How Data is Reshaping Agricultural Markets

When Matt Bennett, a seventh-generation grain farmer based in Shelby County, Ill., plants his crops in the spring, he can download data from his tractor to precisely track the type of hybrids he’s sown in his fields, where they’re located and how far apart they are spaced, tailored to the soil type. 

As the crops grow, he uses weather apps to measure rainfall without having to drive to the fields and measure moisture. He layers thermal imaging maps with yield maps to fine-tune what production might look like in the growing season. After harvest he will update his yield maps and overlay those with fertilizer maps. Working with his seed dealer, they can decide for the following year what to plant, where to plant it and the best type of seed to use. 

“These tools have helped us to maximize efficiency,” Bennett says.

Not only is that data useful for Bennett to grow crops now, in the future he might be able to use that data as another valuable commodity. As technology advances and the ability to collect and store data grows, commodity production has become more granular. 

Technology has allowed farmers, traders and end users to get market intelligence in a digital fashion to make smarter, more efficient decisions tailored to the supply and demand of the market. The industry can use data to verify where crops were grown and if they’ve adhered to certain growing practices with specific attributes, which may allow them to command a premium.

Rising demand for organic and identity-preserved crops inspired Kellee James, founder and CEO of Mercaris, now Argus AgriMarkets Organic, to create a market information service for these niche crops. Prices for crops such as organic corn or non-genetically modified soybeans don’t always follow the larger pricing trends in the commodities markets. 

The divergent pricing trend represented risk for the industry. “We saw a gap in the marketplace,” she says, and thought at the time, “let's get in there and help people along the whole supply chain to understand those markets, supply, demand and prices.”

Working with producers, merchandisers and others in the physical commodity industry, a dozen years ago she created an online dashboard of news, insight and data, plus prices and trends dedicated to those in the identity-preserved sector to help them make more informed decisions.

Jeff Schreiner, SVP of Global Collaboration at Cultura Technologies, a growing global collaborative of Agri-Food focused technology businesses, says the ability to collect more data and network that information together means data can enhance the value of a commodity and may become a product itself.

For example, he says, traceability has always been important to agriculture, and with new technologies that allow geolocating of products, this enables end users to follow not only where a commodity came from, but how it was treated along the way. Rather than being reactive, this allows producers to be proactive to prevent issues downstream that can be valuable to consumers, especially in the organic or sustainable industries.

“If our industry comes together to link production and the values that the consumer really wants with the value chain – and be able to prove it – that's a completely new, proactive marketplace that doesn't exist today,” he says.

Another example is the rising interest in how to value carbon. Farmers who raise crops for biofuels, and can measure the carbon intensity of how they treat and grow the crops, can not only sell their crops to an ethanol plant, but potentially receive additional financial value for their methods, Schreiner says.