Aug 25, 2020
How this AgroTech company takes on the majors with precise digital seeding to increase crop yield
- The agriculture industry is becoming more innovative and efficient thanks to new technologies
- Clean Seed is at the forefront of the digital revolution by offering actionable data through its top-of-the-line equipment
- Seed planting is no longer a “one size fits all” approach—it must be more accurate and Clean Seed is already ahead of the game
The iconic image of the farmer as a lone figure in overalls sitting on a tractor has changed radically. The agriculture sector is embracing new technologies like artificial intelligence (AI) and the AgriTech sector is booming as a result. What’s more, hi-tech seed spreaders now have exponentially more computing power than the Apollo space program that put humans on the moon. Farmers are metaphorically trading in their overalls for spacesuits and tablets.
Farming is shifting towards more informed decisions and actionable data and away from the "one size fits all" approach. AI-based farming contributes to better ecology and product yields using machine learning and image recognition methods. For instance, farmers can use AI to analyze many different aspects of their crops and check for things like temperature, water and soil conditions, as well as harvest accuracy.
"Our technologies are hyper-sensitive and hyper-accurate—we can place the product in a furrow differently, so plants go down to fertility.”
— Colin Rush, Chief Operating Officer, Clean Seed Capital Group Ltd.
Other Smart Technologies are helping farmers improve their bottom lines. They're also big business. According to a report by U.S.-based market research firm Markets and Markets, the Smart Agriculture Market is estimated to grow from USD$13.8 billion in 2020 to USD $22 billion by 2025 at a compound annual growth rate of 9.8 per cent. The North American combined precision seeding and planting markets alone are worth USD$5 billion.
So, forget the better mousetrap—build a better smart seeding machine and the world will beat a path to your door.
Building a hi-tech agricultural "Swiss Army knife"
That's certainly been the experience of Burnaby-based Clean Seed Capital Group Ltd. (TSXV: CSX). The company is led by a team of innovators and business management professionals with a proven track record in intellectual property development and game changing patented agricultural technologies in a sector that will greatly benefit from change. In fact, there is no better time than now to lead the charge in developing technologies to optimize crop yield.
Building off of these industry cues, Clean Seed has positioned itself to be on the leading edge of technology development. The company is far more diverse than being simply being connected with heavy agricultural equipment—they have a technology IP portfolio that is being synergistically deployed.
With this portfolio, the company is unrivalled in its potential to make crop production smarter, focused and more efficient. The by-product of this are increased yields and crop quality, lowered costs, and increased profits.
The company can accomplish these goals through their SMART Seeder™ technologies, which are revolutionary seeding tools that utilize the unique synergy of sophisticated precision electronic metering, singulation metering and powerful software control, putting in row-by-row variable rate technology.
Variable rate technology is a gamechanger in the agricultural industry and Clean Seed is at the forefront
What’s significant about this variable rate technology is that it can take third party soil sciences and samples, input them into the SMART Seeder™ as a “prescription” and configures the machine in real-time to execute on nutrient and crop recommendations on every square foot of a field. This process is truly a redefinition of “precise,”—after all, the most important stage of a crop’s life is in the initial planting stage.
Current seeding equipment on the marketplace is unable to deliver crops and nutrients into the ground with precision, like how the SMART Seeder™ does. Other industry equipment is rather broad and more akin to a partially controlled spill. Think of Clean Seed’s competitors as attempting to paint the Mona Lisa with a roller—it doesn’t seem pretty does it? Clean Seed’s technology can be thought of as a highly precise Inkjet printer—one that doesn’t miss any details, putting each seed into a near perfect growing environment at the start of its life cycle.
Why is this level of accuracy important beyond immediate returns for the farmer? There’s only so much dry land available and with the world’s population continuing to increase, how will we be able to feed everyone when the amount of land won’t be increasing?
Clean Seed is dedicated to maximizing the worlds available dry land through its variable rate technology. Farmers cannot plant seeds wherever they want and hope to produce the best crops anymore. This method needs to be more precise as the quality of soil can change whether it’s 3 m away or 3 km away from your original planting spot.
In addition, world hunger is a major problem and it’s going to get worse if more effective technology isn’t adopted around the world. This is where Clean Seed’s unique machines come into play.
THE CX-6 SMART Seeder commercial prototype is a big hit with farming community, industry media and government bodies
Clean Seed’s machines are the best at what they do—they are patented globally and are the only ones that make near constant adjustments to product rates on each opener row—drill wide. No one has done what Clean Seed has.
Clean Seed's main prototype, the CX-6 SMART Seeder™, recently toured western Canada in farming, governmental and academic circles. The machine made an impression.
"The CX-6 was very well received," says Graeme Lempriere, the company's Chairman and CEO.
"Farmers really liked all the fundamentals of what we were doing, we had lots of positive reviews and that was great because this is the result of years of refinement to get it to a production ready situation."
Enter Clean Seed’s all-new SMART Seeder MAX and SMART Seeder MAX-S are commercially ready and about to hit the market
The company has recently unveiled its all-new SMART Seeder MAX-S™ Series 60, which has the most sophisticated variable rate seeding and prescription delivery equipment in the industry and is about to change everything you thought you knew about AgriTech.
Clean Seed is rolling out its SMART Seeder MAX and SMART Seeder MAX S, which will be commercially available in 2021. The Max will feature a similar metering system as the CX-6 SMART Seeder™ on the lighter front-folding frame, while the MAX-S includes new vacuum-based singulation capability and an all new software control system (with cloud) to execute on actionable data like never before, solidifying Clean Seed’s stake as an industry technology leader.
Whether the operator is running flat rate across fields or utilizing HD field prescriptions, the SMART Seeder™ Technology on the MAX and the MAX-S, paired with its unique Cushion Drive Digital Metering System™, applies precise rates for up to five different products, independently at each opener over the span of the entire drill. Placement and volume accuracy of nutrients and seeds is key to the quality of all crops and overall yield results.
When discussing the company’s technological and game-changing achievements, Lempriere notes, "This is going to set a new standard and set the bar for high-resolution seeding and planting. It's like when Tesla came out with the first electric car.”
That’s a significant comparison for Clean Seed as they continue to drive technology development. The company believes that the next AgriTech revolution involves how and where crop inputs are applied. Investors will notice that new technologies are emerging to do a better job of collecting, mapping, processing and analyzing data than ever before. This data is being used to address the physical, chemical and biological constraints that limit current plant genetics from reaching their full potential.
The company believes that existing crop genetics have the capacity to double yields in a holistic manner. Doing so requires a deep focus of supporting each plant inside each furrow by delivering its individual needs to allow each plant to reach its fullest potential.
Clean Seed forecasted this technological revolution was coming and is well-prepared as a result.
With strategic partnerships, Clean Seed promises and always delivers
When it comes to advancing its suite of technologies for the industry, Clean Seed has formed strategic partnerships to help get their innovations into production and into the market. The company's strategic alliance with North Dakota-based Norwood Sales aligns it with a widely respected agricultural company that's supplied several major original equipment manufacturers (OEMs) with technology. Norwood utilized and modified its existing frame technology to carry Clean Seed's SMART Seeder technology.
"What makes this agreement crucial is that Norwood is an invested partner," says Lempriere.
"Norwood has invested its own capital in Clean Seed as well as the time, energy and engineering to produce the first machines to market. It's not just a contract to build. It's a partnership to produce, sell and profit from these machines."
Colin Tang, Equity Research Analyst at Fundamental Research Corporation, says the Norwood agreement is "significant" for Clean Seed.
"Norwood has a strong history of OEM equipment production in the agriculture industry, with a workforce of over 150. Basically, Norwood allows CSX to reach a stage of commercialization," says Tang.
Another partnership is with U.S.-based AMVAC, a company that delivers unique solutions for the broad array of challenges to enhance agricultural productivity and safeguard public health. The company has earned a place among the world’s top specialty chemical providers with businesses in the U.S., Mexico, Central and Latin America, Europe, Brazil, Australia and Canada.
We’re proud to announce our strategic technology relationship with @SmartSeeder. Learn more about how this partnership will help farmers’ precision applications: https://t.co/v8zSXshekF pic.twitter.com/z5h61ZkOVG— AMVAC Chemical (@AMVACChemical) April 2, 2020
Moreover, AMVAC has invested USD$2.5 million through the purchase of 6,250,000 common shares of Clean Seed and has also received licensing from Clean Seed for certain intellectual property rights for a USD$2.5 million fee and an ongoing royalty of certain delivery systems. This combination brings the total up-front investment made by AMVAC in Clean Seed to USD$5 million.
AMVAC’s precision application of crop input segment runs parallel with Clean Seed’s patented development of its ground-breaking highly advanced SMART Seeder™ and SMART Planter™ technologies, creating a symbiotic opportunity for both parties.
Clean Seed is also leading the way in electrifying the agriculture industry to leverage the benefits of sustainable energy and environmental security while increasing profits through the conservation and reduction of input costs on many levels of the farming process. Its recent agreement with EXRO Technologies will see the two companies collaborating to amalgamate EXRO’s symbiotic systems into Clean Seed’s SMART Seeder MAX and MAX S.
"Agriculture is driven by large diesel tractors and hydraulic systems which are fairly inefficient in terms of the amount of power consumption," says Rush.
"Our partnership with EXRO will help us meet the needs of the industry by electrifying it, which will reduce costs and provide further return on investment in areas like maintenance, size of tractor, the amount of capital costs you need to invest and operational performance."
When asked about the main shifts and electrification seen in the agriculture space, Sid Rajeev, Head of Research at Fundamental Research, notes that “In recent decades farmers have been progressively adopting more sophisticated technologies, classed under the term ‘precision farming,’ to increase efficiencies and manage costs.”
He adds, “Precision farming utilizes farming techniques such as variable rate farming, auto-steering system, field mapping, GPS, etc., to make the practice of farming more accurate and controlled. Variable rate technology, which CSX is focused on, is expected to drive significant change to the agriculture space.”
The AgriTech revolution is here to stay and now is the perfect time for investors to get involved
For our iconic farmer having traded in his overalls for that spacesuit and tablet, there's no turning back. The agriculture industry is becoming more innovative and digital friendly and that's producing real results. Crop production and crop production area are both rising, boosted by AgriTech innovations, which not only create jobs and increase food security, but they create wealth.
According to Reuters, investments into agriculture will exceed $2.36 billion this year, with just under half of that investment flowing into data collection, mapping and analysis for the farm.
“With agriculture, we believe there is continual need for technological innovations, which are likely to attract a number of investors into the space,” explains Rajeev.
And, according to an article by Tech Republic, “With more than 9 billion people predicted to populate the planet by 2050, finding better and smarter ways to grow food is essential.”
All of these factors position Clean Seed at the leading edge of the AgriTech revolution. The team is designed to be a cross functional agricultural group of professionals representing all key user groups in the farming cycle, thus ensuring they are meeting the future needs of the industry.
Clean Seed targets North America, Brazil and Australia in aggressive growth strategy
Lempriere says investors can look forward to a growth strategy based on Clean Seed's strengths: Software development, farm management technology, global licensing potential and cutting edge seeding and planting technology for North American and other markets.
"We'll be starting in North America and then we'll be moving into Australia and Brazil with the ambition to proliferate this technology worldwide through licensing and manufacturing in other countries like for example those in Europe," says Lempriere.
"Australia is also important and we will be expanding partnerships in Brazil because it's one of the largest crop producing countries in the world. But our ambition is to start in North America and ramp up as quickly as possible to licensing and distribution worldwide."
The company is also well-positioned to help mitigate the problem of food production in the COVID-19 pandemic era.
"Producers and the end-use customers all want to know where their food comes from and I think the COVID-19 pandemic was a wake-up call to the world," says Rush.
"People are starting to understand that food is not something to be taken for granted and the more investments you can make in order to secure that chain locally and globally, the better. Technology companies that succeed in giving margins to everybody in the food chain are going to be the ones that are going to perform a lot better than the other stocks in the market. And that's where Clean Seed excels."
For more information on how Clean Seed is modernizing agriculture, visit them online.
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