“We truly think retrofit first. We think about what the farmer needs and what the farmer's fleet looks like. They often have a mixed fleet and, and they want to take their performance to the next level without buying a brand new machine. We design to truly cross all brands.”
— Seth Crawford, Senior Vice President and General Manager of Precision Ag and Digital, AGCO
AGCO is thinking retrofit first in its approach to autonomy. The OEM is designing technology that will meet farmers’ needs, which often include a mixed fleet and the need to improve efficiency without buying a brand new machine.
Seth Crawford, AGCO’s senior vice president and general manager of precision ag and digital, says it’s the best business opportunity for AGCO, as it positions the company to address farmers’ agronomic needs and deliver economic benefits.
In this episode, Crawford talks through AGCO’s retrofit-first strategy, its tech stack, its moves to add onto its autonomous capabilities and much more.
Full Transcript
Michaela Paukner:
Welcome to the latest episode of the Precision Farming Dealer Podcast. I'm Michaela Paukner, Technology Editor at Precision Farming Dealer. New episodes of this series are available wherever you get your podcasts. Be sure to subscribe to get an alert when upcoming episodes are released.
Michaela Paukner:
AGCO is thinking retrofit first in its approach to autonomy. The OEM is designing technology that will fit farmers' operations, which often include a mixed fleet and the need to improve efficiency without buying a brand new machine. Seth Crawford, AGCO's Senior Vice President and General Manager of Precision Ag and Digital, says it's the best business opportunity for AGCO as it positions the company to address farmers' agronomic needs and deliver economic benefits to them. In this episode, Seth talks through AGCO's retrofit first strategy, its tech stack, its moves to add onto its autonomous capabilities and much more.
Seth Crawford:
So I'm Seth Crawford. I lead our Precision Ag and Digital Organization at AGCO. And so as the General Manager of this organization, that includes our Precision Planting business unit that recently has been expanded to include Appareo, JCA Technologies and Headsight. And then I also lead our Fuse Connected Services and Technology Group, which is all the technology that crosses all of our branded equipment. So our Fendt, Massey Ferguson products. And then I have our digital interfaces for customers and dealers. So things like e-commerce, our configurators, all of our marketing automation, our CRM systems. And then finally, I have our Parts and Service Business globally. So that's all part of the business unit that I oversee.
Michaela Paukner:
Okay. And today we're talking about AGCO's tech stack in particular. So could you start by identifying what the components of AGCO's tech stack are?
Seth Crawford:
The way we look at it, as far as our AGCO branded machines, it doesn't matter if it's a Fendt or a Massey Ferguson tractor, we start with our foundational architecture and within AGCO, we call that our common electronics architecture. And then on top of that, we consider guidance to be the next step up and with that guidance, we moved over 10 years ago. In the earliest days, we had been leveraging third-party guidance. But about 10 years ago, we implemented common electronics architecture and we started to be the systems integrator with our guidance system.
Seth Crawford:
And so now, that's a very common, I don't know many large farmers that don't operate with guidance anywhere in the world. So that's almost a foundational element there. And then from the connectivity side of things, we group connectivity and some of our advanced sensing together, which would be our third layer. Then we have data management and logistics. Then the next layer is automation and artificial intelligence. And then finally, on the top is autonomy. Especially over the last year, we've really been active in enhancing our capabilities in many of the elements around our tech stack by buying multiple companies to take our capabilities to the next level.
Michaela Paukner:
Talking about the companies and products that are in each layer of your tech stack, could you kind of walk me through step one of layer one all the way to your latest acquisition or investment, where those fall in the tech stack?
Seth Crawford:
So at the foundational level, when we talk about that hardware and software and that foundational level, that's really enabling the machine to take these technologies. So on a Fendt tractor out of the factory, it's going to have this common architecture so that we can layer on our guidance system. We can enable our connectivity products and so forth. So it would not be something that a farmer would see necessarily. It simply is just there. Then obviously, for guidance, we have our Fendt guidance product. We have our Massey guide. And then in Europe and South America, we compete with a brand, Valtra, that we don't have in North America, but the same thing there, as well as our Challenger brand. And then in that guidance would be some of our advanced features like turn automation and the full field planning is there that then drifts up into the logistics area.
Seth Crawford:
But then on the connectivity side, this is just a Fendt connect, Massey connect product. And this enables the collection and transmission of the machine data to our cloud. So we're able to monitor the machine's operations for the farmer. We're able to communicate with the dealers and the farmers about the machine health and help them get in front of any potential service issues, remind them of maintenance intervals, those types of things. If I back up to guidance for a second, on the guidance side of things, one of the acquisitions we just made was JCA Technologies. And JCA is really enabling us to put this in a more advanced state. It's enabling more of a retrofit approach. So it can go on older machines of our own product, but also anyone else's product, whether that be a Case, a New Holland, a John Deere tractor, whatever it might be, because retrofitting is a key part of how we operate under our Precision Planting brand that not many others do.
Seth Crawford:
When I mentioned that connectivity and advanced sensing area, there, when we acquired Precision Planting in 2017, Precision has been the master of sensing at the advanced level in planting row crops for years. And then we've enhanced that with Appareo systems. We already had a joint venture with them for our connectivity and with the enhancements. Well, with that acquisition, now we've brought those capabilities in-house, because we don't see farming in the future without connectivity. Headsight's a company we purchased that had header height control systems. And so again, advanced sensing to make sure that we're at the optimal height to capture all of the crop going through the field.
Seth Crawford:
And then JCA Technologies has sensing technology really in perception-based sensing for autonomy. And then finally, the last one that we acquired in this space applies more to our grain and protein side of the business and that's Research 151. They're sensing grain within a grain silo, watching for hotspots, being able to identify and detect that and predict that based on some of the advanced sensing that they have.
Seth Crawford:
From a data management and logistics standpoint here, one of the big things that we've announced, and we're in the early phases of releasing, is our FendtONE platform enabling really having a single customer portal for farmers to go to. To help that along, the acquired technology there that enables advanced logistics planning would be from JCA Technologies. Appareo helps with that as well, from the machine-to-machine communication that's critical, that's enabled through the connectivity there. The other acquisition we have in the grain and protein space was with Faromatics. It's a product called Scout that helps with the monitoring of chickens in various chicken barns. So really covering the needs for managing data across an entire farm.
Seth Crawford:
On the automation and artificial intelligence side, we've made some pretty significant enhancements just on our own, organically, in the artificial intelligence machine learning areas, bringing in additional data scientists and data management capabilities. But every company we've picked up has had this. JCA, Precision Planting, for sure, has had this. And especially at winter conference, we really took a major step forward with Precision Planting in announcing that we're moving into the crop care side of the crop cycle, with spraying, with camera sensors, both for enhanced guidance, for emergency detection, for weed identifications, for spot spraying, really taking those steps forward. Headsight has added capabilities. Faromatics, again, added capabilities there. And then Green Eye Technology is a firm based in Israel that we took a minority stake in.
Seth Crawford:
And they're also in the, I'd say, the sea and spray area, whether it's green on green or green on brown sensing. We bought just under 3% of Green Eye and so we're staying very close to them in that rapidly evolving space. And then on the autonomy piece, one of the acquisitions that we're very proud of there is JCA. I know I mentioned them before. But JCA has really been at the heart of automation for a variety of companies. Most of the household names that you're hearing the other majors talk about. Somewhere in the background, JCA was helping either the majors, or the startups that the majors have purchased, to develop their autonomy. And so they really have some advanced capabilities at JCA and some really knowledgeable team members. And so we're excited to have JCA as part of the fold.
Michaela Paukner:
Excellent. You mentioned a lot of acquisitions, but then also that AGCO was working on its own hiring data scientists to work on some of the AI and autonomy type stuff. So what is your strategy for how those two things come together?
Seth Crawford:
Well, when we asked ourselves how we're going to accelerate this overall, and we had the strategic discussions internally and with our board, it really came out that, for sure, we could do it organically. We felt we had a foundation. But we just felt it would take too long. The hiring process, and identifying the right talent, and grooming them, that that would be a challenge. And simply going out and trying to poach individuals didn't seem like a real good way to go about it. So we decided on really a blended approach between enhancing our internal capabilities and going out selectively and identifying, in many cases, companies that had good capabilities, that could really come in and supplement what we had. And as part of that, we didn't feel that we needed to go out and get big name companies, because in those cases, you're generally paying a lot for the brand.
Seth Crawford:
And we feel, from a retrofit first approach, that we have a great brand with Precision Planting. And it's very well accepted and recognized by farmers as far as technology that can be retrofitted onto any anybody's machine. And that's really starting to grow around the world too, as far as brand recognition there. And then we also feel that with our Fendt and Massey Ferguson brands in North America, that we have solid brands there that are well accepted. So we didn't feel that we needed to go get brands. We felt that we needed to go get the capabilities. And so that's what we've done. Not many people have heard of JCA or Appareo or Headsight, but if you look at the products that are out there across the farms, quite often they have some place in a lot of the farms that are out there.
Seth Crawford:
And we see that as a real opportunity for us to continue doing that too, continuing to build on our capabilities organically, continuing to grow the businesses we've acquired, and continue to keep an eye out for investments. And in the case of Apex.AI and Green Eye, where we've taken small venture capital stakes in those companies, it's really done to stay close to them and learn about the technology, see how it's evolving without maybe spending too much on an early-stage company or early-stage development.
Michaela Paukner:
Sure. That makes sense. What is your strategy for adding on to your tech stack?
Seth Crawford:
I would say it's invest organically. We are aggressively recruiting. We have a lot of jobs posted right now. And we're very specific about where we're trying to build up the capabilities. But in today's environment, we also have a lot of opportunities for remote work. And that's been paying dividends for us. And we're exploring the addition of an additional tech hub site that we're not ready to talk about today, but we're very close to being able to make announcements about on that.
Seth Crawford:
And then finally, I would say our Mergers and Acquisitions Group, Business Development Group, is as busy as they've ever been really combing through all the potential companies that are out there. Some of them are early-stage startups. And some of them are well-established companies looking for a transition overall. So it's a fun time to be in the business. And now it's a matter of us trying to bring all these companies together and pulling in the same direction. But so far, that's going very, very well. We have a lot of new employees that are excited to be part of the overall AGCO organization.
Michaela Paukner:
What do you think that you and AGCO are doing to make that transition successful, to get everybody moving in the same direction?
Seth Crawford:
Well, what we're we're trying to do is enable product teams to help them be very focused on a specific task. We're not trying to put them in a shared service where they don't know who farmers are, where they don't know what their end product is. As part of our strategy refresh in 2021 that we announced, it was all about being farmer first. And so we want our employees to be very clearly focused on solving a farmer's problem and building teams, so that that team truly owns their solution that they're going to bring to solve that farmer's problem.
Seth Crawford:
And the companies we've acquired, it's really energizing for them, because in most of the acquired companies, they were doing services for other companies. So they were a step or two removed from that farmer, the person that's really out in the field growing the crop. And so I'd say it's been invigorating and it's been a lot of fun.
Michaela Paukner:
Yeah. I imagine actually getting to interact with the person that uses the product is really motivating for a lot of people.
Seth Crawford:
Absolutely.
Michaela Paukner:
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Michaela Paukner:
In your current tech stack, what gaps do you see? And how are you addressing those?
Seth Crawford:
One of the gaps that we had was really enabling farmers to manage their data and manage their experience across all areas of how they do business with us and how they manage their overall farm. And so that's where we've created our one digital effort. And that's the branding that we have on that for Fendt customers is FendtONE, as an example. And that enables the farmer to have one interface that they go to. And as far as managing their data, managing their machines, managing older information, whether they want to buy spare parts, maybe they want to see if there are any alerts coming off their machines, or see how they can optimize their operation better, they have that now. It is still in the early stages. So I wouldn't say it's a gap, but I'd say it's a maturing capability that we have.
Seth Crawford:
The other thing that we are really spending a lot of time on is our overall digital transformation. This is something that started before COVID and we're very happy it did. And that's really enabling farmers to do business the way they want to do business. And that is having the ability to shop for machines, and configure their own machines, and shop for the spare parts they need, and see the recommended products overall, and then transact. And with that, it's the way the farmer wants to do the business and just also taking into consideration how that engages the dealer network as well.
Seth Crawford:
And so I think we've really done a nice job of engaging the dealers in the design of this and the fulfillment. So they're still part of the value chain, which is critical to maintaining a healthy dealer network. And it's fulfilling the farmers' needs. But again, this is still a small fraction of our total business. But we expect that digital transformation to really enable farmers and our dealers to do business with us in a much more automated way in the future, that's much more in line with the rest of their personal lives.
Michaela Paukner:
Okay. And what are you doing with dealers to get them at part of this digital transformation?
Seth Crawford:
Well, we have advisory groups. So we share some of our plans. We share the research that we see coming from customer focus groups and customer experience studies. And then we ask, what are the activities that dealers are facing that really are non-value added for them? They do it, but they wish it could be automated in some way, because they answer the same question over and over. And so we're involving them in the process. And then we're also asking, what's absolutely not acceptable? And then how do we transform it to make sure that they continue to be very, very healthy? And in fact, increase the customer experience that's delivered and reduce the variance of that customer experience while lowering the cost to serve the customers.
Seth Crawford:
Because wherever I've been, in fact, in the world visiting dealerships, I can't think of one dealer that ever told me they have enough people on staff, or they have enough service technicians, or they have enough parts personnel. They're always talking about how short they are. So we're actively mapping where are the tasks that are really just non-value added and how do we get that slop out of the system so that they can really deliver a higher value experience where they do have the physical touchpoint and make the most of that.
Michaela Paukner:
What would you say differentiates your tech stack from that of your competitors?
Seth Crawford:
I'd say probably the biggest thing that just, maybe not the tech stack... As I look at the comparisons that really everybody's putting out, and it's even beyond our industry, there are a lot of similarities, because you can't skip, you can't go without sensing capabilities if you're trying to get to autonomy or to automate a task. But our big differentiator is that we truly think retrofit first. So we don't think about just putting this technology on a Massey Ferguson or a Fendt tractor, or a combine, or sprayer, or whatever it might be. We think about, what's the farmer's need? And what's the farmer's fleet look like? And they often have a mixed fleet. And sometimes they don't have a mixed fleet, but they want to take their performance to the next level without buying a brand new machine. And so that's probably the biggest differentiator, is we design to truly cross all brands.
Seth Crawford:
And I won't say all vintages of machines, because as soon as I say that we'll get somebody that has a 1925 tractor that'll want a retrofit kit. So that might be going back too far in history. But we really look at, for sure, what's out there on the operating farms today, say up to 10 years old, regardless of the brand, and we're going to target that with the best business opportunity as we try to solve those farmer's problems and make sure that we're able to deliver that return on the investment while solving the agronomic need and delivering an economic benefit to that farmer as we leverage our technology. When we talk retrofit, one of the big differences that we have, because whether you retrofit something or you build it into your machine, a lot of the tech stack is similar. But when we talk retrofit, we're talking about a whole different channel.
Seth Crawford:
We have a Precision Planting channel established, a very strong channel established, for sure, in North America and a nicely developing channel in South America and in Western Europe, where their focus is retrofit. They're not your traditional equipment dealer. They may be seed and chemical. They may have other businesses, but they're not selling big tractors, big combines, tillage equipment, sprayers, et cetera. And they're very much agronomically focused and out there being able to deliver that. And they deliver it on the leading edge. They're often working with those leading edge customers, the farmers that want to be very much the first to enhance their equipment. So it's a very different channel approach than, I would say, the major equipment companies are taking. From what I read, they often try to develop in their existing dealers. But existing dealers often sell big tractors and combines and they get lost on this other stuff.
Seth Crawford:
It's a huge differentiator that we have. And I'd say it's working very well. I think that's one of the things you see with the rapid growth with the Precision Planting sales that we talk about almost every quarter in our earnings calls. That's been a big deal. And as we picked up Appareo systems and the Intelligent Ag Solutions channel, that only furthers our capabilities in this area. And so it's pretty exciting for us to take those steps forward. And then on the grain and protein side, that's important to talk about, because you look across farms, you don't have to look very far to see GSI grain bins, maybe it's AP branded hog house equipment, or Cumberland chicken equipment, or Cambria grain handling, a variety of these brands show up where we're applying this technology across a much broader horizon than some of the others out there are doing. And we see a lot of synergies there.
Michaela Paukner:
Going back to what you said about the retrofit markets and areas outside of the US, have you learned anything from dealing with a business that's more focused on retrofit than selling a big tractor that you think will apply moving forward selling autonomous retrofit kits here for North America?
Seth Crawford:
What we found is the disposable income of farmers is limited. And how they can invest it's limited. And so if you can show them a way to take those limited in investments that they have from year to year and maximize their output, they're going to put that forward. And for many, many years, probably generations, they felt that they had to buy a new machine to really enhance their overall productivity. And so what we've tried to do is number one, help them understand the economics and help them understand how easy it can be to do this. And then also, we try to create the solutions in a very scalable manner. So maybe if they want to retrofit a planter, they don't need to retrofit the entire planter. They can break it up into sections to where they can get some enhanced functionality without going down to robot remote control.
Seth Crawford:
And with the sprayer products that we're bringing out, that we announced at our winter conference, the same type of thing. Maybe they don't want to retrofit an entire boom on a sprayer. Maybe they want to break it up into four sections or something like that. They can get that agronomic advantage and get it at a small fraction of the cost of what it would cost to buy a new sprayer overall with a fully outfitted system. So it really caters to a much different segment with the small and mid-size farmers versus ag retailers and the extra-large farms out there. And we have those products that we're going after there too, but that's more on the OEM branded products that we have with our Massey and Fendt lines.
Michaela Paukner:
I just read an article that said the average farm size globally, about two acres, somewhere around there, which is amazing to think about when we're used to huge farms here.
Seth Crawford:
Exactly. Yeah, absolutely. You need to take a trip to India sometime and see the little farm fields that look like a postage stamp. And somehow they're farming on these little tiny fields. But it gives you an idea of why they're still using in some cases, no mechanized equipment, or very small tractors. And that's one market, but there are many that are like that. There's still a lot of development opportunities out there.
Michaela Paukner:
How do you go about navigating the challenge of when you're thinking retrofit first, how do you design a product that can work with any type of machine, and then also you're projecting into the future what people are going to need?
Seth Crawford:
Well, two things. One is we have an architecture. It's one architecture from a retrofit technology standpoint that sits on top of our common electronics architecture. So it can sit on our common electronics architecture, or it can sit on top of other manufacturers' architecture. And so that's one way. It's not like we build it where it's all one, because we know it will have to sit right on other shoulders, so to speak. So that's one of the key ways we go about it. And then as far as anticipating the needs, for the longest time, from the retrofit standpoint, we were very focused on planting, as the name would suggest with Precision Planting. They are very focused on the planting stage of the crop cycle. When we purchased Appareo, we had a joint venture with Appareo called Intelligent Ag Solutions. And Intelligent Ag, they were very focused on acoustic sensors going on fertilizer application equipment and on air seeding equipment.
Seth Crawford:
And so we had the seeding and fertilizer application. Headsight had front end equipment. And so what we are we're looking at is, where are we? Where do we have strength? Where do we have some traction and capabilities? And then where else are there opportunities that the farmer really wished that they could solve a problem? And so it's really staying very close to the farmers. And it's all part of the culture that we have and we're trying to further enhance of the farmer first culture, and listen to what they're saying their problems are. Not exactly how they want to fix them. We engineer the solution, but what are their problems? And then how do we help them overcome that problem with technology that we can apply to deliver on that agronomic challenge and deliver in an economically feasible manner?
Michaela Paukner:
Agronomy was something I wanted to ask you about too, and how that fits into your technology offerings and private offerings.
Seth Crawford:
Right. So with the agronomy, one of the things, we've continued to add to our agronomic resources, because this is one where from a farmer's standpoint, they continue to come back to us and say they don't really want more agronomic advice. They want more agronomic action. So it's really taking the information we're gathering from the fields and taking it to an action. And so we look very much at how can we, number one, gather the information up? And so that's where when we're harvesting, we're capturing a lot of information. When we're planting, we're capturing our seed rates or simulation rates, the depth, moisture, temperature of the soil. And then we're able to provide that information to the agronomist so they see that we measure emergence. And that's one of the things we introduced at the Precision Planting winter conference this year, is a series of cameras for advanced sensing, to be able to capture that on every pass of the field.
Seth Crawford:
What's the emergence? How is the crop progressing? So we're able to capture that and learn from it. Also, now with the sea and spray, not just see a weed and give the information to the farmer or their agronomist, but to be able to sense that it's there and act on the spot. So really putting the tools and the hands to do that. And we continue to be able to flow that information off the machines to the provider of the farmer's choice. And we obviously, have some very strong partnerships around the world with what I'd say are the major providers of farm management software, as well as maintaining an open architecture. So even if we don't have a formal partnership, the farmer can flow the data into the system of their choice.
Michaela Paukner:
Okay. Yeah, I had talked with Jan Becker from Apex.AI about the Apex [inaudible 00:33:49] based software. He kind of gave me an overview of some of the possibilities that exist for building on that type of software. So I was curious, what are your plans for expanding on those capabilities?
Seth Crawford:
Yeah, the main reason we were interested in working with Apex.AI is it gives us the framework to build upon, to get to fully autonomous machines and to enable not just a self-driving tractor, because I think if that was the goal, I think we'd all have it and the game would be done. And we'd just kind of compete as normal. But what we're looking at is how do we take it all the way to make sure that every task is performed and that we're able to monitor that and do that in a safe manner? And so the Apex operating system, and then Apex.AI, they're really helping us so that we're not trying to recreate that framework. And we're able to really accelerate our efforts by using their framework as we take the steps forward.
Michaela Paukner:
Okay. That makes sense. And that's applying to the Xaver robot, correct?
Seth Crawford:
We have a Xaver, but it's really something we're applying to our entire common electronics architecture and how we're taking that to the next generation overall across all of our products. So then that base level architecture will be able to, sometimes the statement of plug and play is overused, but as we bring additional sensors in the future or capabilities, it can plug into that architecture and we can enjoy those enhanced capabilities and yet maintain that functional safety as we go forward.
Michaela Paukner:
Okay. Talking about Xaver, how does that fit into your strategy for autonomous agriculture?
Seth Crawford:
Yeah, Xaver has been probably as much anything, an experimental learning platform for us to test out our capabilities and develop our capabilities on a very small scale. Rather than having a large machine running around a field, you have the smaller Xaver machine, where we're able to integrate our electronics architecture, our guidance technology, our sensing, and connectivity, and just build on that over time. And I would say that's really been the purpose of that. And that's where that one stays overall. I don't think you're going to see a Xaver robot on the market from us in the future.
Michaela Paukner:
Okay. That's why I was curious about it, because it's almost like two opposite things thinking about retrofitting and then this unique machine to just operating on its own in the field.
Seth Crawford:
Yeah. There are a lot of companies out there, I'd say a lot of startups, for sure, working on small robots to go through the field. And I would say they're doing a fine job of developing that technology. And so it'd be somewhat of a waste for us to try to chase that. I think for us it's to learn from the technology and then where there are applications that might leverage the smaller robot or the Swarm technology. We'll be well positioned to engage in that space without creating our own robot.
Michaela Paukner:
Sure. And then a broad question, what do you see as the future of the agriculture industry?
Seth Crawford:
I continue to see the future of the agricultural industry to be very bright. I don't think I need to recite the story about the growing population and improving diets and the demand for food. I think we're all seeing that and feeling that now as much as ever. And the great thing is farmers around the world continue to rise to meet that challenge. But we have to be there to enable them. And I think the nice thing is that all the ag equipment companies, all the precision ag companies, we're all investing heavily to be able to meet those challenges. I think in the end, the key for us is to make sure that we're delivering those productive solutions that bring that agronomic solution and the economic benefit for the farmer. And also to make sure that those solutions are reliable, because if they're not reliable, the farmer's going to give up on them very quickly because of the tight windows that they have to operate in.
Seth Crawford:
And then finally, they have to easy to use. And I think we'll continue to see more automation of features. And it's tremendous how many features have already been automated on the farm. I think that will continue, for sure, because they're finding labor is nearly impossible in most areas of the world where farming is done. And that demand is continuing to heighten.
Michaela Paukner:
Thanks to Seth Crawford for today's conversation. Let me know what you thought about this episode by leaving a comment on the web story for this podcast or on Precision Farming Dealers, Facebook or Twitter. If you're looking for more podcasts about precision farming, visit precisionfarmingdealer.com/podcasts, or check out our episode library wherever you get your podcasts. From all of us here at Precision Farming Dealer, I'm Michaela Paukner. Thanks for listening.
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