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Behind-the-scenes trends driving forage

Progressive Forage Editor Lynn Jaynes Published on 03 December 2018
crystal ball, trends in forage industry

There are plenty of hay producers I’ve visited this year who, although they’re concerned with export tariffs, congressional partisanship and immigration wars, are still taking care of individual customers – every day. They still put their boots on and go to work. They still provide the product and service their customers require. Although global chaos may reign, they’re still taking care of business at home.

This is not an article about export tariffs. It’s not an article about subsidy programs or farm bills. It has nothing whatever to do with Washington D.C. or the global forage market. It is a look at some trends in the industry closer to home affecting forage production.

Consolidation

The ramifications of consolidation in ag equipment dealers, seed and chemical companies, and farms impact individual operations – no argument there. But it’s not a new cycle, and it’s not a reason to panic. Anyone over the age of 50 has probably seen at least one full cycle, where an industry (or any segment thereof) explodes and then implodes. Agriculture has been in the implode stage for a few years now as companies become bigger and big farmers buy out smaller farms. How long will this implode stage last? Until the ship gets too big to turn quickly and respond to individual waves of change.

The consolidated ag industry, while still consolidating, seems to have conversely already begun the next explode cycle of niche markets. More producers every day develop on-farm marketing options with internet sales, organic marketing, farm stores, on-farm cheese processing plants and agritourism that connects consumers with growers. And what spurred that niche trend? Companies getting so big they couldn’t respond to individual customers anymore. So while we have consolidation in some aspects of agriculture today, we simultaneously (forage producers included) are also in the beginning phases of the explode stage of the cycle.

Lawsuits and regulations

For better or for worse, lawsuits and regulations impact everyone. This year, the glyphosate lawsuit award, restrictions on dicamba and the Syngenta settlement all have one thing in common as it relates to consolidated companies – deep pockets. How do deep-pocket companies conquer? They divide.

It wasn’t two days after the glyphosate award was announced that TV ads were aired for people to contact lawyers regarding a class action suit. In other words, whether the issue of glyphosate causing cancer is valid or not, fears and deep pockets create opportunity to impact trends. We’ll watch this one play out in years to come.

Then we have the GMO issue (or sometimes referred to as the GE – genetically engineered – issue), coupled with the CRISPR gene editing issue. In forage, this relates to low-lignin technology, as well as the Roundup Ready technology, and who knows where CRISPR will take us (or who will regulate it). CRISPR could bring new varieties to the marketplace much quicker and much more cheaply. We have yet to hear of it being employed in forage, but at least it’s a possibility.

Right to repair

When “rights” collide: When does one entity’s right to create collide with another entity’s right to repair? Does the second entity have a “right” to repair, or is it just a tradition that now feels like an entitlement? While we can all agree people have a right to create secret concoctions in theory, we cannot agree on how far that right extends, or whether the rights to create and the rights to repair are equal.

The stakes are high. If an equipment company’s creative rights ultimately rule (which I suspect the courts will uphold), they will alienate the very market they depend upon for purchases. Farmers will go elsewhere. Farmers will innovate themselves. I’ve already seen farmers hire computer software contractors to create similar “secret concoctions.” You can’t dam up a flood with a legal sandbag. The water (in this case, the farmers) will find their way around it. So while equipment companies may “win” the battle in the short term, they’ll ultimately “lose” the war.

Equipment innovation

One of the highlights of my travels includes seeing some on-farm innovations in equipment. Farmers are just never content, it seems; there’s always a way to take a “shelf” item from the dealership and modify it or make something better. I’ve seen this entrepreneurialism bear fruit in Pennsylvania, Ohio, New York, New Mexico, Idaho, Canada, and that’s only what I have physically seen.

While many good ideas (we could argue “all” good ideas) come from the farmers, both equipment entrepreneurs and big companies have struggled with a common problem: the design phase. When a design is created, it moves to the prototype phase. When the prototype fails (whether based on materials, preference or capacity, or any other number of facets), the design must be readjusted and the prototype rebuilt. It’s expensive and cumbersome.

Large equipment companies now have access to artificial intelligence, allowing them to quickly consider many designs before the prototype phase has to be employed. This will give large companies an edge. And I think large companies (spurred nonetheless by farmer entrepreneurs) will continue to dominate the equipment innovation markets.

Blockchain

Maybe you’ve read a few articles about blockchain by now or seen a presentation, and maybe not. It was a new concept to me. In a nutshell, “blockchain” refers to a “giant ledger in the sky” … or “cloud.” Without getting too techy on you (and without wading into these waters above my chin of understanding), it’s a concept geared to provide traceability to the end consumer and efficiency to the supply chain.

One writer suggests you think of it like an Excel worksheet that’s available for everyone in the supply chain to work on, except it’s encrypted to be “unalterable.” So the farmer can enter data (let’s say we’re talking about a calf), such as birth data, vaccination data, weaning weight, feed supplement, who it’s sold to, etc. Then the feedlot manager enters data – average daily gain, processing and vaccination data, feed source, etc. And then the packer does the same thing, including the grocery store it’s sold to. The data follows the commodity – in this case beef. When the consumer picks up the package of meat at the store, with a smartphone he or she can scan the package code and they have instant information regarding that piece of meat, clear back to its birth.

Now run through a similar scenario in your mind with any feed that was fed to that animal – what corn hybrid made up the silage, what herbicides or pesticides were used on the crop, etc. All that data would be there, as well. If you fed hay to that animal, the hay type, perhaps test values of the hay, where the hay was grown, whether you sprayed for armyworms, etc., would be listed.

Consumers say that’s what they want (although they have yet to convince me that’s really true). But the additional value would be to anyone in the supply chain – a cow-calf producer who wants to see how the genetics performed in the feedlot or how the carcass data came out, for instance, or a corn farmer who wants to see how that corn hybrid performed in milk production. And it could potentially connect buyers and sellers directly – no middleman.

The downside? All that data has to be entered.

Grain Discovery is one such platform. In the same article (referenced above), it states, “Grain Discovery’s platform will give farmers the chance to offer their produce, at a price of the farmer’s choosing, and then secure automated systems can match them with buyers. Settlement can be immediate. Banks wouldn’t necessarily have to be involved due to the security of a blockchain system, although Hanafin says they are working with all the members of the value chain who bring value.”

The prediction

I’ve misled you, because there is no crystal ball to peer into the future, and anyone who has a “prediction” is a fool. But we can watch trends. And I expect trends like consolidation, lawsuits and regulations, right to repair, equipment innovations and blockchain will define the direction of the agriculture story in the near future.

Well, maybe I do have one prediction: Producers will still put their boots on and go to work every day, taking care of business at home.  end mark

Lynn Jaynes
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PHOTO: Illustration by Corey Lewis.

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