Category Archives: Uncategorized

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Unleashing Generative AI for Ag Innovation

The agricultural sector is on the cusp of a technological revolution driven by generative AI. This cutting-edge technology will soon transform virtually every aspect of agricultural operations. Realizing this potential requires a well-crafted strategy, aligning your organization’s unique goals, challenges, and data assets. The Context Network’s new guide, “Unleashing Generative AI for Ag Innovation,” provides a roadmap to do exactly that.

Whether you’re an ag-tech provider, input manufacturer, equipment company, or channel player, Context can help you successfully navigate the new generative AI landscape.  Together we can design and implement a generative AI strategy to maximize your company’s potential.

Click to download your
free copy today.

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PRESS RELEASE: Preston Fay Brings Data Analytics Leadership to The Context Network

WEST DES MOINES, IOWA (March 21, 2024): Agribusiness consulting firm The Context Network (Context) is growing its data analytics practice, with Preston Fay joining the leadership team as a principal consultant.

As the former global head of data science for TELUS Agriculture & Consumer Goods and as the founder of two data-driven entities dedicated to agriculture and animal health insights, Fay brings an extensive background in leveraging data to address business challenges and seize market opportunities. With a background that bridges both marketing and data science, Fay is recognized in the industry for his ability to meld scientific, creative and practical sensibilities.

Context Partner James Mann expresses, “With Preston on our leadership team, Context is uniquely poised to help clients throughout the food and agriculture value chain fully harness their data to uncover business insights and market opportunities. Preston not only comprehends the technological intricacies—he understands agriculture and the priorities of our clients.”

Fay’s wealth of experience in implementing data-driven solutions spans diverse sectors, including ag input, ag tech, animal health and distribution. Over the course of his career, he has demonstrated forward-thinking leadership in data operations and data science. He founded Technekes, a data-centric B2B marketing firm that later merged with XSInc to establish TKXS, subsequently acquired by TELUS. Earlier in his career, Fay led European operations for US-based AgData.

Having first worked with Context as an industry expert in 2022, Fay says he immediately sensed a kinship with the firm’s approach and methodologies. “I’m passionate about making an impact—and so is everyone else at Context. There’s an attitude, enthusiasm and rigor that resonates with me,” he says. “Collectively, we bring breadth and experience that can truly help our clients overcome data quality and alignment issues that may hinder their performance.”

He will lead initiatives that help Context’s clients deploy artificial intelligence, machine learning and other analytic methods to their commercial, operational and customer data to facilitate the execution of initiatives including market sizing / opportunity prioritization, demand creation and planning, customer segmentation, retention, sales alignment and enablement, and performance and ROI analyses.

Mann notes Context’s commitment to continued growth in the data analytics domain. “As we expand our data analytics practice, we anticipate bringing on more talent and resources to help propel us forward. Preston’s leadership will be pivotal in anchoring this growth.”

With the addition of Fay, Context’s slate of leaders includes three principal consultants working alongside the firm’s twelve partners. As a leader in agricultural consulting, The Context Network helps clients address challenges and create opportunities across the global ag value chain.

AG Development, AG Innovation, AG Inputs, AG Investment, AG Outputs Distribution, AG Production, AG Sustainability, Asia/Pacific, EEMEA, Food Distribution/Retail, Food Processing/Manufacturing, Insights, Latin America, Management Consulting, Market Sectors, North America, Region, Services, Strategy Consulting, Uncategorized, Uncategorized

Beyond Carbon: Taking a Systems Approach to Sustainability

CONVERSATIONS IN CONTEXT

As agriculture and food industries strive to address climate change by reducing greenhouse gas emissions, organizations across food, fuel, and fiber supply chains are increasingly focused on carbon reductions as a key metric of success. Net-zero commitments supported by carbon-smart agriculture initiatives are gaining momentum in hopes of unlocking new value for farmers and corporations alike.

 

This collective energy galvanized around sustainability also creates a huge opportunity for agricultural players to now look beyond carbon by establishing goals that encompass a broader range of factors, including water, soil health, biodiversity, animal health and welfare, forest management, food security, human rights, and more.

 

Recently The Context Network Partners Matt Sutton-Vermeulen, Amanda Bushell, and Jason Nickerson met to discuss what it looks like when organizations widen the lens on sustainability by taking a systems approach. This article captures highlights of their conversation.

Sutton-Vermeulen: One of the reasons for the current focus on carbon is that it’s a quantifiable way to measure progress toward reducing emissions—and that’s vital for tackling the climate challenge. But as stewards of responsible supply chains, we can’t be so focused on carbon that we lose sight of the larger sustainability picture. That’s why a holistic systems approach can be powerful for organizations. It allows them to make decisions about carbon not just in the context of broader environmental, social, and economic impacts but also in accordance with how those decisions touch the lives and livelihoods of the people in those systems.

Bushell: Well, going back to the question of why everyone is focused on carbon, I’d argue that a big reason is because it’s a global issue with global  implications. Other impacts like water, soil health, biodiversity, or labor can be managed on a smaller scale—at the watershed or even farm level.  But you’re absolutely right that net zero doesn’t have to be a zero-sum game. Focusing on practices that are good for carbon can also be good for interrelated factors. For example, a recent report1 about crop insurance claims is eye-opening. In 2019, wet weather in the Midwest prevented planting on millions of acres and resulted in significant insurance claims. But researchers found that conservation practices like cover crops and no-till/reduced-till were linked to a 24% reduction in prevented-planting losses. This speaks to the fact that multiple factors—from carbon to water to soil health—are interrelated and have quantifiable impact on business, people, and the entire food system.

Sutton-Vermeulen:  That’s a great example because it shows a systems approach doesn’t necessarily mean adding more goals or overwhelming organizations that already feel the pressure of sustainability targets and commitments.  It’s about progress over perfection and understanding how progress in one area impacts other areas.

Nickerson: And how do you show progress? You’ve got to have quality data. It’s foundational for establishing credible baselines and measuring progress. Organizations need to have confidence in their data and operational systems that help them identify where they can have the biggest impact and how to do it most efficiently. Data also empowers people within an organization. If you’re asking someone to play a role in reducing your impacts, they need to understand—and, be part of—how the baseline was calculated and how progress is being measured, reported, and verified.

Bushell: I think the other piece of this is that some data and some interventions can and should be a competitive advantage for companies. But other interventions aimed at sustainability will require a collaborative, pre-competitive effort across supply chains, government, and NGOs. When we get to these nexus points, we’ll know because it will be impossible to answer certain questions on a company basis. They’ll need to be answered and addressed as an industry.

Sutton-Vermeulen: Right—and that’s where companies will need to bridge primary data from their own system with secondary data to fully understand how to engage with the larger community in the most impactful way possible. This is challenging many organizations as they shift from a project focus to a systems approach because significant gaps in the data require them to view progress over perfection. 

Bushell: That’s a key point, Matt. It’s not a theoretical exercise. It’s about real people on the ground using regenerative practices and seeing outcomes that enable them to support their families.

Sutton-Vermeulen: And we’re just scratching the surface. In North America, around two percent of farmers have experience in carbon programs. That’s how nascent this still is and how narrowly focused it’s been on one area of sustainability.

Nickerson: When we open up transparent discussions about the bottom line of multiple impacts—from economic to environmental to social—more people are involved, and there can be more value shared across the value chain. And while impacts around topics like water efficiency, biodiversity, and human rights may be hard to measure and attribute precisely, that shouldn’t stop food and ag companies—who are working from a sense of responsibility—from trying to improve them.

Bushell: Yes, transparency is important, and the market needs to be consistent too. For instance, the official federal estimate for the social cost of carbon is $51 a ton, and there’s talk of raising that to $190 a ton. When signals shift too drastically, it takes some time for the market to mature and respond to it.

Sutton-Vermeulen: I agree that part of the issue right now is that the market signals are weak. We don’t yet have a mature market where price discovery takes place and where downstream players can signal, for example, that they’re interested in carbon but also interested in biodiversity and water—and upstream players can respond. But that’s changing fast as government and investor organizations drive for higher accountability around multiple aspects of sustainability. The industry’s focus on carbon targets and commitments is absolutely part of this evolution toward a mature market. As we get there, we need a systems approach that keep our eyes on other impacts to people, economics, and other critical indicators. That’s what it takes to build confidence and pride in supply chains that are responsible and truly sustainable.

How do you weigh the benefits, costs, and responsibilities of pursuing ambitious sustainability targets on topics beyond carbon, such as water, biodiversity, and human rights? 

 

 

The Context Network Partners Matt Sutton-Vermeulen, Amanda Bushell, and Jason Nickerson bring decades of experience in driving continuous improvement in responsible food, fuel, and fiber supply chains, adding financial, environmental, and social value.  They help clients advance agriculture through a well-honed systems approach rooted in experience, tapping the breadth of Context’s dynamic network to consistently deliver actionable solutions tailored to each organization, its culture, its priorities and intended outcomes. To learn more, reach out to Matt, Amanda, or Jason.

1 Conservation and Crop Insurance Research Pilot – AGree: Transforming Food and Ag Policy

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Speeding the adoption curve through risk sharing

As complexity increases, driving outcomes—not products—may improve adoption.

This is the second article in a series exploring business model innovation through risk mitigation across the agriculture value chain. In the December 2022 article, Christian Guffy, a partner with The Context Network, discussed the historic compartmentalization of risk and the potential for risk sharing in commoditized product categories. This month, Guffy shares his perspective on risk sharing in a very different kind of market environment—one in which the pace of product innovation is accelerating.

The extent of innovation in the agriculture industry today is exciting. Advancements in biologicals, satellite imagery, variable rate technologies, and other equipment types are making agriculture production more precise than ever before.

From a grower’s perspective, however, more precision also means more complexity—and therefore more interdependent risks. Growers may appreciate the potential benefits of an innovative new product or technology, and yet opt to sit on the sidelines until its outcomes are proven and resilient. Even if a product shows demonstrable benefits, growers may hesitate to disrupt the rest of their production “recipe” by adding a new “ingredient.” This wait-and-evaluate approach isn’t new; it has long slowed the uptake of new products and technologies, and the ag industry is no less immune to this reality today.

It’s important to understand that while most companies and providers that growers work with are narrowly focused on select component(s) of a broader system, growers see everything through a wide-angle, systems-based lens. Growers consider a wide range of factors that go into a successful crop, such as soil conditions, weather cycles, equipment use and chemicals applications. A new product isn’t evaluated in isolation; it is evaluated as to whether it will help solve a production challenge or improve production outcomes. Take, for example, a grower who is considering whether to make a significant capital expenditure on a new precision sprayer. The complexity of new technology is amplified by the myriad of other products and practices used in the grower’s system. In short, the question on the grower’s mind is actually quite simple: will it get rid of my weeds? Growers don’t need another tool, necessarily. They need to know if the tool solves a problem—without creating other problems.

 

Driving novel product adoption through value chain integration  

In a production environment with increasing variability and complexity, upstream agriculture companies can speed adoption of innovative products by delivering not just a product but a cohesive system approach that seeks to mitigate growers’ risk. This approach focuses less on the product itself and more on the outcome that growers will achieve through its adoption. Going back to the example of a new precision sprayer, for instance, a company may offer a solution that guarantees a weed-free field when growers use the sprayer in conjunction with a set of compatible products and/or services. The integration of multiple components addresses growers’ need: no weeds. And by offsetting some of the risk of early adoption with growers, companies establish themselves as being equally invested in production outcomes as the growers themselves.

Sharing in the risk of new innovations may provide a much-needed boost to the historically lagging adoption curve in production agriculture. As the pace of innovation continues to accelerate, the ability to earn growers’ loyalty and be a more integral production partner may prove critical. Beyond the tipping point of adoption, however, the jury is out on growers’ desire to share risk into perpetuity. Growers—as business owners in a capital-intensive and cyclical industry—are inherent risk takers. Therefore, risk sharing may only prove to be an entry point for technology adoption, with growers shifting to a more arms-length transactional relationship once technologies are proven.

It’s important to acknowledge that this kind of risk sharing may not be right for every company. You can’t reasonably take on outcome risk unless you own some degree of control over the many complex variables in growers’ production systems. Therefore, it would be difficult for product-driven companies alone to execute. A la, partnerships across the value chain.

Properly managing on-farm risk will take collaboration between different entities who can contribute to various facets of the outcome, from seeds to services to equipment. The level of cohesion required to align multiple companies and providers to a singular goal is inherently difficult, but we are starting to see the fruits of this integration effort across production agriculture. Processors, OEMs, ag retailers, technology providers, oil companies, seed providers, crop protection innovators, fertilizer producers, etc. have all made notable partnership announcements in recent months, signaling a recognition that system and value chain integration is needed to fully enable on-farm impact. Hopefully this will yield meaningful and faster adoption of products and practices that drive better food and agriculture outcomes.

I encourage you to consider how a risk-sharing strategy (or not pursuing one) that focuses on a systems approach might align with your organization’s business goals and how it would impact your business relationships.

Ask yourself if these enabling factors are in place:
  • Do we have existing relationships with growers?
  • Do we have access to the products?
  • Who else should be part of this collaboration?
  • Do we have growers’ trust and confidence to access their data?
  • What is the quality of historical data to validate production practices?
  • What is the quality of data to accurately attribute crop outcomes?

Our team at The Context Network understands a range of risk-sharing approaches to help incentivize product adoption in high-innovation categories. Through our business know-how and broad network of specialized experts, we can help you evaluate opportunities and craft appropriate strategies. To discuss what these new models could look like for your business, please reach out to me at christian.guffy@contextnet.com.

Christian Guffy, Partner, brings experience in consulting, strategy development, and financial analysis in a variety of industries including agribusiness, investment finance, and retail. He has helped clients develop long term strategic plans as well as annual go to market strategies rooted in fundamental market analysis and research. He has also advised companies on corporate financial planning including capital expenditures, business unit divestitures, and strategic acquisitions. As a result of these client engagements and his prior experiences, Christian is well suited to engage clients in pursuit of their overarching business objectives.

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PRESS RELEASE: The Context Network Announces Four New Partners

WEST DES MOINES, IOWA (March 6, 2023): The Context Network (Context), an agribusiness consulting firm, is pleased to announce the expansion of its leadership team with the promotion of Amanda Bushell, Kellie Gypin, Jason Nickerson, and Kris Pauna to partner.

“As we continue to grow our next generation of leaders, we’re excited to welcome these four exceptional individuals,” said James Mann, Context Partner. “Each of them has already infused new ways of thinking into our firm and invigorated the ways we solve client challenges.”

In their leadership roles, Bushell and Nickerson will drive Context’s initiatives in global agricultural development and help advance sustainability and social impact work, building on the firm’s expertise in these arenas. Bushell has a track record of delivering commercial solutions, top-tier technologies, and supply-chain access in ag development and sustainability, while Nickerson is skilled at leading cross-functional teams in navigating complex business challenges and achieving alignment in the face of high ambiguity.

Gypin and Pauna will continue to advance Context’s impact with private sector clients. Gypin brings depth and rigor in data management, product pipeline management, process development, and product/solution evaluation, while Pauna draws on his background in crop inputs and the biologicals market to help clients solve strategy development, marketing, finance, and operations challenges.

The new partners reflect Context’s breadth of expertise and proven leadership:

  • Amanda Bushell is passionate about solutions that deliver financial, environmental, and social returns. She joined Context in 2018 as a consultant and has served as a project manager for engagements that span across strategy, sustainability, new product development, operations, organizational structure, due diligence, and other practice areas in both developed and emerging markets. Bushell brings expertise on market-based solutions, including carbon and water markets, that deliver impact at scale.
  • Kellie Gypin, who most recently served as a principal at Context, is known for her ability to lead teams and balance strategic planning with tactical actions to achieve results. She is seen as a strong problem solver who builds trusted partnerships with clients. Since joining Context in 2012, Gypin has been instrumental in leading complex due diligence initiatives and key integration efforts following mergers and acquisitions.
  • Jason Nickerson brings more than 10 years of agtech and sustainability experience across public, private, and social sectors. After joining Context in 2016 as a consultant, he has served as global strategy and sustainability director, and most recently, as a principal. His expertise includes development finance, capital allocation, product development, and go-to-market strategies that prioritize target market segments, enabling his clients to achieve sustainable growth and success in their respective markets.
  • Kris Pauna came to Context in 2017 as an expert on seed treatment, drawing on his prior experience in crop protection and seed with Syngenta. In his most recent role as a principal for Context, he has led key project management initiatives in which he has helped drive powerful results for clients, Pauna brings know-how in brand management, market analysis, pricing, revenue modeling, financial modeling, and business valuation.

With these promotions, Context expands its slate of leaders to twelve partners. Founded more than 30 years ago, The Context Network is committed to applying its consulting practice toward advancing agriculture to be more productive, efficient, and sustainable.

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Market Sectors, Region, Services, Uncategorized

Business model innovation: Shared risk can lead to reward

Market dynamics are driving players across the agriculture value chain to explore new pathways for innovation. With an increasingly challenging environment for novel product development, companies are considering other innovative ways to differentiate their offering and garner loyalty, including new business models. In this environment, a business model built around risk-sharing warrants a closer look. Christian Guffy, Partner with The Context Network, shares his point of view.

Many of the product innovations that shaped modern row crop production as we know it—such as traited seed and mechanization—are widely adopted and have largely become table stakes. Product-driven companies are also finding that it’s no longer realistic to solely rely on a new product pipeline to outpace the commoditization of legacy products or to work around go-to-market challenges. While there are pockets of tremendous innovation to the industry, many pipelines are generally not as robust as they once were. Rising regulatory costs and timelines have played a role in slowing the pace at which new products are approved for the market. The average cost to commercialize a new synthetic chemistry product now exceeds $350M, based on historical growth of development costs documented in one study.[i] Another study in 2022 showed that the average time to bring a new GM trait to commercialization increased 26% between 2012 and 2022.[ii]  As a result, legacy crop input providers find themselves vying in an increasingly crowded marketplace, making it challenging to maximize the value of their products.

With this confluence of factors challenging and shifting product innovation in long-standing product categories such as chemistry and traits, the concept of engaging differently with customers has elevated in importance. While business model innovation can come in many forms, one of the most compelling approaches today is one in which companies participate in the the upside (returns) and downside (risks) with their customers.

In this article—the first in a series on risk mitigation—I will discuss the historic compartmentalization of risk and the potential benefits of relationships which seek to engage in risk sharing. In January, I’ll share strategies and considerations for risk sharing specific to the upstream market, including product-driven/input companies, retailers, and cooperatives. In subsequent articles, I’ll collaborate with Context colleagues to explore the possibilities and benefits of risk sharing throughout other segments of the value chain, including processing, distribution, and food production.

From segmented risk to integrated risk

Risk management isn’t new to agriculture and food production. Elements of risk have always permeated the sector—from the continuous risk of inclement weather that growers face, to the risk of ingredient scarcity that food companies aim to address when they negotiate supply contracts.

Yet, while every player in each component of the value chain bears business risks (and some of those risks, such as capital risk, are universal), these risks have historically been highly compartmentalized. Equipment, crop protection, crop nutrition, and seed companies, for example, shoulder the risk of inventing new products and pricing them right for profitability and ROI with growers. Retailers and distributors bear the risk of building infrastructure and hiring the labor needed to be the boots-on-the-ground with growers. They also have to manage the right level of inventory to deliver product just in time. Growers assume the risk of choosing which products to use for the season, coupled with heaps of execution risk centered on in-season production factors. Processors and traders carry their own set of significant fixed asset risks, along with market and trading risks which largely hinge on macro-demand factors. The list of relatively siloed risks goes on throughout the value chain.

Historically, risk is siloed across the value chain:

A traditional value capture model reinforces fragmented risk, as it is predicated on companies setting a price that is passed along to the next value chain participant, and the price is based on expected return on investment (ROI), not actual ROI. Once a product is purchased, all risk and potential reward shifts to the buyer. Said differently, if a product performs well, the buyer enjoys great outcomes. If a product doesn’t perform as expected, the buyer bears the consequences of the poor outcome. Likewise, if a product performs extremely well, the seller doesn’t financially benefit from the upside of that performance, as the price (and risk) was already passed along.

In the traditional value capture model we’re all familiar with, the market naturally adjusts product pricing over the long term. Growers won’t keep using consistently poor performing inputs, food brands won’t keep purchasing subpar ingredients, etc. However, in the short term, players in different segments of the value chain bear the swings in “fortune” of a historically volatile system, as weather events decimate crops or global conflict hobbles the commodity supply chain, for instance.

What if this paradigm changed? What would it mean to adopt an innovative business model in which companies choose to engage in certain risks with their customers and/or other downstream value chain participants? What would it mean if you choose not to engage?

In a risk sharing model, players purposefully assume some of the risk they would traditionally pass on to another segment of the value chain—with the goal of also sharing profit or savings in the event of success. It’s worth noting that the practice of risk sharing already exists within certain segments of the value chain. The grower cooperative system, for example, is functionally designed to ensure that individual growers will be somewhat insulated in scenarios where they might otherwise be at risk due to their negotiation power. Warranties are a form of risk mitigation as well. Risk sharing models are also familiar in other industries, like performance-based programs in healthcare, in which doctors receive a portion of their payment based on quality of care.

In addition to the market forces described earlier, another key factor enabling business innovation through risk sharing is the increasing abundance of agricultural data. The ongoing proliferation of data collection and analysis tools make it more feasible to accurately capture and more accurately attribute the value of product performance, though significant progress is still needed to bring this fully to life. Value attribution will ultimately be the key to linking specific product or practices to intended outcomes. This means pricing can be assessed based on actual ROI, a win for both parties over the long term.

Business model innovation based around risk sharing will have an increasingly profound impact in the food and agriculture industry. Several companies are actively engaged in piloting risk participation programs. Consider how a risk sharing strategy (or not pursuing one) aligns with your business goals and how it might impact your customer and supplier relationships.

Ask yourself:
    1. Which risks and which value chain partners will be most meaningful to engage with? For example, a product company may choose to engage in and growers in their execution risk.
    2. What band(s) of risk are you willing to engage in, and how will it affect your own credit position and cash flows? For example, reconciling product performance at harvest could push cash flows three to six (or more) months later for many input companies.
    3. What kind of value exchange mechanisms need to be crafted or leveraged? There are many mechanisms, such as performance guarantees, value-based contracts, cash-back programs, contract production, bonus triggers, etc.

At The Context Network, we’re helping organizations explore new business models and other innovation pathways to help them succeed. Through our deep business knowledge and broad network of experts, we can help you evaluate opportunities and craft strategies. To discuss what risk sharing could look like for your business, reach out to me at christian.guffy@contextnet.com.

 

Christian Guffy, Partner, brings experience in consulting, strategy development, and financial analysis in a variety of industries including agribusiness, investment finance, and retail. He has helped clients develop long term strategic plans as well as annual go to market strategies rooted in fundamental market analysis and research. He has also advised companies on corporate financial planning including capital expenditures, business unit divestitures, and strategic acquisitions. As a result of these client engagements and his prior experiences, Christian is well suited to engage clients in pursuit of their overarching business objectives.

[i] Progressive Farmer. “The Price of New Chemistry.” April 14, 2016. https://www.dtnpf.com/agriculture/web/ag/crops/article/2016/04/14/cost-time-commercialize-rise
[ii] AgbioInvestor 2022/CropLife International Members. “Delayed Innovation. Why are overall timelines moving in the wrong direction?” AgbioInvestor 2022/CropLife International Members
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The Context Network’s ESG Expert Jason Nickerson Promoted to Principal

The Context Network’s ESG Expert Jason Nickerson Promoted to Principal

 

WEST DES MOINES, IOWA (July 7, 2022): The Context Network (Context), an agribusiness consulting firm, broadened its leadership team with the promotion of Jason Nickerson to principal.

Nickerson most recently served as program director at Context with a focus on global strategy and sustainability. As a principal, he will bring 10 years of sustainability consulting experience to help companies throughout the food and agriculture value chain establish and achieve ambitious sustainability and social impact goals.

Context Partner Matt Sutton-Vermeulen said, “Jason can walk into a boardroom or a machine shed and bring the best out in everyone. He combines well-honed financial and analytical skills with an intuitive grasp of public-private dynamics in food and agriculture. Our clients—and increasingly, their shareholders and supply chain stakeholders—are more focused than ever on sustainability, and Jason can help them gain greater visibility and accountability around critical environmental and social impacts.”

Since joining Context in 2016, Nickerson’s advisory work has centered on combining market analytics, decision sciences, and marketing strategy to unlock financial and social value. He has helped global agribusinesses evaluate product-market fit, define go-to-market strategy, and hardwire ESG into their operations. Within the development realm at Context Global Development (Context’s not-for-profit sister organization), Nickerson has been instrumental in designing, implementing, and investing in transformative food systems initiatives via partnerships with donors, governments, and non-governmental organizations.

“There’s no challenge today more worthy—or more complex—than climate change,” Nickerson said. “Energy is galvanizing around solutions within the agricultural sector, and investors expect it. I’m thrilled to be part of the leadership team at Context that’s focused on helping our clients address this challenge head on.”

In addition to his background in ESG strategy and implementation and in global development, he brings depth in risk management, deal structuring, and transaction evaluation. Nickerson served as a Peace Corps volunteer in Central Asia and holds an MBA from Duke University. Beyond his work for Context, he currently sits on the board of Seed Programs International, an NGO that connects vulnerable communities with access to vegetable seed.

With the promotion of Nickerson, Context continues to grow its slate of leaders, with eight principals now working alongside the firm’s nine partners. Founded more than 30 years ago, the Context Network is committed to applying its consulting practice to advance agriculture to be more productive, efficient, and sustainable.

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The Context Network Gets Precise about Environmental Benefits of Precision Agriculture

The Context Network Partner Doug Griffin, who was recently named to the Association of Equipment Manufacturers (AEM) Ag Sector Board, led a Context team that helped AEM and other industry associations quantify the environmental benefits of precision agriculture. Griffin shares what they learned here:

The name says it all. Precision agriculture is about applying the right amount of the right thing (e.g., seed, nutrients, fertilizer, water) in the right place. But until recently, there was little precision in the data about the environmental benefits of these technologies.

The Association of Equipment Manufacturers (AEM) recognized that void. While there was plenty of good information about the economic benefits of precision agriculture, there were only bits and pieces that quantified its impact on the environment. With arguably no topic in agriculture more pressing today than sustainability, AEM envisioned a cohesive study that multiple organizations could stand behind. It partnered with the American Soybean Association, CropLife America, and the National Corn Growers Association to take a close look at the environmental benefits of precision agriculture through five lenses: productivity, fertilizer reduction, pesticide reduction, fuel savings, and water savings.

The study focused on five prominent areas of precision agriculture technology:

 

Auto steer, also known as auto-guidance, uses GPS to automatically control the tractor’s path during seeding, spraying, and harvesting. This improves efficiency and reduces soil compaction because it avoids overlapping and missed spots in the field.

 

Machine section control can turn planter, fertilizer, or sprayer sections on or off in rows that have already been seeded or sprayed. It also senses shorter rows (i.e., point rows) and turnrows and adjust treatment automatically, based on field data in GPS.

 

Variable rate technology determines the right applicable rate for seed, fertilizer, and crop protection products. It often uses supporting technologies such as crop and soil sensors, yield monitors, and preprogrammed maps.

 

Fleet analytics and telematics enables famers to monitor their equipment in real time and from a distance, including GPS location tracking, equipment idling, and route suggestions.

 

Precision irrigation technologies (specifically, sensor-driven center pivots) can apply different amounts of water to different parts of a field to reduce overall water consumption, without jeopardizing crop performance.

What Context Learned

The AEM study found that precision agriculture—at its current adoption level—quantifiably enhances sustainability through more efficient use of land, water, fuel, fertilizer, and pesticides.

Productivity:

4% current increase in yield

To put it in tangible terms, this adds up to 10.2 million acres of cropland avoided due to more efficient use of existing land. That’s the size of 4½ Yellowstone National Parks!

 

Fertilizer use:

7% current increase in fertilizer efficiency

For one farm in central Illinois, variable rate precision agriculture technologies, in combination with other climate-smart practices, lowered the farm’s costs by $67 an acre, and reduced CO2-equivalent greenhouse gas emissions by more than 15%.

 

Herbicide use:

9% current reduction in herbicide use

In practical terms, this adds up to an astonishing 30 million fewer pounds of herbicide.

 

Fossil fuels:

6% current reduction in fossil fuel use

This equates to 100 million fewer gallons of fuel—or taking 193,000 cars off the road each year.

 

Water use:

4% less water usage currently

Variable application of water is conserving enough water to fill 750,000 Olympic swimming pools.

It’s been exciting to help bring these findings to light and to see the way they’re resonating with a diverse audience. Equipment manufacturers are embracing the study—and sharing its findings to help farmers make important decisions. Investors are reading the study—and it’s buoyed their confidence in the sector’s commitment to sustainability. Politicians are reading it—and it’s shaping the policies they are putting forward.

 

What’s Next?

While the environmental impact of precision ag is significant today, the reality is that adoption rates are still quite low, creating potential for more positive impact with broader adoption. Auto guidance/autosteering is the most widely embraced by U.S. farmers, but even its adoption rates are uneven today—at 25% to 80% of potential. Adoption of machine section control and variable rate technologies hovers between 5% to 45% and 2% to 54% of potential, respectively. And adoption of machine/fleet analytics and precision center pivot irrigation is currently at less than 12% and 22% of potential, respectively.

The potential for additional water savings is especially meaningful. Full adoption of technologies such as variable rate precision irrigation and soil moisture sensors could trim another 21% in water usage. The potential to reduce the use of fossil fuels through broader adoption of precise agriculture is profound too. By leveraging auto guidance and machine telematics, fossil fuel use could decrease another 16%. With full adoption of precision agriculture in other areas, the study estimates an additional 6% productivity gain is possible. The gains already achieved in fertilizer and herbicide efficiency could be increased by 14% and 15%, respectively, through full adoption in the future.

With this study in hand, AEM can now share compelling, factual findings with all kinds of stakeholders, from farmers to state directors of agriculture to consumers. The association is focusing on four pathways to help accelerate adoption: government policies that reward innovation; increased farm income to help foster investment; improved wireless infrastructure; and consumer communications that build trust in the science.

The Context Network is currently working with AEM on an extension of this study that quantifies the environmental benefits of modern dairy technologies. Context’s know-how in the agricultural equipment sector, our dedication to sustainability, and our broad network of experts allow us to tackle big questions like these. For more than three decades, we’ve been helping organizations all across agriculture identify trends and plan for opportunities. To discuss or learn more about the environmental sustainability of today’s cutting-edge technologies and equipment—reach out to me at doug.griffin@contextnet.com.

Thank you to the Association of Equipment Manufacturers (AEM) for allowing The Context Network to share the full study: https://newsroom.aem.org/precision-agriculture-improves-environmental-stewardship-while-increasing-yields/”

Doug Griffin is a high-energy executive with wide-scope senior-level leadership experience including commercial P&L management, global strategy development, branding, sales, marketing, channel development, and product management. He is experienced with driving culture change, process management, and execution of strategic plans.

Griffin joined Context in 2015 after a 27-year career in ag equipment, including 13 years with AGCO Corporation and 14 years with Caterpillar. He holds a BS in agricultural engineering from Purdue University. He resides in Atlanta with his wife.

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Press Release: The Context Network Expands Leadership Team

WEST DES MOINES, IOWA (April 29, 2022): The Context Network (Context), an agribusiness consulting firm, has expanded its leadership team, naming Kellie Gypin and Kris Pauna as new Principals.

Context Chairman of the Board James Mann said, “Both Kellie and Kris are already driving change within Context. They bring incredible insights that have not only earned the trust and respect of their colleagues but have delighted our clients. Kellie leverages extensive experience leading large complex initiatives across multiple industries, and Kris combines his deep industry knowledge in seed and crop protection with a zeal for seeing new approaches. They are both strong additions to our leadership team who will help drive Context’s growth across the agricultural, food, bioscience value chain.”

Collectively, Gypin and Pauna have more than 40 years of impactful agribusiness experience. Gypin joined Context in 2012 and has led key business development and program initiatives. She is known for her ability to lead teams and balance strategic planning with tactical actions to achieve results. She has been instrumental in complex due diligence initiatives and leading key integration efforts following mergers and acquisitions.

Gypin said, “It’s exciting to see Context evolve, keeping pace with accelerating technological innovation and the entry of new companies in the food and ag space. I look forward to building on the firm’s three decades of deep industry support as we grow into the next iteration of who we are.”

Prior to joining Context, Gypin worked for 17 years at MeadWestvaco, a Fortune 500 pulp and paper company and then at ArborGen, a leading provider of advanced genetics for the forest industry. She holds a Bachelor of Science degree in mathematics from the College of Charleston. In addition to her expertise in leading large-scale initiatives, Gypin provides depth in data management, product pipeline management, process development, and product/solution evaluation.

Pauna came to Context in 2017 as an expert on seed treatment, drawing on his experience in crop protection and seed with Syngenta. Shortly after joining Context, he took ownership on key project management initiatives, where he helped drive powerful results for clients, demonstrating his mettle in strategy development, marketing, finance, and operations. “The power of Context’s network was apparent to me very early on,” Pauna said. “We’re able to uncover issues and identify solutions that give our clients a competitive advantage in the market because we walk in with real, grounded knowledge about their industries. I’m thrilled to be part of a team that’s not only committed to doing what’s best for our clients, but also finding unique ways to do that.”

In addition to his background in the global seed treatment and global biologicals markets, Pauna brings know-how in brand management, market analysis, pricing, revenue modeling, financial modeling, and business valuation. He holds an MBA from the Carlson School of Management at the University of Minnesota and a Bachelor of Arts degree in business economics from Moorhead State University.

Founded more than 30 years ago, The Context Network is committed to advancing agriculture to be more productive, efficient, and sustainable.

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The Unintended Consequences: Enhancing Resiliency in the Egg Supply Chain: Consumers, Part 4

COVID-19 has challenged numerous global and U.S. supply chains, shedding light on weaknesses in the systems.  The food supply chain certainly was not immune. While bare shelves and empty coolers are eye-opening and may seem temporary to consumers, the impacts on the disruption will have long-lasting implications from an economic, environmental, and social standpoint.

In this fourth and final installment of our Unintended Consequences series, we explore the implications and future outlooks for consumers as it relates to the egg supply chain.

Consumers have seen several scenarios play out due to COVID-19. With the egg industry, first came the shortage on retail shelves and a temporary increase in cost. As dominoes fell around them, consumers got a sneak peek into how their food system operates, but few were able to completely grasp the complexities of getting food from farms to new end-users, in this case, the grocery store.

As we mentioned previously, two-thirds of the egg industry grows eggs for shell eggs or retail use. The other one-third of the industry grows eggs for egg products. Unfortunately, there is little overlap between the production systems and therefore transitions from egg product to shell eggs for retail use were not as easily attained, causing a shortage on one end while the other side had a surplus. While the shortage of eggs in a retail market was temporary, there have been some long-term economic, environmental, and social impacts that will benefit bottom lines moving forward.

 Long-Term Economic Impacts:

Product Availability at Restaurants, Cafeterias, Schools: As restrictions of shelter-in-place orders lift, and consumers return to a new “normal”, there may be an impending shortage of eggs available at food service entities. While there are supplies to meet demands now, we must be cognizant of the volume of birds temporarily taken out of production through molting and permanently through euthanasia, a number that is still not readily available, but it is likely to be significant. Building up production to pre-COVID-19 levels will take time. Between rebuilding flocks, there are only so many chicks available annually, and while growing them to egg-producing maturity, a 16-20 week process, supplies will be limited within the egg product sector. The length of time and financial impact are areas that need to be examined further.

Production Losses: Rural communities may also be impacted economically from these shifts in consumer spending. The Midwest is the epicenter of egg product production and thus will see scenarios play across the Heartland. There will be some farms with significant debt loads that cannot weather this storm. Losses of jobs, local tax revenue, and more will add up for these individuals and communities at-large, adding more burden on already financially strapped rural America.

Environmental Impacts:

Resources– Food waste is an environmental concern. Dumping liquid egg products and hen carcasses can be viewed as just that – food waste. While we’ve explored the reasons whythis happened, we still cannot ignore the implications of throwing away food. There is more to dumping than just the economic impacts to the producers. There are also wasted resources: those needed to produce the feed and also grow the flocks. What is the environmental cost of having those resources wasted? What sort of resources will it take for the industry to get back to “normal”?         

Landfill Waste – Another thing to consider is the additional landfill waste brought from these changes. Rotting, wasted food produces methane gas – something climate scientists are already watching closely. What is the overall egg industry environmental impact when a percentage of products goes to landfills?

Social Impacts 

Food Shortages/Security– The U.S. prides itself as an efficient, modern food system. For consumers, are their impacts on perception of our food security with shortages that will span for months to years? Are there impacts or movements to push for more ease in food pantry donations or local points of sale? What can the industry do to proactively manage changes or needs of the consumer?

Visuals of Euthanasia – While the egg industry has done a good job to date of managing the crisis of having to depopulate flocks, other parts of the food production industry have not faired so well – with visuals of mass euthanization and dead animals. What are the repercussions to workforce members whose day-to-day responsibility and self-actualization are centered on being caregivers when having to end the life of the flock prematurely? And the impacts on consumer’s from these visuals? Granted, we are leveraging experiences from depopulations due to diseases like high pathogenic avian influenza (HPAI), but depopulations triggered by economics may be different. And, are there lessons the egg industry can be learned from this experience to prepare for future crises?

This series has certainly laid out a broad range of perspectives for the egg industry and identified gaps for the industry consider further. At this point, there is still a lot of unknowns. But, that is the significance of bringing the industry together, sharing perspectives, borrowing from adjacent industries, and developing a plan of action moving forward.

Throughout this series, The Context Network has performed a deep dive into the intricacies of the egg industry by including perspectives spanning the supply chain. We’d like to thank United Egg Producers, Egg Industry Center, and Oskaloosa Foods for their contributions to this series.

If you’re interested in working with Context to work through these or any other issues, please contact me at matt.sv@contextnet.com