How can ag tech help the livestock industry after the events of 2020?
There is no question 2020 will go down in the history books as one of the most challenging years for agriculture. It also highlighted a number of issues facing the livestock industry. During a Precision Livestock Farming session at the virtual Animal AgTech Innovation Summit, industry experts look back on the year and discuss the future of on-farm systems and solutions in livestock and dairy.
Moderated by Aidan Connolly, CEO of Cainthus, three panelists address how these products and solutions can be utilized and made accessible to farmers. How can we use audio and visual technology, mechanization, robotics, and automation on the farm to benefit both farmers and animals? How do automation and connectivity interact throughout the supply chain to create a stronger industry? How best do we communicate the advantages to farmers and consumers?
AC: What effects have you seen from COVID-19?
“This past year has been a huge challenge for many of us,” says John Kirkpatrick, agricultural manager poultry, eggs & feed, Tesco, UK. “We work with many suppliers globally, and I've been really impressed with how our suppliers have responded to the challenges that COVID-19 has brought to our business.”
“One thing I have learned throughout COVID-19 goes back to an old adage by Charles Darwin. ‘It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.’ That’s exactly what is happening now. Businesses that are very fast in adapting are the ones who are doing better during this pandemic,” says Henry Berger, global head of marketing & strategy – animal diagnostics & monitoring, Boehringer Ingelheim, USA.
Without a doubt, resiliency has been a key driver for many during these challenging times. It can also lead to interesting innovations as companies adjust how they do business.
“Throughout history, some of the most interesting innovations are a result of our greatest challenges,” says SriRaj Kantamneni, managing director digital insights, Cargill, USA. “We know it’s more difficult to be on the farm. We know it’s more difficult to interact with customers. We’ve got to come up with new and unique ways to do that. For entrepreneurs and start-ups who want to make an impact, this is going to be the opportunity in all of this.”
Yet, he believes start-ups are going to face the same challenges large companies face in engaging the farmer.
“You’ve got to do that virtually today. If you can implement new solutions remotely or without physically needing to be present, I think that’s an advantage,” Kantamneni says. “If you’re working on technologies that alleviate the labor challenges and the pressures that are on farms and customers today, those are the companies that are going to win in the short term. If you can do things without always needing to be there, that’s a game changer. Longer term, trends like robotics, insights, and analytics that are built off of those systems are going to be compelling.”
AC: We’ve recently seen a huge amount of money invested in livestock technology. Can you give us a sense of what COVID-19 is doing to help sort out the technologies that are going to win from those who are going to lose?
“Before COVID-19, we were aware of the African swine fever (ASF) crisis in China. Based on ASF, the pandemic produced two things. First, it accelerated the use of digital platforms at the farm level. Second, it also increased awareness and the need to improve and enhance prevention,” Berger says.
A need for better biosecurity measures was also revealed.
“Engagement is a key word here. Why do we need to have so many visits on a farm? As long as we can capture data, we can get the information from the animal’s behavioral components and translate it into meaningful action,” Berger says. “It makes no sense to keep having human interaction from a biosecurity standpoint as long as we can do that through technologies.”
“The challenge we face as an industry, not just as a retail business, is how do we reassure our customers that our farming supply base and our suppliers are doing the right thing?” Kirkpatrick says. “In the UK, we have seen considerable acceleration of what we call remote audits. Alongside that, we’ve got outcome measure reporting by our suppliers on a farm level, which comes through quite a laborious task of actually being reported on a monthly basis. There are huge opportunities to embrace sensor technology on a farm level to streamline reporting and move the conversation forward more quickly to actually utilize the resources we’ve got more efficiently than we do right now.”
AC: We see a lot of start-ups failing, particularly in the livestock area. Do you have any sense of why that is and what a start-up can do to better respond to farmer needs?
“It’s a very challenging sector and margins are quite thin. The technology has to be very cost-efficient to deploy because farmers are very cost conscious,” Kirkpatrick says. “The livestock industry is also a very traditional sector. While the poultry and swine sectors are more open to investing in new technologies, we see a slower uptick in other areas of the industry.”
Although he notes that it is improving, there is also more cost pressure now than ever before.
“We have a very competitive retail market here in the UK, and I would be hopeful that farmers see the benefit and utilize those tools to their advantage to become more efficient in order to produce a sustainable product going forward,” Kirkpatrick says.
AC: How do we get more deals in the livestock space?
“I think it’s a combination of a couple things. We’ve seen a lot of start-ups get off the ground but when they get to the scaling phase, they don’t get the adoption and insights they need to build the algorithms and the models they need,” Kantamneni says. “On the other end of the spectrum, we see start-ups investing more in other areas like crops that are the lower hanging fruit. I think it’s coming to livestock and dairy. COVID is definitely going to accelerate what we see over the next six, 12, and 18 months, but it has a lot to do with how entrepreneurs view the investment opportunity.”
AC: Are we moving toward a more holistic view of data, and technology, or do you think the future lies in systems focused on a specific area?
“It’s a combination. I think we’re headed toward platforms, but, at least, initially if you don’t solve a unique problem, getting to adoption again will be a challenge,” Kantamneni says. “Let’s use sensors as an example. Let’s say in the swine industry, we want to know the perfect day to send animals to slaughter to manage takeaway. That in and of itself is a very unique job to be done, and it solves a really critical problem on farm. If you connect that with all the other data that’s coming off the farm, that becomes a really valuable proposition. There are also a lot of solutions on farm, so there is also a convergence of all of these automation systems, but we’re not there today.
AC: What are the biggest pain points for farmer adoption, and how does a start-up partner with the large players successfully?
“One of the biggest pain points we see from a very tactical perspective is connectivity at barn level,” Berger says. “Number two is the lack of capacity of everybody involved with technology to provide return on investment – the economics behind the adoption of a given technology. As mentioned before, there are very thin margins in this sector. Anytime we bring new technologies, we need to prove the economics behind the worth of implementation.”
As far as how to approach a large corporation, he says there are a number of ways to do this.
“First, the start-up needs to clearly define the issue it is solving in its pitch,” Berger says. “Second, start-ups that are part of an open innovation ecosystem make it much easier for us to see from the holistic perspective so we can see the whole story. Number three is having a very good understanding of the market that we operate in. Unfortunately, I have seen so many pitches where a start-up has no clue about our market. While everything about the innovation was appealing, we could clearly see they didn’t understand our market. We need to speak the same language.”
“If a start-up understands what its core capability is and what it’s looking for in a large corporation, that partnership can be really, really valuable,” Kantamneni says. “As we evaluate start-ups, if you approach us and say, ‘We would really like access to Cargill’s market or customers and here’s what we’ve run into.’ That type of approach, to us, is wonderful. Whereas, if the start-up wants to build out its own commercial organization and take everything to market themselves, then I would take a step back and question what it is looking for from the strategic standpoint. It’s about understanding the partnership protocol.”
AC: When you look at start-ups, which ones do you like and where would you like to see more start-ups?
“I like companies that have a very clear, unique value proposition. I don’t like start-ups that are trying to solve everything,” Berger says. “I also like start-ups that are open to being plugged into a bigger innovation ecosystem. In addition, I like the ones that are not self-centered. They understand that they bring resources to the table, but they are also willing and open to have other resources from large corporations.
“Finally, I don’t like companies that don’t understand the concept of a strategic partnership. For example, a start-up, by nature, is much more agile than we are, and we don’t move at the same pace. Yet, this is not a problem. It just means a large corporation has processes and best practices that it brings to the table.”
“You also have to extend that to what it means in terms of implementation. Ultimately, the producer has to benefit,” Kantamneni says. “There is value that needs to be created for the producer in terms of efficiency and productivity. Labor continues to be the largest challenge on farm today. COVID has only exacerbated that problem. If a technology can either remove a repetitive task or eliminate manual paperwork, those are great places to start.”
AC: Cargill invests in lots of different things. Are you willing to give an inclination as to where your money might go next or what you’d be interested in seeing?
“If you think about the value pools across livestock, pork is at the top of the list,” Kantamneni says. “Dairy has a huge amount of opportunity too, especially in North America because of the economic challenges the industry is facing. In poultry, be it in Brazil or in Asia, there’s an opportunity to automate some of the very manual processes.”
AC: Who in the supply chain can drive better adoption of digital technology at farm level and how?
“It’s quite an interesting question,” Kirkpatrick says. “What we have to keep in mind here is our ultimate customer. So, our customers are at the heart of everything that we do. We’ve got to keep that relentless customer focus. As a business, we have to take the customer with us in some of this discussion. Some of this is very new and very, very scary to customers. We’ve got to take customers on this journey with us. We’ve talked quite a lot today about how we’re going to move agriculture forward, but I think ultimately what we’ve got to think about is the unrelenting customer focus going forward. It’s not about retailers. It’s not about supply chains. It’s about engaging our customer, getting them excited about some of the opportunities and driving this whole conversation forward. Retail and suppliers have also got a key part to play, but we’ve got to inform and inspire our customers to take on some of this role.”
AC: Blockchain is a conversation we hear a lot about. When we look at this technology, it appears as though the people in the middle of the chain have difficulty adopting it. Inevitably, it’s someone at the end of the chain who is expected to drive it through. Is that fair to say? Would you expect to see the same with other technology?
“We look at various technologies on a daily basis and are bombarded by different opportunities,” Kirkpatrick says. “I’m not going to single out blockchain as an example, but I think the key is being able to see those technologies that create value in the eyes of customers – ones we can actually talk very easily to customers about. We deal with a very complex supply chain and as individuals who are responsible for that supply chain, we sometimes don’t recognize that. We must be able to take to the customer a very simple, easily understood message. For us, there is huge opportunity to take some of this technology forward, but we’ve got to think about that customer and take that customer with us on this journey.”
“The whole value chain is still very siloed,” Kantamneni says. “We need to remove the barriers and work together to drive adoption. If everyone along the chain starts talking more and there is a fair share of investment in profits, I think the adoption of technology is going to increase.”
AC: Sustainability is coming up a lot lately when start-ups pitch their innovations. What are your thoughts on this?
“This is a huge area of focus for our business right now,” Kirkpatrick says. “As a retail business, we cannot afford to ignore it. It would be part of any discussion or decision with any start-up very early on to ensure it aligns with our business strategy. For us, that is part and parcel in decision making.”
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