Thursday, February 23, 2017

Transforming a Company for a New Kind of Agriculture (WillAg closing market report w/Robb Fraley))

Last week there was an interesting interview on the closing market report with Robb Fraley, Chief Technology Officer at Monsanto. The discussion related to possible future spending on R&D related to the potential merger with Bayer. Some interesting comparisons were made between R&D spending by Monsanto vs other research intensive industries like Samsung and Apple and pharma.  The takeaway is that the combined company would have more resources to invest, and based on what is spent on R&D in other sectors there is a lot of untapped opportunity here that the combined companies could take advantage of.

I would love to know how much is spent on regulatory compliance given the extreme overkill in this area related to biotech making transgenic varieties cost as much as 20X more to develop vs conventional technologies. I'd like to know direct costs and indirect compliance costs in terms of lost revenue due to delays in approvals etc. One would wonder how much better these companies could serve the industry if those resources could be re-allocated to more productive R&D?

But to me the interesting question related to what kind of people are they looking to hire going forward? The answer included people working in or studying data science, engineers, mathematicians, statisticians. This is not a surprise to anyone following the industry, but its indicative of the kind of company that Monsanto has transformed and is transforming into. The phrase that stuck with me most was "breeding gene by gene and farming plant by plant".

The future direction, merger or not, is the integration of agronomy, bioechemistry, molecular biology, and data science to develop new products, solutions, and services that serve producers, consumers, and the planet as a whole. This is what I have written about before in terms of the convergence of big ag, genomics, and big data.

And this means more choices and opportunities going forward:

"the disruptions of new technology, big data and genomics (applications like FieldScripts, ACRES, MyJohnDeere or the new concept Kinze planters that switch hybrids on the go etc.) will require the market to continue to offer a range of choices in seeds and genetics to tailor to each producer's circumstances of time and place. There are numerous margins that growers look at when optimizing their seed choices and it will require a number of firms and seed choices to meet these needs as the industry's focus moves from the farm and field level to the data gathered by the row foot with each pass over the field." - From Big Data + Genomics ≠ Your Grandparent's Monoculture


Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003 

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