Cargill is developing a software service that guides farmers on how to plant crops, a foray that pits the agricultural conglomerate against a host of rivals seeking to harvest reams of data to sell “prescriptive planting” technology in North America.
Cargill began selling the service in two U.S. states this summer and plans a broader push over the next several years as it seeks to help farmers produce larger crops and navigate weather shifts, officials said.
The tool, called NextField DataRx, will compete with data-analysis services from companies including Monsanto Co. and DuPont Co., which seek to apply new number-crunching techniques to the age-old variables of raising crops, including soil content, seed type and temperature fluctuations.
“We’re trying to help farmers maximize their [return on] investment and the output of their farm,” said Steve Becraft, crop-inputs manager for Cargill’s AgHorizons division, which sells farm supplies like seed and pesticides as well as advisory services to farmers in the U.S. and Canada.
Cargill — a buyer of corn, soybeans and other crops that is among the world’s largest grain traders and processors — estimates the new service could help farmers increase the bushels they harvest from each acre of corn by 5% to 10%.
The service will help farmers pick seeds best suited to the nuances of their land, drawing from a database detailing performance of seed companies’ products in various types of soil and environmental conditions. It can gauge how many plants a particular field can support and the pesticides best suited to fend off insects and fungus, Cargill says.
The service evaluates about 250 different variables to tailor farming strategies to swatches of farmland as small as 60 by 60 feet, said Becraft.
Cargill declined to specify how much it charges farmers for the service, which it introduced in Minnesota and South Dakota this year.
Seed companies and independent software firms have bet big on prescriptive-planting technology, with some backers saying the push could be as important as the development of mechanized tractors of the 20th century and the rise of genetically modified seeds in the 1990s.
Biotech seed maker Monsanto last year spent $930 million to buy Climate Corp., a San Francisco-based startup that models weather risks to farms. St. Louis-based Monsanto aims to build the unit into a broader data-services business.
Rival DuPont, based in Wilmington, DE, this year struck an agreement with the University of Missouri and USDA to develop deeper soil-content analyses that DuPont will integrate with its high-tech offerings. DuPont has estimated its data services could generate as much as $500 million a year in revenue over the coming decade.
Cargill, of suburban Minneapolis, represents a formidable new competitor. Its $134.9 billion in fiscal 2014 sales ranked it as the largest U.S. agricultural firm and the country’s largest privately held company. The 149-year-old company has long advised farmers on farming strategies and the best time to sell grain. In 1996, Cargill began sampling soil and experimenting with applying different amounts of fertilizer to various fields, depending on how many nutrients the ground already held, Mr. Becraft said.
NextField DataRx represents a more information-intensive version of Cargill’s advisory service, incorporating historical weather data, satellite imagery and farmers’ own information.
The prospect of handing over years’ worth of details on their farms to big agricultural companies has troubled some farmers. Some groups, such as the American Farm Bureau Federation, have voiced concern that seed companies could steer farmers to particular seeds and sprays, or recommend higher planting rates, to sell more products. Officials for DuPont and Monsanto have said they don’t use farmers’ information to price seeds and that farmers retain ownership of their data.
Still, those perceptions could give Cargill an advantage, according to Mike Boehlje, professor of agricultural economics at Purdue University in West Lafayette, IN — because Cargill’s main business isn’t developing and breeding seeds and other agricultural products. “They may have a better chance shaping those perceptions that they’re independent,” he said.
Cargill’s role as a grain buyer could pose different questions for farmers, including the prospect that Cargill could use crop information gathered by the service to inform its grain-trading operations. So far Cargill is alone among major U.S. grain traders, such as Archer Daniels Midland Co. and Bunge Ltd., in rolling out its own data-analysis service.
Becraft said Cargill hasn’t developed a trading strategy around such data and would seek farmers’ permission if the company wanted to do so in the future.