Commodity prices are low and most growers have shyed away from making precision ag investments. Dr. Robert Hill, Caledonia Solutions says, "Growers with cash find now is the time to be a contrarian and invest in ag technology that will reduce costs, boost yields and add to profitability." Hill references proprietary data available to subscribers only from his recently completed 300-grower study that indicates many top farmers are following just that strategy. His advice to AgTech investors is encapsulated in the following five points:
1. Growers have objectives for engaging with new farm technologies, and these differ by specific technology and practice. Investors need to understand what the specific objective is for the technology they are designing or selling if they want to be successful with their product.
2. Some technologies today are naturally grouped together by growers. Investors might have opportunities to leverage their offering by cooperating with other technology vendors if they understand how growers are viewing their group.
3. Today's market for farm technologies is very dynamic with opportunities in both data collection and analysis. Some technology practices are beginning to slow in their adoption as they reach near-saturation in usage. Others will expand usage aggressively in the near future. Forecast sales and allocate resources using up-to-date and accurate information on these dynamics.
4. Technologies in early adoption phases among growers have had varied quality of performance. Some have mainly exceeded expectations. While others have mainly fallen short. Know what mistakes other vendors and start-ups have made and prepare your company to avoid those same mistakes.
5. If investors target the wrong growers they could be in for a long wait on returns. Know the characteristics of the high-adopters and approach the market armed with this key information.