Monsanto announces purchase of The Climate Corporation
By Doug Rich
The Monsanto Company announced the purchase of The Climate Corporation on Oct. 2 for a cash price of approximately $930 million. This purchase will combine the expertise of The Climate Corporation in agriculture analytics with the risk-management capabilities of Monsanto’s research and development division.
“I look at this purchase through three lenses,” Kerry Preete, vice president of global strategy for Monsanto, said. “First are the challenges facing agriculture, second is the role of innovation in meeting those challenges and third is the transformative role data science can place in agriculture.”
“Five years ago we set the ambitious goal of doubling yields in our key crops by 2030,” Preete said. “At that time we said central to our goal was to improve crop production through the use of plant breeding, through the use of biotechnology, and the ability to improve agronomics on the farm. Including innovations that can be delivered through data science and the insights that data science can provide.”
The Climate Corporation was founded in 2006 by a team of software engineers and data scientists formerly with Google and other leading Silicon Valley technology companies. Since that time, the company has built the agriculture industry’s most advanced platform combining hyper-local weather monitoring, agronomic data modeling, and high-resolution weather simulations to deliver a complete suite of full-season monitoring, analytics, and risk-management products.
The Climate Corporation has a core set of support tools to benefit farmers. These include products that help them boost yields on existing farmland and better manage risks that occur throughout a crop season. The Climate Corporation will continue to offer its current risk-management products including an online service that provides crop planning, monitoring, and recommendations and insurance offerings through its network of independent agents.
“I am thrilled about the incredible future we have to celebrate today,” David Friedberg, chief executive office for The Climate Corporation, said.
“Our business’ mission is focused on helping farmers around the world protect and improve their farming operations with our unique software and risk management products,” Friedberg said.
The Climate Corporation has three main technology competency areas. The first is hyper local weather monitoring. The second area of competency is in weather simulation. The third area is agronomic modeling that allows them to predict farm level outcomes based on weather events, farming practices, and other key variables.
“These technology competencies form the base of our platform that powers our three major product areas,” Friedberg said. “The first is crop insurance, the second is weather insurance, and the third is our web and mobile software tools that help farmers make better decisions.”
Although Friedberg did not give an exact number, he said The Climate Corporation currently has thousands of customers who operate millions of acres of farm ground in the U.S. The acquisition is expected to expand on The Climate Corporation’s leadership in the area of data science, which represents the agriculture sector’s next major breakthrough and will immediately expand both the near and long-term growth opportunities for Monsanto’s business and Integrated Farming System Platform.
Preete said Monsanto would incorporate The Climate Corporation’s insights into its FieldScript product as soon as possible.
“We have been working on FieldScripts for the last few years assuming basically normal weather,” Ted Crosbie, global leader for IFS at Monsanto, said. “So when you look a prescription of any sort, such as a specific hybrid for a specific farm, in the absence of Climate Corporation’s weather capability we simply assumed it would be an OK year. That is not the best way to optimize FieldScripts. The Climate Corporation has the piece of the weather puzzle that we do not have. Weather adjusted FieldScripts is really the way to go and what we have always wanted to do.”
Crosbie said FieldScripts will launch this upcoming season and will be the regular scripts producers are currently using. But by this time next year they will be able to do something more comprehensive with the addition of data from The Climate Corporation.
The acquisition is subject to closing conditions and is expected to close in the first quarter of Monsanto’s 2014 fiscal year.
Doug Rich can be reached by phone at 785-749-5304, or by email at firstname.lastname@example.org.