The uncertainty of farming conditions is one of the toughest challenges the produce industry faces.
We sat down with Founder and CEO Ros Harvey of The Yield, to learn how he is tackling this challenge while fulfilling the company’s mission to create a digital playbook using valuable data from farmers to help protect their produce.
Join us as we discuss:
- Establishing digital playbooks to improve growing and supply chain conditions
- Solving uncertainty in farming, like weather
- Developing a sales cycle based on value through data collection
Ready to change the farming business model through analytics? Let’s dig deeper!
Choosing produce over corn or wheat
Ross Harvey founded The Yield, an Australian ag-tech company, so he could leverage data science to provide produce growers with digital playbooks they could use to improve growing operations and supply chains.
Why did Ross focus on produce instead of the big money crops like corn or wheat?
The main reason: It's a $1.5 trillion opportunity globally.
Three other reasons:
- Historically, the producer has been underserved by technology.
- You've got 40 times the gross margin per acre in fresh produce than you do in row cropping and commodity crops.
- In fresh produce, the value chain is actually very important, and comes with a lot more integration
#3 is key. The Yield's product solves on-farm challenges and links on-farm production with the value chain, which means having tighter integration matters. Produce growers are not just contract growing. They are also packing, processing, and market shipping.
That kind of integration makes it much easier to work with them to solve problems that create multiple value points along the value chain (we'll come back to this point later).
Digital playbooks improve growing and supply chain operations for farmers
The fundamental problem Ross solves is the uncertainty created by weather. It is the one variable a grower cannot control.
Ross has created digital playbooks that make recommendations matching genetics with the local environment and weather conditions. They do this using what's called gridded weather, two-dimensional data mapped evenly across a matrix.
Finally doing something about the weather
Mark Twain famously quipped that everyone wants to talk about the weather, but no one does anything about it. Ross is busy proving Twain wrong.
You read that right: He’s actually doing something about the weather.
Solving the problems of apples and wine
Take apples, for instance. When you grow apples, the most important decision you have to make at the very early part of the season is how to get the right fruit set, which means you've got the right number of blossoms on the tree that turn into fruit. In New Zealand, they use two different products they use to help them get the right number of blossoms, and both of them are weather dependent.
The Yield took this protocol and rolled it out across 13 different sites to get the best possible outcome. Farmers said it was the best thinning season they’ve had in 30 years.
In the case of Australia's wine industry, Ross is managing 20% of the vintage, and predicting, 18 months in advance, what that vintage is actually going to produce using his digital playbook. So far, he's 97% accurate.
Selling to the pre and post-farming markets
Two-thirds of The Yield's annual recurring revenue doesn't come from growers. It comes from the pre-farm gate, or post-farm gate — marketers who want to know what's coming to get better value from what the grower is producing.
Look at it this way:
Large family enterprises are growing 30-50% of production. They'll have a core contracting group where there's quite a stable relationship, and then they'll have spot marketing.
So, they're actually trying to manage a portfolio of growing assets to give them flexibility, and then they are geographically distributed for the same reason or this weather risk. They are buyers.
But so are the people creating genetics for a particular variety of crops. They have a very strong interest in the grower achieving the best possible outcome. Other buyers include people who are developing bio solutions that are very weather dependent.
The value of data and ongoing collection
People say data is the new oil. That's not true. You use oil once, and it's gone. No matter how many times you use data, it never spoils. In fact, the more models you run, the more value you create.
The issue is that most regulatory frameworks were designed to protect individuals, not to advance the corporate good. As a result, The Yield has put agreements in place with some of its large corporate consumers that allow them to use their data and create better models for everyone.
"I'm really excited about this," Ross told us. "People are told, 'Oh, you own your data.' But what people don't understand is that you might only own input data."
Once your data has been combined or transformed into something else, if you don't have rights that carry all the way through to the value created there, you don't own very much. You just own a series of zeros and ones.
If we can optimize all along the value chain, we can reduce waste, stop the buffering, and make sure that we're giving feedback from what's happening in real-time to adjust the playbook, then… we can get exactly what's needed by the market.
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