Land O'Lakes CEO: Disruptions Are an Opportunity
Published: Friday, September 6, 2019
Whether it's the weather, trade wars, ethanol policy, or consumer preferences, disruptions are a part of the economic landscape of farming.
Beth Ford, CEO of Land O'Lakes Co-op, says farmers are seeing "that level of disruption" play out every day in their fields and marketplaces.
Speaking at a Ceres Solutions field day last Thursday in Mentone, the Iowa native said every disruption is also an opportunity for innovation.
As head of the third largest agricultural cooperative in the United States, Ford is often interviewed by major news organizations and television programs. This year, most of the questions that come her way relate to tariffs and the ongoing trade war. However, according to Ford, the No. 1 disruption in 2019 for agriculture, and the Land O'Lakes Cooperative, has been the wet weather and planting delays.
This year, due to flooding in May and June, prevented planting acres totaled 19.4 million, and more than 70 percent of those acres were spread across 12 Midwest states. On the planted acres, crop yields are expected to be lower, according to most estimates.
The weather has also affected the movement of grain across the U.S., creating a challenging situation for Land O'Lakes.
Ford said Land O'Lakes leverages data and analytics to help its farmer-members make better decisions, not just at planting but also during the growing season. She said the use of this prescription service helps optimize crop performance and is an example of how innovation is emerging from a disruptive force.
According to Ford, agriculture is the last major industry to be disrupted by data and analytics. Now that the power of data is being utilized by cooperatives, it is going to have a widespread impact on the industry. For cooperatives, the key to survival is using analytics to deliver an advantage to the grower.
Another disruptive force in agriculture is the growing influence of consumers.
"Consumers have control," Ford said, and are shaping the marketplace by purchasing food that is sustainably produced—according to their definition.
For farmers, this becomes a "right-to-operate" issue.
"They (consumers) will not buy your products if they do not believe your behavior is sustainable," Ford said. "That's the truth."
"The other thing I would advocate for is, you need to get on the playing field," she said, referring to Land O'Lakes' own sustainability program. "This is critical, and the reason I say this with urgency is others are on the field and they will define your right to operate. I see it all the time."
With rBST, Ford said consumers succeeded in removing that proven technology from the market. Now, consumers are pushing food companies to avoid using GMOs (genetically modified organisms), even though GMOs are safe. Nevertheless, these manufacturers and processors are responding with marketing that implies there is a health benefit to non-GMO food.
"We know this is all false," Ford said. "We know it's all marketing."
"It is important—this is critically important—to leverage tools that allow for profitable decisions to be made while at the same time defining what sustainable production looks like. If you do not, somebody else will define it for you."
She said agriculture has "more opportunity to win" when it defines the playing field (sustainability).
Another layer of disruption, Ford said, is the rural-urban divide. She said 30 percent of rural residents do not have broadband access. There is also a shortage of healthcare services, hospitals and doctors in rural areas. At the same time, three out of every four farmers have been impacted by the opioid crisis.
Rural areas are also seeing declining investment and higher food insecurity, resulting in the loss of population and employment opportunities.
Consolidation is taking place in agriculture, especially in the dairy industry. In Wisconsin, three dairy farms are exiting every day on average, and the number of U.S. dairy farms has dropped significantly. Cow numbers are unchanged, but those cows have gone to large-scale producers.
Overall, there are still opportunities for growth within the agriculture industry, but, according to Ford, cooperatives need to leverage technology and position themselves to provide unique products and services to their members.
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