How Will Your Food Be Grown in the Future?

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!

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2973049, ~/Articles/ArticleHandler.aspx, 9/2/2015 6:45:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Newman

Writing for the Fool since 2011. Interested in technology, the future of society, and how both overlap.

Today's Market

updated 9 hours ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:02 PM
DD $50.02 Down -1.48 -2.87%
E.I. du Pont de Ne… CAPS Rating: ****
MON $95.80 Down -1.85 -1.89%
Monsanto CAPS Rating: ***