funding environment? A poor product market fit? Too few clients? A lot of thoughts here. And no one better to break it down than Rhishi Pethe.
Rhishi attributes their failure to 3 things: over prioritizing immediate revenue for long term growth, chasing deals instead of a repeatable product, and being everything for everyone. Basically, Gro had some really good technology, but they ended up saying yes to everything, becoming a quasi-service model. Which doesn’t scale very well.
Too many times, startups call themselves “platform” because they really don’t have a product. Platforms can become a “winner-take-all” if they’re successful, but they have to move beyond just a lot of valuable data.
US Close to deal to bankroll Moderna bird flu vaccine trial
From Financial Times (paywalled, here’s a version in Reuters)
Moderna (MRNA) stock seesawed Thursday after confirming the U.S. government is nearing a deal to fund its messenger-RNA-based pandemic bird flu vaccine.
The news comes amid growing concerns about the H5 bird flu, which has shown up on egg farms in 48 states and in dairy cows in nine states. The Centers for Disease Control and Prevention classifies the public health risk as low. However, a third dairy worker tested positive Thursday for the virus. All three have occurred since April 1. Two of the patients were in Michigan.
The avian flu has been a danger to dairy farms and egg facilities around the country. To humans too- just recently, a third worker in Michigan was confirmed for the disease. It’s not too much of a health risk, yet. The CDC puts the disease as a low human health risk.
To make sure it doesn’t elevate, the government is funding a new mRNA vaccine against the avian flu. The company has already finished dosing healthy participants in a Phase 1 and 2 study. Pfizer is also looking to get in on the action.
Nutrien Ag Solutions Sees Transformation For Ag Retail
From The Daily Scoop
Clayton says his own career beginning as an agronomist was completely analog. Knowledge sharing was limited to phone calls, however, today, with its network of more than 4,000 agronomists on three continents, the Nutrien Ag Solutions network can leverage its scale in ways impossible even a few years ago.
“We have to have a different agronomist today than we did back then. Our teams are thinking about a holistic cropping cycle: taking in the productivity, the fertilizer and inputs applied along with the data points to predict the future. It’s a night and day difference,” he says.
For any company, one of the most difficult challenges of a disruptive technology is the workforce. Ford and GM struggle to compete with Tesla not only because of the underlying technology, but because their advanced workforce is filled with mechanical engineers specializing in combustion engines. You can’t just “tell them” to create an electrical vehicle, and it’s very difficult to start hiring a bunch of electric engineers (who is going to train them?).
Rob Clayton, SVP of Retail Operations at Nutrien, repeats a similar sentiment. As ag distribution navigates the disruption of digital technology, they have to completely remake their workforce to become digitally native. This means hiring differently, training differently, competing against a different set of employers.
As we’ve seen from GM and Ford, it’s not an easy change to make.
That’s all for this week.
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