By Jacob Bunge
Monsanto Co. is broadening its bet on computerized farming services, hoping to attract farmers looking for an edge in boosting crops and managing their land amid a slumping agricultural economy.
The biotech seed giant said it plans to expand its Climate Corp. subsidiary, which delivers weather and planting advice based on computer models, to develop an online network similar to Amazon.com Inc.Monsanto aims to build an online bazaar allowing farmers to shop for services and share data with Monsanto and other companies.
DuPont Co., Cargill Inc. and Deere & Co., are also investing in the business, along with a host of startups.
But U.S. farmers have clamped down on spending after a string of bumper crops have slashed prices for corn, soybeans and wheat. And some farmers have been wary of sharing their intimate business details with some of the sector’s biggest players.
Monsanto so far has focused on recruiting as many farmers as possible to the Climate platform. Farmers representing about 92 million acres of U.S. farmland — nearly as many acres as were planted with corn this year in the U.S. — have signed on. About 14 million of those acres are enrolled in paid services, according to Mike Stern, who earlier this year took over as chief executive of the Climate division. Mr. Stern said 25 million paid acres are estimated in 2017.
Monsanto aims to parlay its base of users into a broader platform for computer-powered farming, a move Mr. Stern said resembles Amazon.com’s evolution from an online bookstore to selling clothing and groceries while building out a separate web services division. He said the move will make Monsanto’s digital agriculture offering more central to farmers’ operations, while opening up an established base of users and technology infrastructure to other farm supply companies developing their own data-powered services.
“Digital agriculture is very fragmented right now,” Mr. Stern said. “The next step is to go ahead and provide a mechanism by which you can help organize this ecosystem.”
The first company to sign on to Monsanto’s effort is Veris Technologies Inc., a Kansas-based company specializing in sensors that measure soil content variations across fields. Farmers using Veris’s soil sensors will be able to funnel that data to Monsanto’s Climate system to better plan fertilizer and seed use, the companies say.
“We’re anticipating this will be a wind at our back,” said Eric Lund, president of Veris, which has been developing its mobile soil-testing equipment since the mid-1990s.
Monsanto is betting that more companies will follow, attracted by the prospect of tapping into the established Climate user base and its technology, avoiding the need to develop their own systems for creating farmer accounts, securely transmitting data, and payments.
Mr. Stern said that Monsanto hasn’t yet determined how much it may charge companies for connecting their services to the Climate platform. Monsanto continues to project hundreds of millions of dollars in sales from its Climate suite of services by the end of the decade, he said.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires 08-17-160115ET Copyright (c) 2016 Dow Jones & Company, Inc.
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