Will farming be fully autonomous by 2030?

Sascha: [00:00:03] From Equity Mates media. This is The Dive. I'm your host, Sascha Kelly. In the next few years, we're going to see huge changes in the world of farming, at least according to the world's biggest farm supply company, Deere and Co. Well, you might be more familiar with their name, John Deere. Earlier this year at the Consumer Electronics Show in Las Vegas, the company unveiled a self-driving tractor. And in their most recent earnings announcement, the company said that we would see fully autonomous farming for certain crops by 2030. Just around the corner. So that obviously got us dreaming about the world of automated farming, self-driving tractors, drones, fields covered in sensors, robots picking fruit. It's Wednesday, the 30th of November. And today I want to know, what does the farm of the future look like and just how far away are we from seeing this? To talk about this today, I'm joined by my colleague here at Equity Mates. It's Darcy Cordell. Darcy, welcome to the Dive.

Darcy: [00:01:03] Thank you, Sascha. Nice to be with you. 

Sascha: [00:01:05] Excellent. Now, how familiar are you with farms? Have you spent any time with your hands in the dirt? 

Darcy: [00:01:11] I was waiting for this. I'm a city voice assessor. I can't say that I'm a farmer, but it's an interesting episode. 

Sascha: [00:01:19] Okay, I've got to say, I'm the same creature comforts and all my style. But I do think this is just such an interesting topic. As I outlined this story really came to our attention after Deere's earnings call with investors. This year has been really tough for the farming industry: poor weather conditions, natural disasters and higher costs, especially the cost of fertiliser and oil which really counteracted any benefit from higher food prices. Deere is traditionally seen as a good litmus test for the agricultural industry, as this company does well when the industry as a whole does well. So how is it looking? 

Audio Clip: [00:01:54] 2023? The company says net income is going to be eight, eight and a half billion dollars. That is ahead of estimates here. 

Darcy: [00:02:02] Based on today's report. It's looking good. In the three months from July to September, Deere and CO made $2.25 billion profit. That's up 75% or almost $1,000,000,000 from the same three month period last year. Total sales were up 37% compared to last year. And a big part of this was that supply chain challenges are starting to ease. You said they were able to fulfil about $400 million in orders that had been waiting for extra parts to arrive. The stock price reached an all time high after they reported, and it's now up 26% for the year when the US stock market is down 17%. So as I mentioned, supply chain logjams are starting to ease and Deere expects profit of more than $8 billion next year, up 14% from the $7 billion in profit this year. So overall, a really positive report. 

Sascha: [00:02:52] Now, Darcy, those numbers are great and it's good to hear that it's doing well. But what I really want to dig into is the headline, the thing that I found the most interesting thing to come out of Deere's earnings call, and that's the discussion around autonomous farming. They've been working on this for years and they really accelerated their efforts with the acquisition of Blue River technology for a tidy $305 million back in 2017. This was an investment in bringing AI and agriculture together. 

Audio Clip: [00:03:22] Every tractor was driven manually, everything was done manually. You'd be planting. You had to follow a line. If the sun was wrong, you would lose the line. Darkness you couldn't see your marks, moisture couldn't see your ma. Then you'd get squiggly rows. 

Sascha: [00:03:40] Let's unpack this. What exactly is Deere doing? What do these developments look like?

Darcy: [00:03:45] There's some fascinating stuff going on. I will just say from the outset that most of the conversation around autonomous farming is focussed on crops. At the moment, animal farming is not quite as central to the conversation. I think it's a little bit easier to predict a field of corn than it is a field of pigs or cows.

Sascha: [00:04:02] And you've got to start with something, you know, let's master the crops before we move on to the more complicated terrain. 

Darcy: [00:04:08] Yes. So that's what we're talking about today. 

Audio Clip: [00:04:10] I do the tillage just as well as I can do myself with no one in the camp. 

Darcy: [00:04:16] Deere expects fully autonomous farming of road crops by 2030. Basically, that means machinery will be able to automatically farm crops like corn and soybeans without a human controlling it. And they're already well on their way to getting there. Early this year, Deere launched its first fully autonomous tractor called the Eight R. 

Speaker 4: [00:04:35] This is the same tractor that a farmer could buy today. It's the same 2430 chisel plough that they could go buy today from their local John Deere dealership. What we've added is the new autonomous components to complete the solution. 

Darcy: [00:04:49] These days, farmers can spend 8 to 12 hours a day, literally just driving the tractor. Autonomy would allow them to take control of the tractor while sitting at their desk or on their phone in town. The farmer can use the app to position a tractor, drive the length of a field, turn around, come back and then manoeuvre around obstacles. So John Day's chief technology officer, Jamie Hyndman, said recently. Agriculture has always been about doing more with more horsepower, more inputs, more acres. But this new era is changing all of that. In the last decade, it's been about doing more with less and providing farmers with tools to make informed decisions. 

Sascha: [00:05:30] What you're describing, Darcy It reminds me of a large scale version of my robot vacuum. Perhaps that's maybe a simplistic analogy to make, but, you know, it goes out there, it does the job. I sit at my desk, it cleans my house, and I absolutely love it. Obviously, that's on a small scale and I am a little bit more cynical when it comes to driverless technology. 

Audio Clip: [00:05:53] We will be able to put a tractor out in the field and let it run for 24 hours a day because it's not manned. 

Sascha: [00:05:59] It feels like we've had this promise of driverless cars just around the corner for the best part of a decade. And a tractor is a combine harvester. It's far more machine than a car. Is the driverless tractor going to be able to manage the complexities of a farm? I mean, when it's a wet wheel and knows not to get bogged, will it be able to avoid the rocks in the field and stop and go around them? I mean, my robot vacuum, it gets stuck on my rug. So it's like the technology here has to be fairly sophisticated. 

Darcy: [00:06:31] Yeah, very fair question, Sascha. The air tractor works with six pairs of stereo cameras and they give it a 360 degree view around the machine to help detect those obstacles you've spoken about. And the cameras assess the environment three times per second and then determine if there are any issues, if there are none. The tractor continues its work, but if there is a problem or big obstacle is detected, the machine will stop. Notify the farmer through the app and then it provides them a picture of the obstacles so they can make a decision on how to proceed. They can either use the app or they can go check it out themselves. 

Sascha: [00:07:07] It sounds pretty incredible and like they've detected my cynicism and come up with a plan. After all, Deere has been training this AI with photos from farms since 2018, the year after they bought Blue River Technologies. As this neural network gets fed more and more data, it will get better and better at navigating farms. Darcy, let's take a quick break. And then when we come back, I want to broaden the conversation from tractors and talk about what the future of the actual farm looks like.

Audio Clip: [00:07:38] Plus, the number one issue when I go visit farmers today is labour and finding the people to do the work because it's a seasonal job and more people are moving from rural areas to urban areas. And so there just aren't the people that we need in rural areas to grow the food that we all want to eat. 

Sascha: [00:07:56] Welcome back to The Dive. I'm your host, Sascha Kelly. Look, we don't want much for Christmas, but we do want one thing and that is a five star review. Thank you so much. To those of you who've already done it, it makes the biggest difference when it comes to people discovering the podcast for the first time and do we want to be discovered. So open your app right now. Give us a cheeky five star review. Tell us what you want us to talk about and we will do our best to dig into it. But let's get back to the topic at hand. Darcy and I are talking about autonomous farming. Darcy For a city slicker it does sound like a dream. Robots, drones, self-driving tractors, running a farm while I kick my feet up. All I need is the farm, obviously, and that is the vision that I have in my mind. Am I on the right track? 

Darcy: [00:08:42] I'm not quite sure. It's kind of a put the feed up. 

Sascha: [00:08:45] Yeah, I think I'm being a bit simplistic with that one. It's really hard work. 

Darcy: [00:08:49] The history of farming technology and old technology really isn't quite less work, but just different work. So farmers might spend less time sitting in a tractor or harvester and more time sitting in front of a computer, or rather than spending all day planting, they might spend a day analysing the data from sensors that measure water on nutrient level in the soil. And it's not like we're going from 0 to 100 here. There is already a pretty massive autonomous farming market. In 2020, it was worth $55 billion, but that market is set to reach $95 billion by 2027. So it's seeing some serious growth. 

Sascha: [00:09:26] And we've only really talked about Deere in this episode. There's also plenty of other companies working in this space, established agricultural players all the way to tiny startups. They're all chasing the cash that is moving into this automated farming market. 

Darcy: [00:09:43] Looking at autonomous tractors alone, there are about 30 different projects in the works around the world, although not commercially available yet. But when Deere, with 60% of the tractor market share in America, comes out with an autonomous tractor, that's when you know it's coming our way. Yeah. 

Sascha: [00:10:00] And so let's broaden the conversation from tractors to other machines. We've mentioned drones in passing as well as robots. Let's start with drones. 

Darcy: [00:10:10] Drones are going to be able to give farmers a better way to monitor the health of crops and soil. They'll be able to take aerial images or might even have thermal monitors that could identify crops, need more attention or be under threat from things like pests. Over time, they'll be able to do more than just monitor. They'll actually take action by dropping water, fertiliser and pesticides on crops and closer monitoring and faster actions will massively improve crop yields. According to the USDA, farmers sprayed nearly $15 billion worth of chemicals every year, yet they still lose 37% of their crop yield to pest damage. So imagine being able to have a closer view of all your crops and be able to spray only the crops that need spraying when they need spraying with the amount they need sprayed. 

Sascha: [00:10:56] So we've got autonomous tractors to help us prepare the fields and plant crops. We've got these autonomous drones that are monitoring and reporting back to the farmers, but we haven't talked yet about robots, which you've also mentioned. 

Darcy: [00:11:10] Yes, there are hundreds of robotics projects all aimed at replacing different aspects of conventional farm work, pulling weeds to picking fruit. There's a robot trying to help us do these things, but this is where the excitement of technology really meets the reality of farming. For a lot of the hot days, machines are just not as effective or efficient as humans are. And picking fruits and berries is really where we say that most clearly. The first strawberry harvesting robot was launched ten years ago in California. It was called Argo Bot and ten years later, Argo is still in the prototype stage. This is a real challenge that combines machine vision, teaching a computer to identify fruit on the tray, artificial intelligence, teaching the computer to make a determination if that fruit is actually ripe and robotics, you need to give the robot the ability to pick the fruit without damaging it and doing it all quicker than a human can. It's pretty tough. 

Sascha: [00:12:03] Yeah, there's lots of small decisions in that process that you wouldn't necessarily think of that you'd have to teach a robot. But let's close out by talking about what the future of farming looks like when we're going to see it, and if there are any really novel ideas coming down the pipeline. 

Darcy: [00:12:20] So technology is constantly changing and it will keep constantly changing. We're mainly talking about farm automation today, but there's so much more technology coming down the pike. A few that I came across that I want to share with you for no reason other than I loved learning about them. 

Sascha: [00:12:35] There is no better reason than that. Darcy, I think Like just learning about fun things that are happening in the world. Yeah, that's. That's what's the most interesting, right? 

Darcy: [00:12:44] I hope you like them. We've got laser scarecrows. So after discovering that birds are sensitive to the colour grain. A researcher from the University of Rhode Island helped design a laser scarecrow, which projects green laser light. The light isn't actually visible by humans in sunlight, but it can shoot about 600 feet across a field to startle birds before destroying crops. 

Sascha: [00:13:06] Laser Scarecrows. Darcy It sounds like a Stephen King novel. It sounds like a horror movie in Waiting. 

Darcy: [00:13:10] Honestly, it's a bit creepy. Sacha But we've also got Bay Vectoring Technologies. A scientifically designed bumblebee hive allows Baz to pick up a trace amount of pest control powers on their legs to spread as they travel within the field. So Sacha, I'm probably not in the position to say what the future of farming looks like, but if I was to predict where the future of farming will emerge, I'd say the Netherlands. 

Sascha: [00:13:33] Yeah, because the Netherlands is a fascinating case study. They're the number two exporter of agricultural products by value after the United States, a country two thirds the size of Tasmania. Australia's smallest state exports three times the value of agricultural products as the country of Australia. 

Darcy: [00:13:52] Yeah, about 20 years ago the Dutch were pretty concerned about their ability to feed their 17 million people and they set a goal of producing twice as much food with just half the resources. And it led to some amazing technological advancements. The Dutch have pioneered cell cultured meat, vertical farming, seed technology and robotics in milking and harvesting. The country has nearly 24,000 acres, which is almost twice the size of Manhattan, of crops growing in greenhouses. And these greenhouses can grow in a single acre. What it would take ten acres of traditional dirt farming to achieve. 

Sascha: [00:14:27] Well, Darcy, that seems like a great place to leave it for us. As we said, city slickers are learning about the world of farming today. It's certainly a really interesting industry to watch. If you've enjoyed this episode, please tell a friend about it. It really is the best way for our podcast to grow. And if you've just joined us for the first time, then welcome. Go and check out our back catalogue. Remember, you can follow us on Instagram and have a say in the subjects that we talk about every week. We are at the door of business news. You can contact us by email thedive@equitymates.com. You can subscribe wherever you are listening right now. See, you never miss an episode or you can come chat to us in the Equity Mates Forum. Thanks so much for joining me today, Darcy.

Darcy: [00:15:09] Thank you, Sascha.

Sascha: [00:15:10] Until next time.