Pigweed, Crickets, and Squalene: Are Startups Ag Tech’s New Hope?
Editor’s note: This post was contributed by Blake Hurst. Blake is a farmer in northwest Missouri, who grows corn, soybeans, and flowers with his extended family. He and his wife Julie have 3 children and 6 grandchildren. Hurst is also president of the Missouri Farm Bureau. You can follow Blake on Twitter at @HurstBlake.
I spent a couple of days in September listening to the dreams of a bunch of inventors, entrepreneurs, and visionaries, who were making their pitches to investors from around the world. New companies at this year’s InfoAg conference made presentations about gee whiz technologies — companies lacking only money, loads of money, and oh by the way, they’re short on customers as well. We’re in the middle of a tech boom in agriculture, the first one I can remember, and we’re seeing an exciting influx of venture capitalists and geniuses into the farming industry. There may be a few charlatans in the mix as well.
The only people conspicuously absent at this event were the farmers who will someday, everybody hopes, pay for all of these ideas. This scene of slide presentations, talks about various kinds of financing, plans for roll outs, and worries about burn rate bears little resemblance to the average farm show, where farmers and salesman discuss the latest new attachment for tractors or the newest high-yielding seed. Yet this event had a lot in common with the typical farm show too, as the owners of these firms making a successful pitch meant the difference between success and failure. It was exciting to think that some of the innovations might someday be explained to farmers inside the big tent at a farm show, with farmers kicking the dirt, and wearing brand new baseball caps, and holding sacks full of well-branded giveaways.
Of course, we’ve had investment booms in agriculture. Some farmers took the ride during the consolidation of the pork industry, and many participated in the ethanol boom that blew through the Midwest like a March tornado. That experience is one most of us will never forget. Some of us won, some of us lost, and some of us managed to do both; it was exhilarating.
We’ve also lived through rapid technological change: the increasing size and complexity of machinery, new chemistry to fight weeds and bugs, and the genetic modification of seeds. But almost all of these innovations were brought to us by large companies. To say that Monsanto, John Deere, and Dow Chemical are large and well-established firms is an understatement.
This is different. Companies at the event ranged in size from miniscule to small, with few of them having any kind of track record. And instead of the traveling road show through small town diners that funded the ethanol industry, these entrepreneurs were looking for funding from well-established and one assumes gimlet-eyed venture capital firms — investors who know their way around Silicon Valley and MIT. This marriage, or at least flirtation, between agriculture and startups is something very new, and it’s exciting to a corn farmer from Tarkio, Missouri, population 1500.
Companies at the investment show could coat your cocoa or citrus with something, I’m not sure what, that will protect the fruit from bugs. We learned about seed inoculants, drone technology, and a process by which tobacco plants produce squalene, which is normally sourced from sharks. Growing tobacco seems much safer than catching sharks, who presumably don’t give up their squalene without a fight, and environmentally more desirable as well. One firm promised that it can produce proteins and oils from CO2 and microbes, which, as a soybean producer, causes me to have mixed emotions. One entrepreneur, with whom I had a spirited conversation over a beer, is farming crickets. A great protein source, he tells me, although he didn’t offer a sample, and I didn’t ask. I did, however, a couple of weeks later, find a brownie shared with me by a guy using chicory to replace wheat for gluten-sensitive customers. I can report that it tasted fine, even after spending a fortnight in my pocket.
For years, venture capital investment in agriculture averaged around a half million dollars per year. Only in 2014 did the total investment in agriculture venture capital exceed the investment budget of Monsanto. In 2015, investments from VC firms in the agriculture field totalled 4.6 billion dollars. That’s a breathtaking increase, and it will be interesting to see if declines in farm prices and profitability will slow the flow of investment capital into agriculture technology startups. Many of the companies entering the field are developing technologies that increase the efficiency of farmers, so it may be that financial pressures in farm country will increase the demand for these technologies.
One thing is for sure. Agriculture must innove. All of us will benefit if a few of the dreams on display at last September’s event come true. Ceres, the Roman goddess of agriculture, stands high atop the Missouri State Capitol in Jefferson City, Missouri. One company at this event promised to destroy pigweeds by honing in on their genetic code. There is, as I only dimly understand, some problem with the delivery mechanism, but know this for sure: if a company figures out how to target Palmer amaranth and waterhemp, two particularly noxious kinds of pigweed, Missourians will replace Ceres on our capital with that company’s logo.