How Will Your Food Be Grown in the Future?

Strapping an iPad onto a tractor might benefit crop yields more than you think.

May 28, 2014 at 1:07PM

The word "farm" evokes pastoral imagery of cows grazing on rolling fields as a farmer looks out over the horizon. But farms are getting a software update. And if Monsanto (NYSE:MON) and its competitors can deliver, that farmer will be directing robotic tractors with an iPad and satellites. This is how our food will be produced from now on: more akin to playing Angry Birds than reading the Farmers' Almanac.

For those concerned about feeding a growing world population, this is the technology that will boost crop yields. It will also help to mitigate the effects of changing weather, give insurers a clearer picture of risks, and could lead to a new label at the supermarket of "human-planted and grown." And for seed companies, it is the new sector for growth.

How can you farm with an iPad?

No more pitchforks
Monsanto's Integrated Farming Systems is partly cobbled together with a few recent acquisitions: the Climate Corporation, which Monsanto purchased last October for $930 million, and Precision Planting, which Monsanto bought in 2012 for $210 million. The Climate Corporation offers by-the-field analytics and weather simulations, and Precision Planting's machines can vary seed density, depth, and variety. Together, they make up Monsanto's new FieldScripts product, which puts the right type and amount of seeds in the exact place in the field based on weather predictions, soil, and other historical data.

FieldScripts is still new, but Monsanto says it can improve yield by 10 bushels per acre. Last year, the U.S. corn harvest was a near record-setting 158 bushels per acre. With more data science products, Monsanto believes there are still between 30 and 50 bushels of corn yield, which could add $20 billion to business. Agricultural productivity accounts for 20% of Monsanto's sales, with the remainder from its seed business.

Farming's space race
With such potential value, FieldScripts has its competitors. DuPont's (NYSE:DD) Pioneer offers Field360, which helps farmers utilize data into planting decisions, and Encirca, which details real-time crop conditions around the country to help predict market prices and identify yield trends. Even though it's an extremely diversified company, agriculture brings in 64% of Dupont's operating earnings, making it an important focus for the company's future.

BASF and John Deere have a partnership to help growers interpret data and "make more precise and efficient decisions about their crops and operations." The companies aim to have a service released by the end of 2014.

Farming 3.0
While not as relaxed as a game of FarmVille, producing crops is moving toward more tapping on touchscreens. The technology can give farmers a clear value if it costs less than the extra bounty it can provide. The company that provides the best of these services will win over the next generation of farming, especially if it bundles the traditionally profitable seeds with superior software.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling "OPEC's Worst Nightmare." Just click HERE to uncover the name of this industry-leading stock and join Buffett in his quest for a veritable LANDSLIDE of profits!

Dan Newman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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