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We’re digging into the archives to bring you a replay of our most popular episode ever — a conversion with Dan Cosgrove, CEO of Growers Edge, a fintech and data solutions company serving ag retailers and input manufacturers.

Data-driven partnerships are emerging among farmers, ag retailers, dealers and manufacturers to validate pre-, post- and in-field economic decisions. Growers Edge primarily works with ag retailers to develop a warranty around their products to guarantee certain yields to farmers if they adopt their products.

In this replay of a Precision Farming Dealer podcast episode from July 2020, we share excerpts from executive editor Julia Gerlach’s conversation with Dan, who discusses some of the shifts in prescriptive farming practices and the importance of validating results to ensure payback for farmers.

Full Transcript

Michaela:
Welcome to the latest episode of the Precision Farming Dealer Podcast. I'm Michaela Faulkner, technology editor at Precision Farming Dealer. New episodes of this series are available wherever you get your podcasts. Be sure to subscribe, to get an alert when upcoming episodes are released.

Michaela:
Today, we're digging into the archives to bring you a replay of our most popular episode ever, a conversation with Dan Cosgrove, CEO of Growers Edge, a FinTech and data solutions companies serving ag retailers and input manufacturers. Data driven partnerships are emerging among farmers, ag retailers, dealers, and manufacturers to validate pre, post and infield economic decisions. Growers Edge primarily works with ag retailers to develop a warranty around their products to guarantee certain yields to farmers if they adopt their products. In this replay from July 2020, we share excerpts from Executive Editor Julia Gerlach's conversation with Dan who discusses some of the shifts in prescriptive farming practices, and the importance of validating results to ensure payback for farmers.

Julia:
So today, I'm here with Dan Cosgrove. He is the CEO of Growers Edge. You're based in Johnston, Iowa.

Dan:
Thanks for having me on today.

Julia:
You're welcome. Thanks for joining. Dan, I know you have a really diverse, interesting background. Why don't you just share a little bit about what that is, and how you got to be where you are?

Dan:
Sure. I started at a law firm in Des Moines, Iowa, several years ago, and I was a partner there. I had the opportunity, right about the time when DuPont bought Pioneer Hybrid, to go in house at Pioneer. I did that, and was a lawyer in house at Pioneer for a number of years, eventually becoming [inaudible 00:01:51] of business development, which there included M&A, venture investment, licensing, collaborations, really anything that required an agreement. I kind got the bug to work in the entrepreneurial space and went back to business school, got my MBA, and when I got back, had the opportunity to leave Corteva, now at the time, and joined Growers Edge, which is really close to Pioneer as well. So, did not require at all a move. It was really easy for me, and I've been really pleased with how that's played out.

Julia:
Nice. Okay. So tell us some more about Growers Edge. I understand it's an ag FinTech company. It's kind of a new kind of animal. Can you explain what that is, and maybe give us some examples of other industry companies that we might be able to relate to?

Dan:
Sure. Well, FinTech is hitting all parts of our lives today. I mean, you see a lot of new technologies or disciplines around phones, and credit cards, and checking accounts, and really quick mortgages, but for whatever reason, the FinTech discipline really made their way into agriculture. What we are doing at Growers Edge is we're taking a lot of the data analytics, and the tools and techniques that are commonplace in other parts of the FinTech world, and applying those in agriculture. Our first product, and we work primarily with ag retail to develop a warranty around their products. If they follow the steps that we agree with them for their sales program, we're able to guarantee the farmer that a yield level will be at attained. If they attain that yield level, great. If they don't, then we pay them a warranty or a guaranteed payment.

Julia:
On your website, you talk about Growers Edge provides critical data to help farmers become more organized, make informed decisions and earn more money. You're doing that by kind of hooking them up with new ag tech companies, right?

Dan:
That's correct.

Julia:
Okay.

Dan:
It's no shock to probably any of your listeners that a lot of economic troubles are found in agriculture today. Bankruptcies are high, profits are down, commodity prices are low for a variety of reasons, and ag economy is really suffering. A concern that I would have is if I were in that situation, I would have a tendency to reduce my input costs. Buy cheaper seed, buy generic chemistry. What we are fearful of is that will put the farmer in a downward spiral. They spend less on inputs, they might get less output, and then have even less to spend the following year. What we're trying to do is provide an economic incentive for farmers to try some of these new technologies. Quite frankly, a lot of farmers are maybe hesitant to adopt some of these new technologies because they're not sure they're going to work. They would more likely adopt those technologies if they came with some sort of guarantee, and that's what we provide.

Julia:
It sounds a little bit like some sort of insurance.

Dan:
Yeah. It's not an insurance. We certainly don't want to get into that space. It's a highly regulated area, same with banking. We may talk about our lending efforts down the road, but we'd like to play between those two spaces. Think of it a lot like either a warranty that you might get for your cell phone or your car, or even an extended warranty you might get at an electronic store when you buy a new TV. These are just new ways to capture the data associated with how often things break and how often you drop them in the snow, and then quantify that and allow for a warranty payment to be made if any of those things happen.

Julia:
Okay. So when a farmer is working with you on a prescription, do they have to work with certain partners or products? How is compliance with the prescription monitored?

Dan:
We work primarily in a business to business type of environment. One of our clients, for example, is GROWMARK, which is a very large, great, highly successful retailer in the Midwest. We worked with them, came up with a warranty or a guarantee, and it has in that warranty, a series of steps that need to be followed. If you follow those steps, which include buying GROWMARK products, then you are guaranteed that yield. Right now, most of our products are very specific to either an ag retail partner, or an input manufacturer that we've worked with, number one, to promote the sale of their products, but number two, we use a lot of their data to develop the analytics around what the price of that product is.

Julia:
Okay. I see. The farmer isn't necessarily going to be working directly with you guys.

Dan:
Generally, that's right.

Julia:
Okay.

Dan:
Now we have on our roadmap downstream somewhere, opportunities to work with farmers more directly, but right now, because our relationships with the ag retail and input manufacturers is still growing, there's a lot of opportunity to bring this product to market through their channel. That's really beneficial to us as a startup because for us to build a sales staff and get in front of all the farmers and growers that are out there for any of our partners is difficult. It's certainly a lot easier if we can deputize their sales network to help.

Julia:
Okay. When you talk about those prescriptions, how wide ranging are they? Do they include practices like no-till and cover crops, or is it really more product based?

Dan:
Well, right now they're primarily product based, and that's a result of the types of customers that we have. Again, we work with ag retail. We work with input manufacturers. When they want us to write a warranty or a product guarantee, we're guaranteeing their products, which is their seed, their chemistry, their digital tools. Going forward, we're open and always looking, in fact have active conversations with several folks, looking at things like soil health, carbon removal, or transition to organic crops. Those are all exciting ways that we can bring our products to there as well, all around the same model of providing the farmer an economic incentive to try something a little different.

Julia:
Okay. What if the farmer then sort of uses your prescription, but also supplements with other things? Does that negate the prescription at all?

Dan:
Yeah. We spend a lot of time writing the prescriptions.

Julia:
Okay.

Dan:
We have to take into account a number of things. Number one, most importantly, we have to meet the needs of our ag retail partner that's promoting seed or chemistry or digital tools. We also have to make that prescription relatively simple to follow. If it's too complex, farmers and growers just won't want to adopt the practices. But finally, your point is right there as well as it needs to be fairly easy to comply with and check. A lot of the steps that we design are designed primarily to be very easy. For example, if one of the steps is you have to buy seed from company X, we go to company X and check. Normally, company X is the company that we're working with to design the product around. So again, we take all those into account when we're writing those warranty documents.

Julia:
Okay, great. How many acres are you guys working on right now?

Dan:
Yeah. We have a number of smaller partners, and probably three, what I would consider major partners. By major, I mean, they're likely in either the top 10 of the CropLife 100 list, or they're a major input manufacturer, and there's only a few of those folks left. We have three of those larger groups. We really hope to be on... I have to be a little careful in disclosing the number acres because each of those relationships is somewhat confidential, but we should be on well over a million acres by the end of this year.

Julia:
Interesting. How long has Growers Edge been in business? Can you give any examples of what types of prescription success there has been?

Dan:
So we've been in business and were founded back in 2017.

Julia:
Okay.

Dan:
The first year we were actually primarily a crop insurance company. Now however, we've moved to the warranty structure that we've described, and have had pretty good results with that. Again, we're continuing to add new customers or clients to that list all the time. The one that has been announced is GROWMARK, which is again, a very large successful company here in the Midwest, as well as at least one input manufacturer that we're excited about. As we get on more and more acres, we're hopeful that we can draw additional data around what we're seeing. But from the grower's perspective, we've seen very good increases in yield because they've been able to try some of these products that are now protected or guaranteed, and they've seen the resulting yield benefit. Of course, if they have, they get to keep all of that, and if they haven't, then they get a check from us.

Dan:
On the other side, on the ag retail side, what we've also seen from them is they see a lot more engagement with their customer. They are viewed as maybe a leader on the tech side, and quite frankly, they're promoting sales of their products that are other newer products with better margins for ag retail as well. Hopefully, what we end up seeing is an ag retail network that succeeds by positioning their products in the best way possible, and then a bunch of farmers and growers that seek great results from all these new technologies, but sell the product.

Speaker 4:
Wanted to publicly recognize here for the first time, our 2019, Most Valuable Dealership winner, Crystal Valley Cooperative. I would like to publicly present you for the first time with the 2020 Most Valuable Dealership award.

Speaker 5:
I'd like to publicly recognize for the first time, the 2022, Most Valuable Dealer, Jenner Precision.

Speaker 6:
Thank you.

Michaela:
You could be the next dealership we announce as Precision Farming Dealers 2023, Most Valuable Dealership. Now in its 11th year, our annual program recognizes the organization demonstrating the best in sales service and support of Precision Farming technology. Dealers, manufacturers, and others are invited to participate by nominating top Precision Farming dealers from across North America. Go to precisionfarmingdealer.com/mvd to nominate at dealer for our 2023 MVD award, and help us recognize North America's premier Precision Farming operation. Now, let's get back to the conversation.

Julia:
How are you tapping into the farmer's data? Is it through the link with the various platforms that they're using., The field view, the AFS connect, that sort of thing?

Dan:
Today, we really don't use that type of data. We get a lot of publicly available material like weather, which isn't a surprise. We also use the data that I mentioned before, from our ag retail partners. We do get the farmer's historic yields on those fields, and that helps us show what their history was, and then it helps us define what success or failure looks like. Since some farmers have an average yield much higher than others, the result of the product or the warranty has to be higher in those higher fields. As far as data from the farmer, we get actually very little. A lot of it comes from other locations.

Julia:
Oh, okay. Great. In terms of the data that you're collecting, I know you said you're not really collecting it directly from the growers, but are there any privacy concerns, or I don't know. Is the data aggregated in a way that the farmers might be concerned about their identity being revealed or something?

Dan:
Fortunately for us, our data really doesn't require any personally identifiable information.

Julia:
Okay.

Dan:
Weather data is pretty generic, and a lot of the data that we get from our partners, like I mentioned before, the ag retailers, that's data that they themselves have derived or developed over years of testing their own products. While we certainly have algorithms that run in all the data that we acquire, there's no personally identifiable information in that category. Now I will say we do capture some data around our customers, so when someone signs up for a warranty, we do capture their name and address, so we can send them a check if we need to, but that's not data that we use to design any of the analytics that we're associating with the product.

Julia:
Gotcha. I noticed that you have an app on your website, and it has things like soil moisture, and weather, and marketing information. I was just sort of interested to know where all of that data comes from. Are the farmers or the companies installing soil probes or monitors or something?

Dan:
To date, we don't require any of that. Now we do have partners that... So in addition to ag retail, which we can provide warranties around their products, we also are looking for partnerships with technology providers, like the folks that are offering sensors, drones, soil tests, et cetera. All those people make claims. They all say if you use our technology, you'll get bushels an acre, or whatever their claim is. Generally speaking, they have data behind those claims. That's the data that we take in, product warranty around, and today we don't have a specific one we can point to where we require a sensor, but certainly if a sensor company wanted to be part of a prescription, that would be relatively easy to design.

Julia:
Okay. Gotcha. Okay. Can you give some examples of ag tech that farmers are not adopting as quickly as you think would be helpful?

Dan:
Yeah. I mean, certainly across the board are one end of the spectrum, new seed varieties or hybrids that have all these great technologies, new chemistries that promise that they can kill weeds or prevent disease. But even at the other end of the spectrum, the very specific folks that are building sensors that might detect water deficiency or nitrogen deficiency, all of those are potentially able to provide a lot of benefit to growers. But if you're a grower and your margins are really tight, you may not decide to try them. Quite frankly, it's risky out there to try some of those. Most farmers don't have a lot of chances to get it right. I think what someone said, 40 chances to make things work. What we're trying to do is provide just a little bit of a safety net around some of those products so that if they work, great. Farmers get to keep all the upside associated with that, either product, or process or technique. And if they don't work well, at least there's a guarantee or a way for the farmer to try to get back some of what they spent.

Julia:
Okay. You also talk about incentivizing farmers to do regenerative ag. How are you doing that?

Dan:
Well, there's a tremendous amount of really good science behind the benefits of regenerative ag. More and more, I think a lot of the farmers, I'm guessing a lot of your listeners as well, are very accepting of those new techniques to not only help them preserve soil health and be good sustainable farmers, but also have a good ROI, or return on their investment, over the long term. What we're able to do, and continuing to look for good partners to help us do this is provide, again, a little bit of a guarantee or a way to protect themselves if they follow the steps that are set forth. Then they should see the results that they've been promised. If they do, again, fantastic. If they don't, at least there's a little bit of a downside protection for them that allows them to recoup some of the costs that they incurred.

Dan:
There's a lot, again, a lot of really good folks working on developing products for that regenerative ag space, sustainable ag, no-till or low-till type of approaches, and the science is getting better and better every day on that. We're anxious to continue to work with partners in that space. Right now, because most of our partners are larger ag retail and input, that's the bulk of our effort. I do think we all have to keep our eyes focused on that sustainability target and do what we can to help promote those types of really good environmental practices.

Julia:
You mentioned the lending side of things. It sounds like that's not quite there yet? You're not quite getting involved in lending yet?

Dan:
Well, we are just starting down the path of building a lending arm. That's a very complicated process. The operating systems behind creating a lending group, including connections to banks, and payment portals, and the scorecards that [inaudible 00:19:32] loan on is certainly not easy. We hope to have our first loan to farmers later this year. Again, it may be a way, especially if we get to where we want to be by the end of this year, where we can recommend a product or a series of steps or techniques, we can lend the farmer the money to undertake those steps or to buy that product, and then of course, we can guarantee the result. It becomes a very nice way for farmers to maybe go down a path that they've wanted to go down, but haven't been able to try for a number of reasons.

Julia:
Okay, great. So currently, like I mentioned, you have the app on your website, and you do have the marketing info, it looks like, on the app. I didn't download the app, so I didn't go in to see it, but it looked like you had a lot of good information in there. Can you just explain your app a little bit for farmers? I know it's a free app, so there are ways that they can interact with your company, aside from the prescription side of things, right?

Dan:
That's right. For the longest time, probably since the day the company was founded, we've really been focused on trying to create tools for farmers to maximize the profitability. We do have an app out there that allows farmers to check on things that most farmers check on almost daily, things like weather, spot prices. We've got some more things coming in this space too, because we do want to continue to drive traffic and engage our growers. One of the more value added pieces of the app that we offer is where we connect a farmer's location to the grain prices around them. If it makes sense for them to drive five miles east versus 10 miles west, and they get it 10 cent per bushel difference, they should know about it if they sign up and follow our app.

Julia:
Yeah. That's nice. Yeah. I mean, obviously they're going to check the weather, they're going to check the markets, so it's nice to have that sort of in one place. You also have on there, the profitability analyzer. Is that somehow tied in with the prescriptions? I mean, do you have information in there from your partner companies that would help growers sort of see how their profits might change if they use some of these ideas?

Dan:
Because of our roots in crop insurance, we still have a very close connection to a lot of crop insurance and insurance agents from brokers in the Midwest. The profit advisor tool is really a tool that we give those folks under a brand name that we call, Marquee. If your crop insurance advisor has that tool, you can go in and plot a number of scenarios. What if corn was a dollar or higher? What if I got hit with a major disease and wiped out 50% of my field? Something like that. It allows you to model the different scenarios so that you can try to decide with your crop insurance agent or broker, exactly what types of coverage you might have. Now it's possible in that conversation, when we get to this point, that crop advisor or agent might also be able to sell those warranties or prescriptions that we talked about previously. But right now, this is really a standalone relationship that we have with our longtime friends in the crop insurance space, and providing them a tool to help them differentiate themselves as well.

Julia:
I see. Okay, great. Well, I think that covers most of my questions. Is there anything else that you'd like to share?

Dan:
Only to say that we're really excited as we continue to get more and more acres under our, kind of umbrella, that we're able to help farmers and growers come up with ways to try things that might make a lot of sense, but maybe they just need a little downside protection to do that. Bringing these prescriptions, this advice to farmers and growers, and driving their value can only help the industry as a whole. Now we're just excited to be a part of it. We're not the really smart guys that are coming up with drones, or the sensors, or the loose seeds, or chemistry, or microbes you put in the soil, but if there's a claim to be made, if someone wants to guarantee the result, we'd certainly like to talk to them, because that's something that we can provide.

Michaela:
Thanks to Dan Cosgrove and Julia Gerlach for today's conversation. We'll be back in August with brand new episodes of the Precision Farming Dealer podcast. Until then, our library of podcast episodes about Precision Farming sales, service, and products is available 24/7 at precisionfarmingdealer.com/podcasts or wherever you get your podcasts. From all of us here at Precision Farming Dealer, I'm Michaela Faulkner. Thanks for listening.