Why Monsanto Bought The Climate Corporation (It’s The Weather, Stupid)

The_Climate_Corporation_Logo2Monsanto’s billion-dollar acquisition of The Climate Corporation plants the seeds for an agribusiness revolution, writes Vlad Savov for The Verge:

To look at Monsanto’s product pages, you’d think the company’s business is in selling two closely related commodities: agricultural seeds and weed killers. But that would be like saying that Verizon sells people data and phone calls. What these companies are truly engaged in is an effort to make themselves indispensable to their target market’s daily activities. Now Monsanto is stepping up that campaign by expanding into the high-tech world of big data with its $930 million acquisition of The Climate Corporation.

It’s not that Monsanto is unfamiliar with the cutting edge of technology — as its long list of patents will attest — but so far most of the company’s energies have been spent on altering, enhancing, and otherwise rearranging the basic ingredients that go into land farming. With Climate Corp’s expertise in hyper-local weather prediction and big data analytics, Monsanto looks set to become a fully fledged services company as well.

Founded by a pair of former Google employees in 2006, The Climate Corporation began life under the moniker of WeatherBill Inc. Siraj Khaliq and David Friedberg put together a complex system for highly detailed weather monitoring, prediction, and analysis, which allowed them to offer a new type of insurance to farmers. Instead of protecting growers against loss, WeatherBill promised to recompense their anticipated profit in the event of a given weather calamity. Thus, if you sign up for the company’s drought protection plan and your fields don’t receive the stipulated amount of rain, you still get the full anticipated profit of a healthy year’s crop.

NAME YOUR PERIL AND THE CLIMATE CORPORATION WILL INSURE YOUR PROFITS AGAINST IT

After changing its name to The Climate Corporation in 2011 and thereby better harnessing the prime web estate of its climate.com homepage, the company’s next big milestone has been this month’s takeover by Monsanto. The all-cash purchase price of $930 million is big by anyone’s standards — standing alongside Instagram and Yammer in the pantheon of tech startup sales — and marks the growing value and importance of applying big data analytics to long-established industries like agriculture…

[continues at The Verge]

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  • echar

    It’s been a trend for the family owned farms selling out to corporations for years. They make more money selling thier land than by selling their crops. I can’t help but see this as a similar kind of deal. On another note, it seems odd that they would make apps and such for all those tasks. It’s almost like farming for dummies.

    • VaudeVillain

      Farming is hard, and if you’re relying on it for your livelihood it has high risk and low margins.

      Anything that can help to mitigate either of those problems is highly attractive to anyone who wants to do commercial agriculture, and letting pride get in the way of efficiency isn’t a sign of a good farmer, it’s a sign of a poor businessman.

      It sucks that the current agricultural model rewards bad farmers who are excellent businesspeople and ruins excellent farmers who are poor businesspeople, but that’s just the way shit is.

      • echar

        Indeed…

        When I was a grain inspector, working for the devil, I met several farmers who were cashing out. At least one was in his 80s, and had been farming his whole life. That guy was putting in longer days than I was at the time. I don’t begrudge him for selling his land. I am not a farmer either, so I may blowing smoke.

        It just seems to me that farmers not so long ago knew about the things the apps have to offer. They knew because of experience handed down. Maybe I have some romantic idea about it all. Damn business!

  • Anarchy Pony

    All your agriculture are belong to monsanto.

  • godozo

    Sad that everything agricultural has become captive to the pesticide industry.

  • Rhetorikol

    Now I can’t trust the weather predictions.