Extracted from the Farm Tender weekly Newsletter - Sign up and get the email every Wednesday morning before 6 am. www.farmtender.com.au
By Dwain Duxson.
Predicting the future or what things will look like in 10 years time is a tough gig. Amazon founder Jeff Bezos says he often gets asked, "what's going to change in the next 10 years?". But he says nobody asks him, "what's not going to change in the next 10 years?"
Bezos went on further to say, "And I submit to you that that second question is actually the more important of the two. Because you can build a business strategy around the things that are stable in time".
There is plenty of commentary about what's going to change in Ag over the next 10 years. Many articles are written every day about this, and some people even make a living from it.
So let's see if we can break the second question down a little.
You're thinking what I am thinking. Yes, we've all gotta eat. The Livestock we raise have all gotta eat as well. We can add wearing clothes to the list as well.
So we are going to have to grow Grain and other food, plenty of it too, and we are going to have to raise Livestock, plenty of them too.
So if we base the answer to the 2nd question around that, then how we fill in the gaps (with change) are the exciting bits.
So to grow Crops, we need a Tractor, a Seeder, Header, and many other implements. In 10 years, do you still think you will own a Tractor that you drive? Or will it be something you program, drop at the starting point, and it does the task on its own? Or will your Tractor look like a Tractor, or something completely different?
Now here I go, focusing on question 1...
Back to question 2. So we are going to need a Tractor. Many Farmers actually like driving Tractors, so changing to a driverless one might take a while. And will buying or subscribing to a driverless Tractor make me more efficient and cost me less. Initially, I would say no. The setup costs are always high at the start. So in 10 years, I will probably still be diving my own Tractor (it might be an electric one!!) in some way, shape or form.
But do we really know?
Does the food buying customer really want to know where the Wheat came from for the loaf of bread they bought? The Farmer in me says probably not, but we are going to need Wheat in 10 years time, so let's focus on that and park the fancy bits to the side for later. At least until I can see that it improves my margin.
In Agriculture, if you have a business that provides a product or service to Farmers, the rate of growth of that business will be much slower than if you were selling something to the everyday consumer. The dynamics of Agriculture only lets your business grow at a certain pace, and it's not quick.
Change in Agriculture takes time. The investment Farmers have in their operations is huge, so changing things around quickly is not going to happen. But changing things up over time and having that constant improvement mentality is what shifts the dial on a Farm.
Our industry is made up of all types, early adopters, go-getters, conformists, whingers, laggards. So the level of change over time is always staggered.
I see and read about many Ag Tech start-ups that focus on technology first and have no customers. I reckon it's more about the business model, having a product or service that is practical, building up slowly and acquiring customers along the way. Then start adding technology.
One example is how much time, effort, and dollars has the Wool industry spent on robotic Shearing, heaps. Where are we today? No more advanced. Why? Probably because the shape and movement of a Sheep is complex, and every Sheep is different.
Now that's not to say we don't try and build a robot to shear Sheep. We have to keep trying things and innovating.
The only way you're going to fail is by trying things, and the only way you will find those nuggets of gold is by trying things also.
Don't get me wrong, change is afoot in Ag.
So to have a successful Farming or Ag business in 10 years time, Bezos is telling us to focus on what's not going to change, eg, growing Wheat, breeding Cattle or servicing customers. I get that. Let's do that. But combine that with constant small changes to, or the re-engineering of your business model/s. I reckon, in 10 years time, you won't know yourself.
End of message