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Monsanto Buys Climate Corp. Envisions Big Data Farming
cagraham writes "Agriculture giant Monsanto has purchased the weather analytics firm Climate Corporation for over $930 Millionl. Climate Corp, a firm founded by ex-Google data scientists and software engineers, specializes in hyper-local weather prediction which they use to recommend risk-management and crop-insurance policies for farmers. Monsanto likely wants to use this technology to boost their big data farming systems, and help better market their genetically engineered crop seeds. This news comes the same day that Monsanto posted increased Q4 losses of $0.47 per share."
Monsanto is developing its own big data system, called IFS, to provide farmers more customized seed suggestions for their farms. It uses a geographical and soil survey of the farm to suggest many very small decisions in planting that should raise yields: Maybe this type of corn grows better in a part of the soil, or the same one will work better when planted using different seed densities in different locations. The big difficulty comes from implementing said decisions: regular combine is not designed to switch seed types and seed densities on the fly, so following the recommendation with old equipment would slow down planting to a crawl. Thus, it only makes any sense for big operations that can buy the latest and greatest equipment.
Buying a weather analysis algorithm might hand them better predictions, which should make the improvements in yield for using IFS. That would allow them to both increase the price for the recommendations, and to make them worthwhile to somewhat smaller farms. The weather algorithm itself will probably also gain from access to very detailed rainfall and temperature data collected to support IFS.
Nonetheless, this is an acquisition, and anyone that has been around long enough knows that most acquisitions end up destroying value, not creating any.