Farms in North and South America, Europe and Australia are facing crop losses as extreme weather spreads over an unusually wide geographic area. Canada is the world’s fourth-largest wheat exporter and the biggest shipper of canola.

Statistics Canada estimated all-wheat production at 29.8 million metric tonnes, the second-lowest in eight years, and down 13 per cent from last year. The estimate was slightly higher than StatCan’s estimate of 29.5 million tonnes in its previous report on Aug. 29.

The new wheat estimate fell short of the average industry expectation of 30.4 million tonnes.

“It does seem that global high-protein wheat is snug for another year,” said Ed Broschinski, lead analyst at MarketSense, Cargill Canada’s grain advisory service.

Broschinski added that U.S. supplies may partly offset Canada’s small wheat crop, with anecdotal reports of better than expected North Dakota spring wheat yields.

StatCan estimated durum production at 4.1 million tonnes, down 30 per cent year over year, and the second-smallest crop of the wheat used to make pasta in 13 years, after the worse 2021 drought. The agency had previously estimated production of 4.3 million tonnes.

StatCan based its estimates on satellite and agroclimatic data as of Aug. 31, one month later than it used for the previous report.

Farmers look to produce 17.4 million tonnes of canola, down seven per cent from last year and their second-smallest crop in nine years. StatCan had previously estimated 17.6 million tonnes.

Canola supplies also look tight if demand is average, Broschinski said.

ICE Canada November canola futures dipped 0.4 per cent, little changed from before the report’s release.

StatsCan left its oat harvest estimate at 2.4 million tonnes, down 53 per cent from last year.

— Rod Nickel is a Reuters correspondent in Winnipeg.

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In a world with a dwindling number of grain producers and a growing population, Deere and its rivals are developing self-driving equipment loaded with the latest software that is harvesting a new kind of bumper crop: data. All that translates into recurring revenue, something companies such as Apple have long enjoyed and industrial manufacturers like Deere hungrily eye.

“The more technology we can develop to allow farmers to get productivity out of their land without having to spend so much money on fertilizer and inputs, the better off everybody is,” Julian Sanchez, Deere’s director of emerging technology, told Reuters.

Investments in automation for high-horsepower equipment is only at its inception for Deere and rivals Agco and CNH Industrial. The next step is to equip machines to plant seeds using satellite imagery and soil data, Sanchez said.

While Deere has not outlined what that could mean to its bottom line, last fall U.S. automaker General Motors said it was targeting up to $25 billion in software-driven services by 2030, and added its Cruise self-driving unit could achieve $50 billion in annual revenue within six years (all figures US$).

The race among farm equipment companies to automate agriculture has accelerated amid a burgeoning food crisis. And Deere’s strategy around scaling its suite of tech products is now in the spotlight, after the manufacturer’s stock plunged 14 per cent on May 20 following a quarterly revenue miss. It was the biggest drop for Deere in 14 years.

The timing comes as the war in Ukraine and widespread drought in key grain-producing countries have roiled commodity markets, causing grain and farm input prices to spike as supplies shrink. That, in turn, has U.S. farmers scrambling to boost crop yields, yet limit their fertilizer and pesticide use.

That and a shrinking farm labor workforce has opened the door for Deere and others to make their high-tech push. For farmers, the prize is higher crop yields. For Illinois-based Deere, it’s the revenue.

Autonomous machinery is where Deere is placing its bet as artificial intelligence becomes more integrated in farming. Its self-driving 8R tillage tractor will be the latest addition to the company’s algorithm-enabled offerings when the green machines go on sale in the fall.

The new tractor will be priced at $500,000. However, the autonomy feature will be sold separately. Deere executives told analysts at a conference that the company will largely maintain its “point-of-sale” model for equipment, but will integrate a software-as-a-service (SaaS) model for its autonomous solutions. That will likely include their self-driving tractor.

“While it may take us a few years to build out a base of recurring revenues, autonomous solutions, on top of our underlying machine forms, will be recurring,” said Joshua Jepsen, Deere’s deputy financial officer.

The recurring revenue model can be economically favorable to heavy machinery manufacturers “based on those data insights,” said Michael Staebe, a Bain and Co. partner focused on machinery.

In Deere’s case, using a subscription model by either selling or leasing its driverless tractor can result in higher margins.

“After expenses, every incremental dollar falls straight to the bottom line,” Edward Jones analyst Matt Arnold said. “We would expect it to be an attractive offering to farmers given the efficiency it offers them, and lucrative to Deere.”

Agronomic data helps bottom line

Farmers have long been wary about how machinery and supplier firms profit off the data gleaned from their operations, and how secure such data is. But with farmers facing economic pressures, Deere and other manufacturers said it is easier to sell farmers on making such investments.

One key reason: The ability to glean crop insights from huge amounts of agronomic data takes the guesswork out of when to plant and how many seeds to use — which saves farmers money.

“Everybody in the industry is much more data-focused than we have ever seen them,” said Michael Boehlje, a professor at Purdue University. “(Companies) can do profit projections by geographic space in fields. That takes you to a different level of thinking and analysis.”

In 2020, Deere acquired Harvest Profit, a farm profitability software company that has been integrated into the John Deere Operations Center. The platform stores and lets farmers access their machine data from the cloud.

“When I look at what precision ag has done for our operations and what we can accomplish in a day’s time compared to 10 to 20 years ago, it’s so much easier,” said Jeremy Jack, a row-crop farmer in Mississippi and chief executive of Silent Shade Planting Co.

Ron Heck’s fleet of Case IH combines and tractors are equipped with automated steering to harvest his 4,000 acres where he rotates soybeans and corn.

The fourth-generation farmer in Iowa said some of his new equipment is loaded with technology. “Unfortunately for us it costs more, but hopefully the costs will be paid back in the long run by better efficiency.”

— Reporting for Reuters by Bianca Flowers and Joseph White.

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Russia is the world’s largest wheat exporter, supplying it mainly to Africa and the Middle East. It competes with the European Union and Ukraine.

The ministry “is currently doing technical work with the regions to refine the form and structure of the operational data on crop harvesting and sowing of winter grains,” it said on Wednesday.

“Once this work is completed, the information will continue to be published on the ministry’s website on a daily basis,” it added.

The latest harvesting data on the ministry’s website is as of Aug. 6. Its analytical centre Specagro last published the data as of Aug. 11, when Russia had harvested 74.9 million tonnes of grain before drying and cleaning.

The ministry last week left its 2021 grain crop forecast unchanged at 127.4 million tonnes, including 81 million tonnes of wheat, the Interfax news agency reported.

Its forecast is higher than those of analysts.

The ministry is in discussions with state statistics service Rosstat over a difference in their estimates of Russia’s 2021 grain sowing area, Interfax reported last week, citing the ministry.

The ministry’s crop forecast takes into account one million hectares which farmers resowed with grain this year, it told Interfax, adding that the ministry and the stats service planned to disclose their consolidated point of view on the issue soon.

Rosstat’s estimate of the pre-harvest winter wheat area was one of the reasons behind a wave downgrades of Russia’s 2021 grain crop in August, along with dry and hot weather.

— Reporting for Reuters by Polina Devitt.

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Telus Agriculture and Rabo AgriFinance, which is headquartered in St. Louis and serves U.S. farm customers, announced Monday they’ve jointly bought software firm Conservis for an undisclosed sum.

Conservis comes to the joint venture already handling farmers’ financial reporting data via the Rabo AgriFinance platform since 2018, along with data from Climate Corp.’s Climate FieldView platform, the John Deere Operations Center and Crop Data Management Systems’ crop chemical database.

The Minneapolis company’s products are meant to allow a farmer to integrate as-applied and yield data directly from those platforms into a “unified view” of the business, with “no extra hardware or manual data re-entry required.”

Thus, “with all your activity records in one spot, you can decide to share reports with landowners, regulators and lenders using data directly from your fields at any point in the season,” Conservis says on its website.

“Understanding your true cost, including cost per bushel and per acre will help ensure you make informed decisions that yield higher profits.”

Calgary-based Telus Agriculture has been shopping for farm management platforms since before Telus created the new ag unit last year, among them Decisive Farming, Farm At Hand, Muddy Boots and Feedlot Health Management Services.

The joint owners said their vision for Conservis is to deliver an “even more robust” platform across a “diverse range of crops and livestock.”

For its part, Telus Ag’s existing tech portfolio is expected to “help enhance the Conservis platform’s functionality” and include access to Telus’ Agricultural Data Exchange (ADX) and Agricultural Services platform (ASX).

The new owners said they “remain committed to Conservis’ strict data privacy standards,” emphasizing farmers on Conservis will still own their data and will still control when partners — Rabobank and Telus Ag included — get that information. — Glacier FarmMedia Network

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The Olds College Smart Farm will lead the Pan-Canadian Smart Farm Network, which will also include Glacier FarmMedia Discovery Farm at Langham, Sask. and the Lakeland College Student-Managed Farm – Powered by New Holland at Vermilion, Alta.

The new network’s first joint project will evaluate the “functionality, connectivity and value of data” from a common suite of sensors measuring soil, climate and crop conditions.

Each of the project sites has installed Metos Canada’s wireless sensors and other data-gathering devices such as for field monitoring, weather monitoring and forecasting, water management, disease modelling, insect monitoring and crop nutrition management.

The data will go to make on-farm management decisions — timing fungicide applications, for example — and the farms will “evaluate the benefit of using data to manage those decisions.”

Some funding for the new network’s activities will come from the Canadian Agri-Food Automation and Intelligence Network (CAAIN), a separate network of over 60 technology and agrifood companies and organizations backed with funding from the federal innovation, science and economic development ministry. Both Olds and Lakeland are among CAAIN’s core partners.

A specific focus for CAAIN, when that network was launched in 2019, was to “create and implement a smart farm platform that integrates partners and creates the context for testing, demonstrating and scaling technologies.”

In all, the Pan-Canadian Smart Farm Network will pay for network-approved activities with a $2.9 million funding envelope including $1.1 million over three years from CAAIN, about $570,000 from other public-sector agencies and the balance from private-sector partners.

The Pan-Canadian network was one of nine winners of funding through CAAIN’s 2020 Closed Competition, in which other recipients include a project to develop a non-invasive approach to determine the gender and fertility of pre-incubated chicken eggs. In a separate release Thursday, CAAIN said it will announce the seven other recipients “over the coming weeks.”

On a call Wednesday with editors from Glacier FarmMedia — whose media assets include this website — Dr. Joy Agnew, Olds College’s associate vice-president of applied research and principal investigator for the Pan-Canadian Smart Farm Network project, said the new network has “ambitious” plans to expand to additional sites in the near future.

The initial collaboration — taking place across different agriculture zones and land bases — is expected to bring more depth to the results of the evaluation, she said in a joint release Thursday.

“Independent validation of ag technologies is critical and so is ensuring that validation is done using more than a single smart farm,” she said. “By joining with other partners, we’ll be providing farmers with information that will meaningfully inform their decisions about how and where to use sensor technology.”

The new network, she said on the GFM call, is “truly an example of a situation where one plus one plus one equals five.”

Blake Weiseth, applied research lead for the GFM Discovery Farm and agriculture research chair for Saskatchewan Polytechnic, noted the farm has been using Metos sensor data in field-scale projects and “having access in real time to similar data from other sites in Canada will expand our understanding of its value.”

Work is already underway to find more smart farm network members across Canada, the partners said, adding they expect to have opportunities to link the Pan-Canadian network with other smart farms internationally.

Glacier FarmMedia’s other Discovery Farm site, at Woodstock, Ont., is an example of a farm that could be added to the Pan-Canadian network if sufficient funding is made available, Weiseth said.

Josie Van Lent, Lakeland’s dean of agriculture technology and applied research, said Wednesday the network will also provide real value on the education side as “living labs” for the colleges’ students.

At Lakeland, the Pan-Canadian network’s activities are expected to be integrated into the college’s crop technology, animal science technology and bachelor of agriculture technology programs.

“When Olds College submitted this project for consideration, we were immediately intrigued,” CAAIN CEO Kerry Wright said in Thursday’s release. “Smart farms validate and demonstrate the use of innovative agricultural technology in a specific environment, and they provide opportunities to train students enrolled in post-secondary agriculture programs on the latest trends in ag tech.”

Another advantage for the Pan-Canadian network, she said, lies in “its opportunity to link smart farms across the country, thereby multiplying learnings and increasing the value of any data generated.” — Glacier FarmMedia Network

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The subsidiary of Brazilian firm JBS halted cattle slaughtering at all of its U.S. plants and its Alberta beef plant for a day last week in response to the cyberattack, which threatened to disrupt food supply chains and further inflate already high food prices.

The cyberattack followed one last month on Colonial Pipeline, the largest fuel pipeline in the United States. It disrupted fuel delivery for several days in the U.S. Southeast.

Ransom software works by encrypting victims’ data. Typically hackers will offer the victim a key in return for cryptocurrency payments that can run into hundreds of thousands or even millions of dollars. The FBI said earlier this month that the agency was investigating about 100 different types of ransomware.

The JBS meat plants, producing nearly a quarter of America’s beef, recovered faster than some meat buyers and analysts expected.

“This was a very difficult decision to make for our company and for me personally,” said Andre Nogueira, CEO of JBS USA on the ransom payment. “However, we felt this decision had to be made to prevent any potential risk for our customers.”

The Brazilian meatpacker’s arm in the U.S. and Pilgrims Pride, a U.S. chicken company mostly owned by JBS, lost less than one day’s worth of food production. JBS is the world’s largest meat producer.

Third parties are carrying out forensic investigations and no final determinations have been made, JBS said. Preliminary probe results show no company, customer or employee data was compromised in the attack, it said.

A Russia-linked hacking group is behind the cyberattack against JBS, a source familiar with the matter said last week. The Russia-linked cyber gang goes by the name REvil and Sodinokibi, the source said.

A JBS spokesperson said the ransom payment was made in bitcoin.

The U.S. Justice Department said Monday it recovered some US$2.3 million in cryptocurrency ransom paid by Colonial Pipeline, cracking down on hackers who launched the attack.

— Reporting for Reuters by Aishwarya Nair and Kanishka Singh in Bangalore.

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Farmers Edge, founded in 2005 in Pilot Mound, Man. by agronomists Wade Barnes and Curtis MacKinnon, has carved out a niche using field-centric data, artificial intelligence and its FarmCommand data management platform.

CEO Wade Barnes called it an exciting day during an online press conference Wednesday marking the event from the firm’s Winnipeg headquarters.

“It’s a transformational day for Farmers Edge and a huge change for all of agriculture as we see the digitization of the most important industry in the world,” Barnes said.

Barnes added that the company will use the new funding — totalling $125,001,000, based on 7,353,000 common shares issued at $17 per share — to build on its vision of digital farming.

“We’ll be scaling up our teams to grow the business,” he said. “We’ll also be developing new products.”

In many ways the IPO process represents the maturation of any company, he said, but added that it accomplished some specific things for Farmers Edge.

Most of the venture capital that’s been raised over the past few years has now been converted into shares, he noted.

“It leaves us with a really clean balance sheet, and lots of dry powder to go out and grow the business organically,” he said. “This is at a time when digital agriculture is growing rapidly.”

Responding to questions from financial journalists during the virtual question-and-answer session following company presentations, David Patrick, Farmers Edge’s chief financial officer, said interest was strong in the offering.

“Our underwriting partners told us there was about nine times the interest as there were available shares,” he said.

By 2 p.m. on the day of the IPO, share prices had already climbed to $19.64, rising $2.64 from the IPO price of $17 per share.

The company initially aimed to sell a 16 per cent stake with shares priced between $10 and $17 each, according to Feb. 9 sale documents.

National Bank of Canada and Canadian Imperial Bank of Commerce led a group of five investment banks on the IPO, and have an option to acquire an additional 15 per cent of the offering.

The company will trade on the TSX under the symbol FDGE.

— Gord Gilmour is editor of the Manitoba Co-operator in Winnipeg.

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The program, announced Wednesday, will consist of full-time studies at Lakeland’s campus at Vermilion, about 180 km east of Edmonton, plus “experiential learning practicums” off campus, en route to a bachelor of agriculture technology degree.

The program, Lakeland said, is meant to “bridge the gap between emerging technologies and agricultural management and production systems.”

“There’s a lot of technology already available and in use in the agricultural industry,” Michael Crowe, Lakeland’s vice-president of academic and research, said in Wednesday’s release.

“However, few people have an in-depth understanding of how to use it and the information it collects, or how to integrate that information into their commercial farm operations and agriculture businesses.”

Those enrolled in the program are to study smart agriculture as a management system, including data collection and analysis as well as interpretative tools and programs such as robotics, geospatial tools and artificial intelligence, as well as how to analyze and troubleshoot industry-leading hardware, software and data platforms.

Students on campus are to work on the college’s student-managed farm and at a new 8,000-square foot ag technology centre — an “on-farm lab” that’s expected to be open later this year, Lakeland said.

Students’ practicums, meanwhile, are to be done at ag data companies, technology and equipment manufacturers, dealerships, crop input service providers, agronomist service companies, crop and livestock service centres, farms, breeding and genomic companies, among other operations, the college said.

It’s expected that graduates of the program will be able to find work in assorted ag-related fields, such as in data services, development, management, precision technology, production, research or sales with ag tech companies, research organizations or equipment dealerships.

“Industry feedback indicated there is a shortage of agricultural professionals who can interface between the two disciplines — our degree program will fill that gap,” Josie Van Lent, dean of Lakeland’s school of agriculture technology and applied research, said in the same release.

Since the degree program is new, there’s no direct pathway yet set up for a master’s degree program, Lakeland said, but the college “will work with you and any receiving institution if you are interested in a graduate degree.”

In the future, the ag tech program may also offer opportunities for professional-development courses related to new tech and equipment, the college said. — Glacier FarmMedia Network

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California-based FBN, which has operated in the U.S. since 2014 and expanded to Canada in 2017, announced Tuesday (Sept. 15) its farmer members may now have “access to a select range of ever-expanding products and services without having to pay an annual membership fee.”

The fee, which in Canada last year was $800, paid for access to the company’s seed, input and insurance e-commerce sites, farm data analytics, grain marketing services, input financing, satellite imagery and aggregated data on crop performance and input efficacy, gathered from information provided voluntarily by other FBN members.

Under the new free-membership model — which still requires farmers to register with the company — fees may apply for “certain product and service offerings” other than FBN membership, the organization said Tuesday.

“Farmers have had many hard years in a row. But this year was the hardest. As a company we do not want any current or prospective members to worry about membership costs,” FBN said in its announcement.

FBN, which today operates in Australia as well as Canada and the U.S. with about 14,000 members in all, said it’s now “stepping up to provide access to a select portfolio of offerings, all of which are focused on creating transparency, competition and helping you lower your costs and increase your profit potential.”

FBN’s arrival in the Canadian marketplace led earlier this year to the launch of an investigation by the federal Competition Bureau — not into FBN itself, but rather into other major agribusinesses’ and wholesalers’ response to the company’s entry into Canada’s seed and crop input markets.

A Federal Court judge in February ordered several companies to hand over records and communications, related to the bureau’s probe into allegations that a number of manufacturers and wholesalers had either refused or restricted supply to FBN.

The bureau said at the time it was also “investigating whether some of these entities may have engaged in co-ordinated behaviour against FBN,” but emphasized there was “no conclusion of wrongdoing at this time.” — Glacier FarmMedia Network

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Canada’s actual seeded area is expected to see some shifts from the projections released Thursday.

“As a result of the timing of the COVID-19 pandemic, these estimates were produced in March 2020 under exceptional circumstances,” StatsCan said in the report, while highlighting a lower than usual response rate.

The report was originally scheduled to be released in April, but was delayed to Thursday.

“At this time, intended seeded area estimates cannot reflect the full impact on the crop sector as a result of COVID-19,” StatsCan said, adding that “over time, as seeded area estimates are revised based on new data, users will be able to see a more comprehensive view of the impacts on seeding and production.”

While revisions are likely, the projections were still largely in line with market expectations.

However, one crop that stood out was lentils, with the government agency forecasting a slight 1.9 per cent reduction in seeded area at 3.709 million acres.

“I have a feeling that the lentil number will look a lot different by the time we get to the final acreage report,” MarketsFarm Pro analyst Mike Jubinville said, noting red lentil prices have seen considerable strength since the survey was conducted.

Peas and durum have also seen solid prices over the past month, with increase from the projected 4.279 million pea acres and 5.228 million durum acres also likely.

On the other side, Jubinville expected any increases in durum area would come at the expense of other spring wheat. Total wheat acres were estimated at 25.427 million, which would be up 3.3 per cent on the year.

Canola plantings were forecast to be down by 1.6 per cent on the year, at 20.615 million acres. Jubinville expected canola was another crop that may see slightly lower area in subsequent reports.

StatsCan on Thursday also released a report on stocks of principal field crops as of March 31, 2020. The data showed canola stocks of 8.925 million tonnes, down 12.3 per cent from the same time the previous year.

Jubinville saw the smaller canola number as a sign that canola carryout for 2019-20 may end up a bit tighter than some of the more bearish projections, especially as both export and domestic crusher demand has been solid so far.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

Table: A recap of Statistics Canada’s acreage report as of March 31, 2020. Pre-report expectations are provided for comparison purposes. Figures are in millions of acres.

* – “All wheat” includes spring wheat, durum wheat and winter wheat remaining after winterkill

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