Category Archives: Uncategorized

AG Development, AG Innovation, AG Inputs, AG Investment, AG Outputs Distribution, AG Production, Asia/Pacific, EEMEA, Latin America, Market Sectors, North America, Uncategorized

Building The Business Case For Custom Planting

Embracing technology does not come easily to all farmers, and Ed Kasper sees a business opportunity in that reality. Kasper, a farmer and precision ag equipment dealer in northern Illinois, is preparing to offer custom planting services in his area. He figures he can share the benefits of new planter technology with farmers who aren’t ready or able to purchase the technology themselves.

Those benefits? With planting technologies improving by leaps and bounds in recent years, the discussion revolves primarily around higher yields.

  • The latest variable-rate seed meters put seed in the ground at different rates depending on field conditions. This allows a farmer to use just the right amount of seed – not planting too little in fertile ground or too much in soil that doesn’t produce as well. The result? Higher yields and less waste.
  • Down-pressure technologies use electronic sensors and hydraulic cylinders to keep the planter in constant contact with the ground so that seeds are planted at an optimal depth. Planting seeds too close to the surface or too deep can dramatically reduce yields.
  • Another technology controls seed movement from the planter to the ground so that seeds are planted one at a time with equal spacing. Rather than planting at a traditional 4 or 5 mph, a farmer can plant at up to 10 mph while maintaining proper spacing of seed, which can significantly boost yields.

Another important benefit of new planter technologies is that farmers can plant more acres during the all-important planting window. Farms are becoming larger, and that means producers feel more pressure than ever to plant when it’s exactly the right time to get seed in the ground.

Farmers are adopting new planter technology in two ways. Some – particularly those with larger operations – are buying new planters, which can cost hundreds of thousands of dollars. Others are retrofitting existing planters with new technology, which can mean investing $50,000 to $100,000.

Doug Griffin, Principal at The Context Network, notes that operators of large farms can easily see the payoff when they spend that amount of money. Those with smaller operations must look much more carefully at potential expenditures, particularly with today’s lower commodity prices. They may be cash-constrained or nervous about using new technology. In addition, they might be stretching out the life of their equipment so they can invest available cash in more land.

“Any capital investment a farmer makes is always carefully scrutinized,” Griffin says. “And as long as commodity prices stay low, farmers are reluctant to make big investments in technology – but by not using new planter technologies, they’re giving up yield.”

shutterstock_786484591

The ever-present tension between investment and yield creates the niche for custom planting. A custom planter could serve farmers who won’t use the technology, can’t afford the technology, or don’t know how to use the technology. The business model would not be new; other custom for-hire services are common in agriculture. “If you hire someone else to spray, why not hire someone else to plant?” Griffin asks.

He notes that any move into custom planting would need to start with building the business case around the concept, considering the risks, benefits, and payback of such an operation. Risks and rewards will vary from location to location.

Brett Peelen, a farmer and precision agriculture technician in northwest Iowa, agrees. The biggest question, he says, is “Does it pencil out?”

He says custom planting rates in his area would make such a venture dicey. “The math doesn’t work out here yet,” he says. “The challenge will be finding that good operator … and finding the acres … I see it more as a way for a farmer to get extra income and bring a kid back home to the farm.”

Across the border in Illinois, Kasper has meticulously counted the acres he would need to make a go of it in his area. He’s also looked carefully at how many acres he can fit into a shrinking planting window. In his area, near Lake Michigan, the planting window in the past was two weeks; today, because of changing weather patterns, it’s closer to nine days. To make a custom planting operation work, he would focus first on farmers to his south, where the planting window opens earlier, and then “follow Mother Nature” north.

Griffin says all farmers are from Missouri – the Show Me State – when it comes to changes in farming operations. He suggests they test custom planting – for example, for one year or on 100 acres – to see the improved technology results for themselves.  “Let the customers experience the difference for themselves,” says Griffin.

Kasper says he understands farmers’ caution. Planting is the foundation for a farmer’s operations that year; everything else is built upon it. “Your corn planter is the lead engine of your train of consequences,” he says. “If your planter screws it up, your train goes off the track.”

Education is key to growing the market. Griffin says: “If I were an equipment dealer, I would be talking to my coop or ag retailer about the concept. If I were a coop, or retailer, I would be talking to my customers about improving yields with new planter technology. Equipment dealers must help educate retailers and coops that could use this, and coops must educate their customers.”

“This is an opportunity for equipment dealers and retailers to add value,” he says. They can offer a service that no one else offers and provides an opportunity to solve a pain point for a customer that otherwise would not have accessed the technology.

Kasper says that once you educate growers about the benefits of new technology, they’ll want it. Peelen agrees. “It’s an exciting time to be in precision ag. If you can get a guy in the cab to see what the planter does, it will win him over. That’s going to make this market explode.”

Kasper is betting his Iowa counterpart is right. “We’re going to start the ball rolling,” he says. “My philosophy is to always say yes if there’s an opportunity.”

Context has many years of experience in helping organizations in the equipment industry identify and execute go-to-market strategies that address customer needs in changing economic environments. Through deep business knowledge and a broad network of growers, dealers, and experts, Context can glean current market information to gain an understanding of what expectations exist in the particular market cycle.

For more information, contact Doug Griffin at doug.griffin@contextnet.com.

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

The Context Network Invests in Women in Agribusiness

The Context Network made a strong commitment as a diamond sponsor of the Women in Agribusiness Summit on September 24-26, 2018 in Denver, Colorado.

Sometimes three minutes is all you need.

sivakumar_priya-casual-1

Priyamvadha “Priya” Sivakumar made the most of her three minutes when she met Context Principal Asha Lundal in passing at the Women in Agribusiness (WIA) Summit two years ago. Sivakumar was working toward her master’s degree in agribusiness when she was invited to work as a student volunteer at the summit, where she met a number of female agribusiness professionals.

While brief, her conversation with Lundal stood out. “I hadn’t realized an organization like Context existed. It seemed too good to be true, a place where I could merge my consulting experience with my passion for food and agriculture,” Sivakumar says.

Returning to the WIA Summit the following year on a coveted student scholarship, Sivakumar had already done her homework. Throughout the year, she had reached out to others at Context; at the summit, she reconnected with Lundal. That led to interviews with Context executives and an offer to join the firm as a senior business analyst. “It worked out perfectly,” Sivakumar says. “Before I even finished my graduate work, I had the perfect job.”

Sivakumar’s passion for food and agriculture has deep roots. As a child in India, she would sneak into her mother’s “forbidden” kitchen to concoct snacks, experimenting with spices. While studying food process engineering as an undergraduate, she developed a commercial product (now under patent) that shaved hours off the preparation of a traditional gravy, while preserving its taste and nutritional value.

But it wasn’t until she worked for several years as a project management analyst in telecommunications for one of the world’s largest consulting firms that she realized she wouldn’t be satisfied until she merged her professional expertise with her interest in food and agriculture. This led her to move to the United States and enroll in Texas A&M University’s graduate program in agribusiness.

Sivakumar credits the WIA Summit with providing a collegial forum where women in the industry can connect and learn from one another. “Walking into a room filled with 500 executives could feel intimidating, but it doesn’t. Everyone is friendly and wants to see you advance in the industry,” she says.

She was thrilled to learn that Context, a WIA sponsor for three years, stepped up to diamond-level sponsorship of this year’s event, which was held September 24-26, 2018 in Denver, Colorado.

Lundal also cheered Context’s increased investment. She notes that the firm has long recognized the power of assembling project teams with diverse perspectives to solve clients’ toughest problems — whether that diversity stems from gender, ethnicity, age, education, or geography. “What WIA stands for is consistent with Context’s values,” Lundal says. “It is meaningful to me personally – and it also makes good business sense.”

cntxt_0185

The sponsorship is a natural fit, says Lauren Chupp, Associate Principal at The Context Network. The WIA Summit highlights networking, the foundation of Context’s business model. “It’s something we’re really good at – relationships and focusing on people,” she says. “I have seen, and experienced myself, that core strength we have as a company.”

Chupp says she has benefitted from strong mentors within Context, including a principal who has provided professional help and advice for more than a decade. She calls that generosity of spirit a “critical piece” of Context’s business success.

Photo: Gloria Basse, Lauren Chupp and Jessica Langley of The Context Network

Strength in numbers

The need for women in agribusiness is widely acknowledged but hard to quantify accurately, notes Joy O’Shaughnessy, managing director of HighQuest Partners, which initiated WIA. While nearly equal numbers of men and women in the United States earn agribusiness-related college degrees, [1] they do not equally share employment in agribusiness companies.

Recognition of this gap, however, can help close it. O’Shaughnessy says the WIA was born after her colleagues noticed “a distinct lack of women” at a major industry conference in 2011. She says women were being overlooked when companies chose someone to send to industry conferences – leaving them a step behind their male colleagues in continuing professional education.

“We want women to be informed and educated… If you were to take the word women out of our title, WIA would be a fantastic industry conference,” O’Shaughnessy says. “But putting women in the title helps companies recognize that they can’t just send the same person to this conference they send to all the others.”

In 2012, 212 people attended the WIA Summit. That number grew to 450 in 2013. Now in its seventh year, the conference sold out in August; more than 765 women were registered to attend.

Leadership training

In addition to providing professional development opportunities, the WIA Summit helps attendees build leadership skills and increase their presence in the business community. This year Marianne Smith Edge, Context senior associate, helped provide training in a session titled “Landing a Board Position.” A former senior vice president for the International Food Information Council and former president of the Academy of Nutrition and Dietetics, Smith Edge draws on her many years of board engagement, including her current role on the Board of Editors for Nutrition Today and previous terms on the USDA National Research, Extension, Education, & Economics Advisory Board, among other boards.

Gloria Basse, Context senior associate and WIA board member, calls such training critical. “We need to develop and grow women leaders,” she says.

Basse stepped into WIA leadership after attending one of the early conferences. She noticed that no presentations dealt specifically with livestock, her specialty. “The question for me was, how do I find, in a sea of people, the people with whom I really want to network?”

Her answer was to initiate a dinner the next year for women in protein, an event that has become increasingly popular each year, drawing together women with similar professional interests. She also joined the WIA board four years ago. “It has given me a terrific opportunity to meet other senior women leaders,” she says. “If I would have had exposure to WIA early in my career, I would have had a much different experience.”

It’s important, Basse says, for every professional woman to build a strategic network of women and men, inside and outside her company, who can help her advance her career. The connections a woman can make through WIA enhance that network, she says.

Networking toward an evolving future

As agribusiness has evolved, Lundal and Chupp note, Context has grown from its origins into a global strategy and management consulting firm working for clients across the entire food system and across geographies. “We’re playing in a much broader space,” Lundal says. “It’s business-critical for us to have and leverage a variety of perspectives in unique and valued ways for our clients. There are legitimate drivers for thinking about the makeup of our team.”

Chupp notes that the changing nature of Context’s work has attracted increasingly diverse individuals, with more women and people of varied backgrounds making important contributions. “We’re in an evolution, right alongside our clients who are experiencing parallel changes to their workforces and their customers. Ultimately, we’re taking steps to ensure our teams reflect the world we live in and do business in,” she says.

Among those steps, Lundal says, are progressive approaches to employment that attract today’s agribusiness and food industry professionals, including millennials and Generation Zs. For instance, Context was an early adopter of virtual teams. Such teams enable the company to leverage key talent around the globe regardless of physical location and encourage its team members to live where they wish and to engage in projects about which they are passionate. She admits such flexibility is key to her own relationship with Context.

She also notes that, in the changing environment, some of the strongest contributors are women.

“I personally want everyone to understand Context’s commitment to diversity and the value we see in it,” she says, calling the WIA venue “very aligned … to what we think it takes for us and our clients to be successful.”

Sivakumar spread the word early about the upcoming conference. “I am interested in making sure other women get the benefit of this,” she says.

Lundal sees a payoff in the future. “Today I am the only female principal among 12 at Context,” she says. “But with the talented women in our organization, it’s clear I won’t be alone for long.”

The Women in Agribusiness Summit brings together women who are passionate about agribusiness and the need to recruit, retain, and advance women in the industry. It provides an opportunity to network, learn about industry outlooks and trends, and develop valuable professional skills.

 

[1]https://nces.ed.gov/fastfacts/display.asp?id=37

AG Development, AG Innovation, AG Inputs, AG Outputs Distribution, AG Production, Asia/Pacific, EEMEA, Insights, Latin America, Management Consulting, North America, Strategy Consulting, Uncategorized

The Future Face of Service

Farmers have long relied on trusted service providers to advise them on equipment, crop inputs, accounting, and more. The concept of “great service” is intertwined with the familiar face of an agronomist or local tractor dealer, a warm handshake, and a conversation in the field or across a desk. While the need for trustworthy service isn’t going anywhere, The Context Network predicts a ground-shifting change in the character of service that farmers will expect in the future.

During the next 10-25 years, technological advancements in precision agriculture, coupled with disruptive entrants in the market, will dramatically redefine the service-based ag economy. While relationships will remain a critical aspect of service, they won’t hinge upon any particular individual. Rather, service will center on precision ag platforms that help deliver insights. The Context Network Principal Doug Griffin says, “The most valued service providers will be those who can interpret a grower’s data and make smart recommendations with the profitability of a farmer’s entire enterprise in mind.”

Based on recent conversations with industry experts, Griffin recognizes big opportunities—and potential blind spots—for the ag equipment sector in this future service landscape. He observes, “Equipment dealers and manufacturers have a head start with precision ag tools that collect valuable data, so the equipment channel is well positioned to deepen advisory relationships by helping farmers understand their data and creating complete solutions that boost farmers’ efficiency and profitability.”    

However, dealers and manufacturers who rest on their laurels could find themselves displaced by new entrants with a price-first/service-second offer. As ag equipment become smaller, autonomous, and more interoperable, web-based equipment sales are truly viable, which opens the door for new purchasing venues. Griffin says, “The equipment market isn’t immune to direct retailer or virtual retailer concepts we’ve seen gain traction in the crop input and ag retail market. To remain relevant, equipment dealers and OEMs need to develop differentiated services that are less about selling equipment and more about creating equipment-based solutions to growers’ problems.”

shutterstock_675499270

For example, instead of the traditional model in which a farmer owns his own equipment, the farmer of the future might prefer to pay an annual fee that ensures timely access to adequate horsepower to farm “x” number of acres and perform “y” operations. In the model of the future, equipment services providers will “prescribe” equipment fleets that are seasonally timely and impeccably matched to the needs of a farmer’s operation.

Griffin says this change is already underway as farmers seek to minimize the uncertainty and risk of owning and maintaining increasingly expensive and technologically complex equipment. He says, “Farmers absolutely want the capabilities the latest equipment provides, but they don’t necessarily want that asset on their balance sheet. They’re already shifting the financial risk of owning equipment up the channel to dealers and manufacturers through leasing models and maintenance agreements.” In the future, complete equipment solutions are likely to emerge that supplant traditional leasing, financing and ownership models. This will have a significant impact on equipment manufacturers and dealers as capital requirements change and profit realization shifts.

With these changes in the marketplace, the equipment channel has an opportunity to secure its place as “trusted advisor” role by delivering complete solutions and services, rather than merely products. The Context Network has many years of experience in helping agriculture equipment organizations identify future trends and develop strategies for succeeding in changing environments. Through our deep business knowledge and broad network of growers, dealers, manufacturers and other experts, we can help anticipate and plan for long-term market opportunities.

For more information, contact Doug Griffin at doug.griffin@contextnet.com.