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Monsanto getting into the weather game
The success of every single crop input -- from the soil to the seed and chemical required to raise the crop -- depends on one overriding variable, one that's been less than friendly to many farmers in the last two years: Mother Nature. An acquisition announced Wednesday morning brings that final dominating variable into Monsanto Company's fold.
Monsanto officials announced Wednesday the company is acquiring The Climate Corporation, a weather forecasting, analytics, and insurance company based in San Francisco, California. Climate Corporation offers software and insurance products through a "proprietary technology platform" that combines "hyper-local weather monitoring, agronomic data modeling, and high-resolution weather simulations" to help farmers better manage weather's effects on their crop output.
"Data science is revolutionizing agriculture, and by combining our capabilities with Monsanto's resources, we are excited to help farmers stabilize and improve their farming operations and ultimately help feed the world," according to a statement from Climate Corporation.
Adds Monsanto CEO Hugh Grant: "The Climate Corporation is focused on unlocking new value for the farm through data science. Everyone benefits when farmers are able to produce more with fewer resources. The Climate Corporation team brings leading expertise that will continue to greatly benefit farmers and their bottom line, and we want to expand upon this tremendous work and broaden their reach to more crops and more world areas."
The deal's price tag, according to a Monsanto report, is $930 million. Company officials say this purchase is expected to expand on The Climate Corporation’s leadership in data science, which represents the agriculture sector’s next major breakthrough, and will immediately expand both the near- and long-term growth opportunities for Monsanto's business and Integrated Farming Systems platform that includes its FieldScripts product.
The Climate Corporation was founded in 2006 by a highly successful team of software engineers and data scientists formerly with Google and other leading Silicon Valley technology companies. Since that time, the company has built the agriculture industry’s most advanced technology platform combining hyper-local weather monitoring, agronomic data modeling, and high-resolution weather simulations to deliver a complete suite of full-season monitoring, analytics, and risk-management products.
The Climate Corporation has a core set of support tools to benefit farmers, company officials say. These include products that help them boost yields on existing farmland and better manage risks that occur throughout a crop season. The Climate Corporation will continue to offer its current risk-management products including an online service that provides crop planning, monitoring, and recommendations, and insurance offerings through its network of independent agents.
The acquisition is subject to customary closing conditions and is expected to close in the first quarter of Monsanto’s 2014 fiscal year.