Maybe Monsanto Is Not All Bad
Biotech firm's acquisition of Climate Corporation will help farmers plan for severe weather
By Marc Gunther
David Friedberg, CEO of The Climate Corporation, expected pushback when he decided to sell his San Francisco-based big data company to Monsanto. He was surprised, though, when some of the loudest criticism came from his own father.
Photo by Bill Meier, on Flickr
Lionel Friedberg – a Los Angeles filmmaker whose 1989 documentary, Crisis in the Atmosphere, was one of the first films to highlight the problem of global warming – reacted to the news by berating his son. “Monsanto? The most evil company in the world?” Friedberg recalled his father saying. “I thought you were trying to make the world a better place!”
As Friedberg the younger wrote in an email to Climate Corp employees after the 2013 sale, being chastised by his own dad “was really hard”. But he’s nothing if not a believer in facts, and so he marshaled enough evidence to persuade his father that the $930m sale to Monsanto was not just good for his business, but good for the planet. His email is worth reading, particularly if, like Friedberg’s dad, you’re a critic of Monsanto.
Now Friedberg and his colleagues need to persuade the world’s farmers that Climate Corp will help them save money, improve yields, adapt to climate change and improve the environment. And if the company manages to turn around a few more Monsanto critics, that would be a bonus.
Sustainability through precision
Founded in 2006, Climate Corp is a leading player in the fast-growing business of precision agriculture. Using a data-driven approach, it seeks the most efficient use of fertilizer, seed, pesticides, land and water. It’s the next big idea in farming, Friedberg claimed when we met at his office in San Francisco. He compared the approach to the industrialization of agriculture, the green revolution and modern plant breeding.
“We have these quantum leaps,” Friedberg said. “This one is going to be driven by the digitization of agriculture. We’re able to more accurately monitor, through digital technology, what’s going on in the field. Then we’re able to accurately execute and optimize decisions, applications and investments.”
“Technology is how we solve all the great problems that we have to tackle, since the dawn of civilization,” he added.
Friedberg’s faith in technology is hardly surprising. A former Google executive with a degree in astrophysics from the University of California at Berkeley, the 34-year-old presides over roughly 700 employees, most of whom are software engineers and data scientists.
He is also a lifelong environmentalist. He started an environmental club in high school, bought a Prius when hybrid cars were a novelty, and he doesn’t eat meat, which makes him the odd man out when visiting with farmers in the corn belt. “I’m usually eating salad and bread,” he said.
Many environmentalists are excited by precision agriculture, largely because of its potential to reduce fertilizer use. Nitrogen fertilizer not soaked up by crops emits a powerful greenhouse gas, while runoff from excess fertilizer causes toxic algae blooms that can contaminate drinking water and create dead zones in the ocean, according to the Environmental Defense Fund.
For farmers, wasted fertilizer also translates into wasted money. “There’s a ton of inefficiency, and that inefficiency doesn’t deliver productivity,” said Rebecca Shaw, a senior scientist at Environmental Defense Fund.
It’s no wonder that the field of precision agriculture is booming. Tractor maker Deere & Company, seed developer DuPont Pioneer and Iowa-based United Suppliers all offer hardware and software products to help farmers use resources more efficiently. In the meantime, brands and retailers – including Walmart, Unilever and General Mills, all of which have set sustainability targets around carbon emissions and fertilizer use – are pressuring farmers to better manage their inputs.
Probability and agriculture
Climate Corp didn’t start off with a focus on farming. The company sold weather insurance that protected businesses – including golf courses, ski resorts and professional baseball teams – against financial losses caused by extreme weather. It soon found, however, that farmers made up its biggest group of customers.
“We had citrus growers in [California’s] Central Valley who wanted to protect against a freeze event,” Friedberg said. “We dealt with some corn farmers early on who had not enough rain. We even had some hog farmers whose hogs wouldn’t breed when the temperature got too high. We decided that we needed to be more focused on a market that could grow.”
Subsequently, the company gathered vast quantities of agronomic data – hyperlocal weather reports, soil quality analyses, elevation measurements, ideal planting dates and yield information – from sources including the US Department of Agriculture, the National Oceanic and Atmospheric Administration, and the US Geological Survey. It also gathered feedback from its farmer customers.
“We start to integrate the environmental data, the agronomic data and the operating data – what the farmer did and when,” Friedberg said. “It’s really about discovering, what does all the data tell us about the future? The more data we get, the better we understand those relationships.”
The company offers an array of products and services, including precision planting equipment and a free phone app called Climate Basic, which gives farmers weather, soil and crop data at the field level. Climate Basic has been downloaded by farmers managing about 24m hectares (60m acres) of land, which amounts to about 7% of all US farmland.
A more sophisticated product called Climate Pro offers advice on crop health and nitrogen use. “It’s us using the data we have about your [farming] operation to make recommendations back to you,” Friedberg said. Climate Pro had been licensed for $15 per acre, but it’s now priced at $3 per acre to encourage trial users.
The Climate Pro sales pitch is simple: the cost of the software will be repaid in the form of savings on the cost of fertilizer. Local agronomists and retailers have advised farmers for years to apply more nitrogen to drive up yields, and some corn farmers spend as much as $200 per acre on fertilizer. But farmers are “wasting as much as half of that money, and destroying the environment”, according to Friedberg.
Changing entrenched habits
Will Climate Corp win over farmers? It won’t be easy. About one third of farmers are older than 65, and only about 16% are younger than 45, according toAgricultural Economic Insights. Farmers also are relative latecomers to the internet, which became easily accessible in rural areas only with the advent of smartphones and high-speed 3G networks. And, of course, there’s the competition.
Brian Scott, who grows corn and soy on a 850-hectare farm (2,100 acres) in Iowa, is an early adopter of technology – he has an iPad in the cab of his tractor – but he hasn’t tried Climate Corp’s software yet because he’s satisfied with his new tractor from John Deere. It cost $300,000 but, he said, it’s helped him become much more efficient. “On seed, you’re definitely using less,” he said. “On fertilizer, you are using it more efficiently.”
United Suppliers, a network of more than 700 agricultural retailers in 20 states, has a program called Sustain to help farmers better manage their inputs. Matt Carstens, vice president of United Suppliers, said his company “not only provides products, tools and technologies for nitrogen management, but also for conservation practices, and will eventually include education on green fertilizers when they become available”.
All of these are offerings are relatively new. But as Friedberg puts it: “The delta between a human being’s intuition and the software tool’s analytical capabilities is quite significant.”
It’s safe to say that farmers will rely more on data and less on gut instinct in the years ahead.