Teddy Bekele – CTO of Land O’Lakes

Borna (ClimateAi) 0:03
This is Agriculture Adapts by ClimateAi. Every week we speak with industry leading executives farmers NACA dynamics to get a 360 view of how the agriculture sector is innovating to stay ahead of a changing climate. I’m your host Borna Poursheikhani. And I am your co-host, Himanshu Gupta. We’re a team of climate scientists and agriculture entrepreneurs trying to make farming more resilient, profitable and equitable as we transition to a new age of agriculture. This podcast is our journey as we explore the hurdles and opportunities that lie ahead for the industry to feed the world. Hello, and welcome with us. We have Teddy Bekele, the CTO of Land O’Lakes, thank you for joining us.

Teddy Bekele 0:42
Thank you for having me on the show.

Borna (ClimateAi) 0:44
So what we usually like to do on this podcast, how do you sort of start off with the story so what’s your journey and how did you get to where you are and what’s your relationship to agriculture?

Teddy Bekele 0:53
Yeah, so my relationship to agriculture goes all the way back to the day I was born. I was born in Ethiopia. My dad Actually, at the time farmed about 400 acres of corn, wheat and cotton. So that was kind of the environment I came into. But then two years when I was about two years old dictator took over the country and nationalize the land, which meant he took it away from the farmers and essentially belonged to the government. And what farmers could do was either work the land for free with the hopes that they might get something back, or they could just quit farming. Most farmers quit farming at that time. And that’s why the reasons the country went into famine for 20 plus years after that. And then what happened was we we decided that, you know, in the end, the political situation got worse in Ethiopia. So my parents decided to move and my grandfather was actually Italian so I was a natural place for us to move to Italy. So at the age of seven, I moved to Italy. My dad continued to stay engaged in agriculture. He was no longer farming, but he sold crop protection products. And equipment out of Europe into eastern Africa. So not just Ethiopia, but also Tanzania, Kenya, Sudan, Angola and a few other countries there. So that’s the environment I pretty much grew up in. He was always dedicated to ag. But some points, you know, when, when I was a senior year in high school or senior in high school, my parents decided they wanted to move to the US and predominantly because my father got tired of dealing with the European bureaucracy and corruption in Africa. And he wanted to deal more with sort of a US based organization or a US based mentality. And he was a rep for buyer at that time and buyer had us headquarters in Raleigh, North Carolina, or in the Research Triangle Park. So he we decided to move there and right before college, and I remember having this conversation with my dad about what what, what was I going to do when I went to college and he made sure number one that I wasn’t going to get into music because he didn’t think I was very good at it. And then second, he’s said to, you know, he told me to stay out of agriculture, which is something I completely agree with him on because I had no interest I saw him struggling through this whole time I saw all the pains he went through and, and at that time ag wasn’t really all that appealing to me. And so I went to be an engineer and went to school and studied mechanical engineering. And then from there joined a company that was in industrial manufacturing, came at it from the engineering angle, although quickly realized that really wasn’t the greatest calling in life. For me. This was late 90s, early 2000s. And that time, that company had a rotational program. And I joined this small team called.com at the time, so this, you know, machinery company wanted to figure out what this whole internet thing was all about and how they could leverage it. So I joined that group and I had a lot of fun starting to apply technology to business problems. They did hit a speed bump, because you know, you had sort of that early bubble burst 2001 two and three, where you know, there was so much promise for the internet but then in only a few companies survived at night. At that time, those of you that are here today that seems nearly impossible, but the Amazons and the Googles, even at that time was thought that wasn’t really going to happen. So they really quickly transitions the.com team into information technology. And so I was given the choice of going back into engineering or staying with the Information Technology Group had a good mentor that told me that you know, sticking to technology was going to be a good thing. This this bubble bursting was just a speed bump at that time. And if I had stuck long enough to it that you know, some good things would happen. Those were wise words, you know, luckily for me, I decided to listen to those words. So went to the Information Technology Group, I got a little bit deeper into some coding, some configuration This was in packaged software was really big. offshoring happened after that, and I got involved in a lot of projects where I traveled to India but had some projects being deployed in Europe, some in North Dakota at the time, I remember and really spent essentially the next 15 years really learning tax And and going from a business analyst or project manager to a custom development manager and things of that nature. And you know, you fast forward time, this opportunity with lambda lakes came up, I had a really good friend that worked here. And he told me all the exciting things that lambda lakes was doing or thinking about doing with technology. When I quickly find out the land of lakes wasn’t really just a butter company as most people know for it, but it was really predominantly more into agriculture and crop inputs. You would think that would have been exciting, but at the time, that was almost a point where I go I don’t really know if I want to go work there. The sounds like the things that my dad was dealing with, and that’s something I want.

Yes, exactly. This is the only this is the one thing my dad and I agreed on is I wasn’t gonna do this. And I remember the day when I was interviewing and learning more about the company. And really, it was the culture that we had that Linda lakes had at the time being a co op based farmer owned organization, and also the but the entrepreneurial spirit that the the the leaders of the crop inputs business hat and how they wanted to leverage technology to truly transform the industry, and how farmers made decisions. And in and really bring more data driven approach to sort of something that was done based on intuition for a very long time. That was extremely intriguing to me. And also the leader at the time said, you know, today information technology or technology specifically, is more of a support function in my group, but I really want it to be as a competitive advantage in the future. And and I remember that phrase specifically because that’s the one that really I started thinking about it and go like, Look, I I wasn’t a support function, even on my previous organization, although technology is becoming more pervasive, but truly, somebody’s saying this is gonna be the key to the future and something that we want to truly make our bets and was something that was super exciting for me. So I made the move to lambda lakes that was about six years ago, and it’s been a great ride since then. I mean, the technology development was very small at the time. We grew it into a set of products. We started using a lot of data to be able to not only power the tools, but also to deliver insights to farmers. And today we’re you know, I mean, our entire organization is transforming to be more of a tech driven company. So very exciting. And last year, we had a new CEO takeover. I had worked more in the crop inputs business for the initial five years and really helping stand up the technology platforms and scale the adoption. And when she took over she said, You know, this is something we want to do across our other two divisions, Atlanta lakes, which are into animal nutrition, and obviously the dairy business that most people know land the legs for. And how do we bring technology maybe might not be the same as what we do in our Winfield united crop inputs business, but each business should have its own flavor of technology. And so she put me in this role of Chief Technology Officer, which really is a combination of a CIO and a CD or Chief Digital Officer. So let’s look at using digital media. To transform our organization, and let’s use our it horsepower to be able to do that while partnering up very, very closely with the business. So that’s the role I’m in. And that’s the journey we’re in there, we got a big challenge ahead of us, but it’s a lot of fun. And I really enjoy working with our members, which are farmers, or dairy producers, or even animal owners. So, so I’m on that journey, but in about a little over a year into it and super exciting.

Himanshu (ClimateAi) 8:24
Thanks, Teddy, for that introduction, clearly a very inspiring journey, not only for farming families, but also for engineers like us.

Teddy Bekele 8:31
Now, absolutely. I think I mean, you know, there’s a statistic that says, you know, less than 2% of the population is engaged into agriculture, whereas in the 1930s, it was more than 35% you know, and even myself, I mean, I put in myself, my dad actually truly farmed and you know, as I went through progression of mine in my life, I got away from farming more and more until about the last six years and, you know, you truly lose a sense of what farming is all about and where the, you know, where our roots come from, and it’s one of You know, first industries ever put there. But I think with the application of technology into agriculture, it gives all of us, especially the ones, you know, all of us that have been involved in technology for quite some time now, to be able to actually get engaged with agriculture, and truly see the labor of, you know, the insights and the code we put in place actually being used by folks that are farming on a day to day basis. So even if you’re in computer science, you actually can farm these days. And that’s super exciting.

Borna (ClimateAi) 9:28
Yeah, that really resonates with me, too. My grandpa grew up on a farm and my dad was a big farmer for a few years in the past. And I kind of deviated away and went and did my own civil engineering thing. And finally, in a roundabout way, I’m coming back to it now. So kind of a parallel journey on my part. Something that you said that was really interesting to me that came up with our conversation with Randy Johnson and a past episode was this idea of using technology to help augment intuition right, we need to start doing that a little bit more for a few different reasons a markets are changing Be technology is changing and see, the climate is changing. So we need to adapt. And we can’t necessarily implement these practices that we’ve been used to implementing in the past. So you guys particularly have been really good about kind of creating this culture where you breed innovation and you encourage technology to develop. How did you go about creating a culture like that with Atlanta lakes?

Teddy Bekele 10:22
Great question. And one of the reasons I say great question there because we were very intentional and very careful about not displacing the human intuition and the human expertise. So if you look at the systems wishes, specifically in row crops, think of us as a distributor. So we work with the buyers, Syngenta, the BASF and the corteva. We buy inputs from them, and then we sell these inputs to ag retailers. And these ag retailers are locally owned and independent businesses that are in the rural area. So you would have companies like Central Valley ag in Nebraska or ag Tegra, which is inside Dakota. And so these folks which are part of the land lakes cooperatives, so they actually are the owners of land of lakes, then work closely with their farmers. And they obviously help those farmers make decisions make choices, they sell them seed crop protection fertilizer, they buy back their grain, if they have animals, they sell them feed, if they have tractors, they’re going to run, they also provide energy. So they’re sort of a one stop shop in these local areas. And these businesses themselves are co Ops, so they’re owned by the farmers that they serve. So you have sort of this really tight relationship between a sales agronomist, which is someone who works at these this ag retailer, then that person interacts, you know, face to face with this farmer. And that connection, which goes beyond just the farming aspect of it because their kids might go to school together. They live in the same community. They may even attend the same church. So there’s a deep trust and a deeper relationship there. So as we introduce the technology, one of the things we didn’t want to do was break That trust or break that relationship. In addition, you know, one of the things that, you know, the leader that that hired me into this job was to always say, you know, all agronomy is local. And what he meant by that was that the field I mean, you can use remote sensing, we can use models, we can use samples to try to understand how this field is performing. But there is something to the farmer that has owned this land for a number of years, as well as this sales agronomist that has worked with that farmer on a day to day basis to be able to make recommendations. And so they know the spots in the field they know where they might have some challenges, they might know how that field performs on a wet year versus a dry year. So we can’t remove that component from the equation. Now what we can do is provide tools to be able to help augment the decisions they make. And so if the farmer has 30 fields, and the sales agronomist works with that farmer, but that sales agronomist also works with 10 other or 20 other farmers, they might be dealing with 300 400, even 1000 fields. So, which are the ones you’re going to focus on today? Which are the ones that need the most attention and help today? That’s something that the technology can do. Or if it’s a, if you’re looking at one specific field, which area of the field should we go into? And what kind of diseases or what kind of deficiencies can we expect in that area of the field. So, this is a type of technology where we said okay, these things are truly augmenting the decision. But obviously, the technology is getting better every day. And so the machine learning algorithms, even the images and the frequency, and even the accuracy of which we get them are getting better and better. So they are now the sales agronomist and farmers are starting to starting to rely on these tools more and more. So it went from the transformation was from Okay, I can see how this can help me so I’m going to start to use it here in here and so is more augmentation to becoming more reliance over time. And now there truly are looking for the insights that come from these tools. A quick example I mean, we have a crop model You know, with all the weather issues that we saw in the Midwest this year, this was very unusual. And despite all the expertise over the last 2030 years that sales agronomist and farmer may have had they have not seen something like this. So how is the crop actually going to respond to this type of climate. And it’s so interesting to see where the technology all of a sudden became a prized destination, because it was while they’re doing some calculation, so let’s go figure out what that’s telling us. And then we can validate if we agree with that. But there was starting to see I’m starting to see more of this demand and a pool for the technology versus you know, in the past that may have been a little bit more of a gentle push from our side.

Himanshu (ClimateAi) 14:40
So I like the fact that trust is central to any technology adoption, especially in the space of agriculture. So a lot of the agri businesses that we talked to they talk about how their profits at top lines and bottom lines are driven by commodity cycles, especially most when the row crops, then the specialty crops. So How do you guys as one of the most progressive technology adopters keep on justifying investments in technology under these changing commodity cycles, and I, you know, we have probably a recession staring us down the line, or maybe like a down commodity cycle staring down the line.

Teddy Bekele 15:17
We just did a 60 minutes segment, or this aired this past week. And what was interesting, one of the things I saw on social media was some focusing on how to farmers of afford these type of technologies, you know, and how can they even pay for these types of things? And before we even had a chance to reply to that another farmer I to reply to the person asking instead, how can a farmer not afford to have these technologies? So to your point, I mean, with the climate variability, as well as with these commodity cycles going up and down, I mean, you have to make some key decisions and one bad decision could mean the entire farm, and I really didn’t understand that concept till I really got into it in this past six years where somebody you know, uses a term betting the farm and I see these farmers, I mean, They bet the farm every single year, I mean, you’re buying, you’re going into debt, a ton of debt, buying inputs upfront that you’re going to plant and then, you know, do some applications on top of that and fertilize with the output coming much later. So then also all the return comes much later in the year. So you make one bad decision, and you don’t get to the levels where you want to be. And you can go into debt, and you might be able to survive that one or two, three years. But after that, you pretty much have to close shop. So making the right decision every year becomes paramount. So as commodity prices change, there’s also this idea that okay, what should I do? What should I apply more? Should I grow bigger crops? Should I stay with what I’ve got? Should I switch between corn and soybeans or wheat? What’s the right decision there? So the way we justified is this is how farming has to occur in the future. Yes, it’s helping productivity from where we were in the past. But going forward, especially from a climate standpoint, or a commodity perspective, if things are very unpredictable, whatever hand you’re dealt, you’ve got it. Be able to respond to that. And the technology has to be there to help you make that decision.

Borna (ClimateAi) 17:04
So in a world where you are betting the farm every year and lambda lakes is perhaps providing technology to sort of help these farmers, how do you guys de risk the technologies before getting them out? What’s the process for making sure that it is a trustworthy tool, and it is going to work to the capacity that they expect it to.

Teddy Bekele 17:22
And this is something that we actually goes back to 20 years ago, believe it or not, we have these things called answer plots, which are research plots, we have nearly 200 of them scattered through the areas in which we do business. So a lot of the Midwest, some out in the West Coast a lot in the south. And what we do in these these test plots or research plots are about 2020 acres in size and 16 acres is more for research and other four acres for demonstration. But what we do in these plots is and what we’ve done for 20 years is plant every type of seed variety, we plant every type of crop protection application, we use a lot of different methods. methodology. And we collect this data and this information to be able to understand how two different varieties perform in different environmental conditions. And how does this one practice differ in a different soil type versus another one. So this is the type of data we make available. And really the entry into technology for us was a way to be able to digitize that information. So we could scale it in over the last five years or so what we have been doing is actually using the technology even in these plots, and they’re the name of them is answer plot. So in these answer plots, we actually use a technologies ahead of time. And we have some agronomists that have PhDs and master’s degrees. And these are the folks that not only test them out, but also are involved early on in the design of some of the tools or if we’re going to partner with another organization, they would be involved in the validation of what it does, and maybe even some suggestions on how to modify the tool. So we actually get to play with this ahead of time. And even when I talked about those seed varieties, we would get Those varieties one year ahead of when they’re commercially available. So we get a chance to play with the products, as well as some of these technology platforms and see how that interaction works and what works and what doesn’t. And this is the type of information then when the next commercial year comes up, we are ready to make available with adjustments of technology or whatever that might be. And then really consulting these ag retailers and then the obviously them to the farmers to be able to adopt these tools.

Borna (ClimateAi) 19:26
And how do you guys decide which ones like so once you go from these research plots to sort of commercializing these technologies? How do you decide which ones are going to be the most impactful and which ones deserve the focus on your guys’s behalf?

Teddy Bekele 19:37
Yeah, this is where the the agronomist become paramount in that discussion for so the our agronomist right, so these folks that have advanced degrees in agronomy, and what they really helped us do is they would try to, we do a lot of testing and testing done and using statistics. So just to give you an example, let’s say that we have a certain variety and how does this variety For example, respond to a disease. And, you know, we would you know, specific areas because we have as many of these plots we would actually see these diseases occurring. And depending on what we do with a fungicide in that specific case, how does it respond to that fungicide and that’s the type of data we would collect. So we would say this specific variety has a high response or low response to fungicide, etc. So we would have that categorized. So that’s what the agronomist would be involved in, there’s observation involved but they’re also do a lot of even walking around and making sure that they truly can see like Yep, there’s a huge impact or, and here’s how it’s gonna spread versus not. And so there’s that type of work that goes into it. But then as the season progresses, now when we have both varieties are planted in variety of farms. And then we also have the technology tools, when we start to identify that a specific disease is that there’s a breakout in a specific region. What we could do at this point is be able to notify farmers as well as the sales agronomist they work with and say, we’ve seen this disease break out into your area. These are the farms according to the information you provided us. That have this variety planted and has a high response, which means he responds really well to an application. So this is the best time and the best amount to be able to apply this and then that gets into the hand of the folks that can make that application on an in a timely manner. So that would be for example, something that, you know, we’ve gathered the information we know the insight upfront and then as the season progresses, then we can, we can make sure we push it out to the folks that are impacted by it.

Himanshu (ClimateAi) 21:26
So the staying on the topic of technology, Teddy, tell us more about Tutera and sustained platform that you guys have.

Teddy Bekele 21:33
Yeah, that’s super exciting. I mean, that’s something now we’ve been engaged in in the last two years. And that really the benefit of that comes into play of who we are as a farm to fork cooperative. And it truly is a farm to fork right so we spent you know a lot of the technology goes up in this crop inputs business, which is our largest division. We start out with planting the seed in the ground. But you know, if you actually follow the food value chain, you know once the crops are ready to turn into grain Part of it for us is how does that go into an animal feed formulation. And that’s our second business, the animal nutrition. And in the feed formulation business, obviously, we’d buy the grains from a lot of different providers make the right ingredients and then prepare that for animal feed, which could be a variety, livestock and lifestyle animals. But if we stick to livestock, so you have dairy cattle, horses, chicken, goats, deer has all kinds of animals we get into, but it then stick to the cow in the dairy cow specifically. So you feed that cow and that cow then produces milk and then from that milk, we buy that milk back and produce butter or cheese that then ends up in the grocery shelf, right and so, so that’s when I say farmer to fork, we have the visibility. So one of the reasons we got into this Tara piece is obviously we see the changing customer or consumer behaviors where folks are wanting to know where their food comes from, but even more so important than where their food comes from is, is this food nutritious for me, and is it grown in a sustainable manner. That’s Right for the environment. And so those are sort of the signals that we were getting downstream. And how do we then translate that upstream? Now there’s the idea of tracking the food all the way through which, which that is a huge challenge. And I think that’s something will happen in the future. But even up front, I mean, is there ways we could we could go back to farmers didn’t say, how do you score yourself on a sustainability metric of sorts and say, Yes, I am being sustainable on my farm. And then we can communicate that downstream. So there’s a sort of tying all our businesses together. And that was really some of the Genesis behind the Tutera insights engine. The other piece was also if you look at are in business units as an individual, how do you make sure that our businesses are then living up to that some of the standards we establish and putting in sustainable practices in the way we go to market and the way we do business. So just a quick example, in the insights engine, we would give a farmer a score from zero to 100. And there’s a variety of measures metrics in which they’re scored, and getting the data from the field. And for that given field, we can say this is where you currently sit from zero to 100. If you want to be able to increase your score by X percent, here are some of the things you could do to be able to increase that score. take samples of your field, make sure you apply nitrogen at the right rates, maybe you know, variable manner. So that way you put the application in the right spots, you want to be able to track some things during harvest. And here are some capabilities you can put in place to be able to track some of these metrics. So there’s a variety of things they can do to be able to increase that score. So now what we’re trying to do in our Winfield united business, which is a crop inputs business, is can we actually promote those practices along with the products you know, we provide to ag retailers and farmers according to what our engine is actually starting to tell us which we already establish upfront. So now farmer can go back and say, Look, I was this sustainable, and now I’ve done certain things and now I’m at this level and then downstream, everybody can truly have a place where they can go and verify that.

Borna (ClimateAi) 25:05
And what does that mean from like the product standpoint or from the consumer standpoint? Like, are they seeing Atlanta lakes product that says sustainably made on it? Or how does that manifest in the actual store and people are going to purchase these products?

Teddy Bekele 25:16
Oh, we’re all very, and I put ourselves for sure. And then even the partners we work with, like campbell soup or Tatum, Lyle and whatnot, very, very early in this journey, right? So the first thing to do would have been to, Okay, can we establish what this framework looks like? And then once you’ve established that, we need to go and collect the data. And then once we collect the data, we have the scoring and then we have to identify the practices. So we’ve done all those things. And now we’re starting to provide that information downstream in the food value chain. So I think you would start to see things come through in the future that would say, yes, this has sustainably grown or, and we’re still working through what that means, right? Because right now it’s lambda lakes and a few of the partners were engaging, but we’d love to see this more widely adopted, and have more of a score that says you Yep, this is what this means. And here’s what we’ve had to do to get to this spot. And everybody can agree on that. And then now, whether it’s a way to market products to consumers, or whether it’s something that’s on a package or whatnot, can reflect that, and we have a good way to be able to say, Yep, we actually have a way to prove that this is what’s been done. But it’s not even the proving aspect of it. It’s more of this is actually what’s happening. And here’s how exciting This is for what farmers are doing upstream. And by the way, most of the work that what we’re finding and no surprise for us, but probably more surprised for others is a lot of farmers were already sustainable to begin with. One of the misconceptions I know when I talk to a lot of consumers is that, you know, farmers don’t care about sustainability. And I’m like, that’s absolutely not true. Because, I mean, a lot of farmers I mean, we’re very, very high percentage are generational farmer. So these are fields have been handed from one generation to the next. And the last thing you want to do is leave that field or a set of fields and worst conditions from what you received it in. So you want to be able to make sure that you leave that spot in the most sustainable and, and give your your children the ability to do better, but but show them sort of the way and so a lot of farmers care so much about their fields and environment. So part of what we’re trying to do is actually give them a way or a mechanism to be able to demonstrate that.

Himanshu (ClimateAi) 27:22
That’s a very cool theory. And I think I have not heard any initiative like that, especially in the cooperatives we have interacted with. And we wish this initiative is adopted widely across the US. So talking about sustainability. And clearly this is a climate podcast. So how do you see sustainability and nine climate resilience going together? So especially you talked about in the beginning of the podcast about floods and what happened in the Midwest, and the scientific evidence clearly shows that the intensity and frequency of floods is going to increase in Midwest. So what does that mean for you as a company and then for the farmers you’re working with?

Teddy Bekele 28:00
So number one, I mean, I think it’s and as we discussed earlier, using the technology, it’s not even that an option anymore, right? So because you have such unpredictable variability that that’s going to come your way, you’ve got to be able to figure out how to react. So one of the things we’re pushing is for farmers to more and more you need to use this technology, you will not be able to control what happens. I mean, at least in the short term, you won’t be able to change the weather itself. But once you’ve dealt the hand, how do you actually react to that, and the technology can help you through that portion. So that’s probably one one big message more from the short term standpoint, here’s how the technology can help you. And the examples I gave earlier about using models and making the right decisions at the right time becomes very important that in that situation. The second thing is you know, I love the concept of regenerative Ag and there’s obviously lots of practices under that and that Terra insights engine actually gives us the ability to be able to promote a lot of those practices as well. So one of the things we’re spending more and more time on is looking at soil and soil health, because obviously that becomes more important. So number one, we don’t want that very fertile soil to road and end up in streams. And then all of a sudden, the, the field is no left with good soil that has immediate impact for the farmer. But number two, if we look at the soil, and you know, you look at carbon emission, what are some of the things where, you know, you have obviously emissions, but you can also sequester carbon by growing crops. And we are trying to figure out and working with a lot of different organizations to understand what are some of those things that would actually help farmers sequester more carbon than they emit, right, and so they actually not only be carbon neutral, but even be helping sequester more carbon taking more carbon out of the atmosphere. So therefore, really helping more, maybe stabilize some of the variability we see today. So you know, we already have a platform that is starting to collect a lot of information and we can incorporate a lot of these And we have some basic ways to do it. But I think there’s more work to be done there, where I think now farmers can actually participate and helping figure out are there things they can do to be able to reduce variability. Now, the other practices that we talked about earlier of doing variable rate fertilizer application, very broadly seeding, variable rate, crop protection, all those things will certainly help. And as you’re taking samples ahead of time to be able to know where you have deficiencies and only apply in the right spots, those are all good practices. And a lot of farmers I mean, are starting are doing that today. But even going further, if we look at, you know, cover crops or the right way to rotate crops from one year to the next, being able to have some buffer strips in the right areas where you know, you may have some streams or rivers that come through. So these are all the types of things now we’re really kind of going deeper into and saying, okay, there are some things you could do in the long term. So this is more of a long term play. And if you apply, start to apply these practices, and really start to track data, and try To see if we’re making an impact and you can really short surely make a change in the long term, Stan,

Himanshu (ClimateAi) 31:05
you mentioned that you’re recommending farmers to apply some of those practices, which can help them become more resilient, clearly to floods or drought impacts in the Midwest. Is the market currently rewarding those farmers? What incentivizes one farmer to adopt those long term practices, which might make him more resilient in the long run, but will increase his input cost or capital expenditure in the short run?

Teddy Bekele 31:30
There’s a silver lining in this so part of doing this I mean, if you do it, right, and this is where technology plays a big roll in my mind. You know, when you talk to a farmer, that’s the first concern they have right is this is going to cost me more money or it’s going to be capital intensive. I’m already strapped as it is. commodity prices are not where they are. So, I mean, I’m not going to be I won’t be here. Forget the sustainability aspect. There’s the financial stability and financial sustainability as well. And I might not exist if some of these things you asked me are going to be detrimental. To my bottom line. So one of the things that has to happen is, as we promote these practices and show farmers how to become more environmentally sustainable, it has to go hand in hand with financial stability and financial sustainability. And there’s ways to do that. I mean, like I said, when you look at variable rate, it’s not necessarily that you’re applying more inputs, or less inputs for less output, it’s applying it into the right spot. So it might be you might be at the same spot by may be able to be more productive from a final gain perspective from a bushel standpoint. But at the same time, you’re being more environmentally sustainable. So it’s really finding that intersection of environmental sustainability and financial sustainability. And there’s multiple stories over the last couple years of doing this, where we’ve actually seen that happen. And part of what the Tutera insights engine does is exactly that. So, as a farmer, you can go in and you can customize. There’s a quick calculator that customizes you p&l, or at least your crop, p&l for your farm. And as you contemplate putting certain practices into place, or even putting some conservation tools into practice, like what does that do to my profitability, and you just have to find based on the acreage you have and the practices you implement, and really just even where you are in the country, you just have to sort of play around and find that right balance. So it has to be it has to be both and that’s it has to be a win win, both for the environment and the farmer. So when you when you have that happen, then you can truly promote and that’s where really, even our practices on the crop inputs are starting to change. So we can actually promote those types of things that says, Look, this is actually going to make you profitable, either stay where you are right now or make you more profitable, while at the same time making sure that this is you can see now the score for what you’re doing right for the environment.

Borna (ClimateAi) 33:52
That’s really interesting. Do you think that the climate resilience of a farmer should be factored into the insurance rates are the final In rates?

Teddy Bekele 34:01
Yes, I think so. And I truly think so we haven’t see that’s why it has to scale up now. And you get have to get more adoption, even beyond just farming and cpgs. I mean, you’re absolutely right. You got to get into banking, you have to get into insurance. You have to get into the green handlers and everybody else that’s in the ecosystem. Now. I mean, the question you asked me earlier, are farmers getting rewarded for it at this point in time? The answer is no, they’re not really getting rewarded for it. What we’re trying to do is to say, look, even if you don’t get rewarded for it, there’s still a way for you to win here. But truly, in the future, you know, if you are if you’re lending money to a farmer, I mean, the ones that can demonstrate that they’re going to be financially responsible, but also environmentally good stewards of the environment, you know, should they get preferential treatment? I mean, and that’s it? That would be a big question. I think the answer is yes. But we have to demonstrate what that means. And we have to have a way to prove that, but I think yes, and then Same goes when the insurance side of things and downstream from there.

Borna (ClimateAi) 34:54
So the true terrorists tool seems like it’s a extremely powerful tool and it seems like you guys are doing on that front, and it’s more laying the groundwork down for more opportunities in the future. What types of data are you collecting on that platform to be able to make it actionable in the future, and to make it more useful in the future as well.

Teddy Bekele 35:13
That’s the, you know, everything, everything we talked about sounds awesome, right? There’s always some place where there’s always someplace that’s really, really hard, especially when things sound really good and the work the work that has to be done. And for us, that is in the data collection side of things. So today, in order to make the engine work, there’s about 118 data points we collect about every given field. Some of the things are, you know, we can find them based on you know, USDA information about soil types in a given field. I mean, that’s something that has been collected in the past weather type information you can bring in obviously get that from weather stations that are in the area, and even if you don’t have one that’s super close on the field itself. You can do some machine learning and some triangulation and figure out you know, what, what the weather looks like in that specific area. But there are some things around Okay, what practices Do you employ? What’s the range In which you’ve applied a certain crop protection or fertilizer, what seed Have you planted on this field? And also what are the capabilities of this field or this specific seed, which we can get from our own data, but we have to know what you’ve planted there. We have to know how many times you went back and forth onto the field. If you’ve done some tiling, for example, for better drainage, I mean, you got to get be able to get that information. If you do, employ some conservation practices, whether you’re putting a pond in or a buffer strip, we need to be able to understand that and where and how you put that in, those become important information. When you get down to harvest, we need to be able to understand you know, what came off that field and what the yields look like and their specific parameters even about that yield. So there’s lots of information we capture. Now once we’ve captured that we can give you some great information back but that information today does not exist in one centralized place. So it’s not just a matter of going to the farmers and when would you be able to share a lot of them are willing to but it’s not. It’s not readily available. Some of it is And in a spreadsheet somewhere, some of it in a system in which they work with their ag retailer, and it’s housed into that system, some of the information maybe on the equipment or the cloud of the equipment providers that are collecting that information from the combine or from the sprayer or from the planter. So we have to go get that information from there. And then some information just sits in the knowledge of the of the farmer. So and when I say farmer, that’s again, that’s also truly simplified. But when we seen a lot of cases is it’s a family that that works a specific farm. And so you’d have, you know, a couple siblings working it, you might have some nephews and uncles engaged into all that and certain folks are responsible for certain fields. So, you know, when you look at, you know, Smith fields and you want to get information about the 40 fields that they operate, you may have talked to five different people to figure out what’s happening on each of those given field. So that makes it challenging as well. So that’s an area also trying to put in some, you know, could we write some algorithms? Could we use some remote sensing data to be able to use some image recognition and pre populate some of the fields for them? Could we work with some of the providers that are capturing this information and put it in an A cloud platform somewhere and be able to extract or through API’s and pre populate that. So that’s all the ongoing work, but it is, it is not a simple thing. I can tell you that.

Borna (ClimateAi) 38:25
And being on the technology side, my head’s like, Oh, this is awesome. Like there’s so many, like different valuable tools they can create from this. But then I immediately start to think like, well, what is the incentive for the grower to do it right now, if there? It’s not like organic where people are getting premiums in the marketplace, yet? There’s no sustainable labels yet where people are paying more in these stores to get these products. So what is the incentive for the farmer for the grower to upload these 118 data points into the true Terra engine?

Teddy Bekele 38:52
Then that goes back down to that sales agronomist we just talked about right and what are the recommendation that sales agronomist makes and that kind of that person shows them that, look, I can make you more financially sustainable if we do the following things. And and if they can walk through that, and then they start to go, let’s collect this information. And again, it’s not every year a good portion of that data we collected, you know, you collect it once and it doesn’t change quite dramatically for a few years after that. So sort of a one time exercise. So we’re just trying to put some resources even to help with that portion of it. But it really does come down to look you’re going to be in a position better than you were this past year if we follow the following things but in order to be able to make those recommendations, I need to be able to gather that data from you. And really that’s what we’re pushing that that conversation within the idea that in what look once you have this and you’ve become a master at being able to collect information but also know all this information and details about your field. Now we can help you we as lambda lakes, now we want to be advocates for you down the food supply chain and go and talk to different organizations different cpgs and say, Look, this is the type of information we have farmers are starting to do this You know, you should be able to reward them for being able to employ this these practices and collecting this information.

Borna (ClimateAi) 40:05
And I’d like to learn a little bit more about the sustained platform like my understanding is that it’s an innovation finance platform. I understanding that correctly.

Teddy Bekele 40:13
So I talked about the three divisions within lambda lakes, Winfield united Purina, and then land lakes, which is the dairy business. The fourth business unit is called sustain. And so it’s a very small group but they work across these other divisions. The biggest tool in the in the toolkit and inside sustain is a terra insights engine. So that is their product that’s the sustain is the name of the business unit. Now within Tutera, even now, we talked about there’s data collection in there, there’s the actual like, you know, crunching of the data with the inside score that comes out and says, you know, here’s where you are in zero to 100. There’s the financial platform as well that says, you know, okay, let’s, let’s calculate kind of where you are today and where you could be in the future. And we’re also working on so this this idea of carbon sequestration and carbon emission and if that’s if we can capture that information correctly, could we actually create a platform where it could be more of a, of a marketplace for for carbon. So that’s those are some of the things we’re looking into there as well. Now, so that’s on the crop input side. The other piece that sustain sustain is looking across all three business units, right. So it’s not just the crops themselves. They’re also working with our dairy business, for example, and specifically, a lot of our big dairy farms that were at least the farms where we buy milk from are in California. So in those areas, they’ve worked with the California government as well as Chevron, and seem like you know, there’s the manure that comes off of obviously, are all these dairy plants, which there are these dairy producers, which are quite large. So obviously, the manure is, you know, goes with that size. And they put in digesters in place where they have separated the liquids from the solids from the gases, and specifically the gases. They take the methane, and then run it through a generator and then run that through pipes and they kind of pipe it all the way down to LA. And they’re powering the buses and now So part of what the sustained team is doing there is truly figuring out how to connect different parties, whether it’s the government or dairy producers in Chevron. And really creating that ecosystem where now you’re trying to get into more of that circular economy and setting up that business model. So that’s another thing, for example, sustained looking into and then they have a variety of initiatives like this that they’re looking at across our business units, where they see opportunity, you know, to be able to promote sustainability, but in a, in a way that’s financially viable for our dairy producers and our members.

Borna (ClimateAi) 42:31
So you tell me when I go home to LA and I’m on the bus, I’m being powered by cow poops? Yes.

Teddy Bekele 42:37
Not exciting.

Borna (ClimateAi) 42:40
That is sustainability. There you go full circle back to it. And

Teddy Bekele 42:44
I’ve I haven’t been to the one in California. But I have been to one of our dear producers in Pennsylvania, and it’s super exciting there as well. I mean, he’s got a different technology, but the concept is the same where you separate, you know, you take the manure, and he actually adds waste from a potato chip company into the manure. And then that goes into the digester. And then again, the same separation happens. And he’s got a generator. And then once the methane, the gases go through the generator, he creates electricity, and he’s got an electricity pole that’s just for him on his farm, but then connects back out to the main grid. And what he tells me is actually, what he gives back to the power company is more than what he consumes on a day to day basis. And then he takes the solids and the solids really interesting because once you pick it up, the solid part of it actually has no smell whatsoever. And it’s like, super soft, it feels like you know, soil. And he said, You know, he could sell that, you know, to for people to be able to fertilize their gardens or things like that, but he actually uses it for bedding for his cows. So he completely uses that and he needs all of it and more to be able to make the cows comfortable where they sleep. And then the liquid part of it. It’s got this little pool to the side and that’s what he uses to fertilize his 600 acres of corn and soybeans. Which then he uses to feed his animal. So it’s truly circular in nature. And actually, he also gives it to the surrounding farms. He also gives that away for free as long as they bring up their sprayer and they load up like he doesn’t charge them any money. So he’s truly into this circular piece. And I’m like, that’s so awesome. It’s so interesting to see.

Borna (ClimateAi) 44:17
How does that reflected in the numbers like for that person specifically, like, was it just a ton of initial capital costs they had ready to go that they were able to invest to sort of get these things set up? Or is it just, it was just a profitable decision and he just took out a big loan and is paying it back over time.

Teddy Bekele 44:33
So farmers are the ultimate entrepreneurs. I mean, you talk about they do tons of things right. I mean, I have never met a pharmacist, I just do this. They’re their hands are involved in a lot of different things. So when times are good, they invest in in their operations and when times are bad, hopefully the investments they made in the past are paying off right that’s that’s really where it works. And so milk prices, for example, have now rebounded back a little bit but now like the last two years, they were really in a bad spot to the spiders. To the point where like, if you had 500 cows or less, you weren’t really going to make it. And so, you know, I remember when he said the milk prices were in a good spot, he had a decision to make, do I invest in this digester thing, which three years ago or four years ago, seemed crazy, not so crazy now. Or he could have gone the route of automated milkers, right, like robotic milkers. And he just made the gamble that like, you know, I think I still get people to come help me milk the cows. So where I really need to put my bed is into the digester and the generator and that whole setup that he put in place. So he invested then and now he’s in a spot where, you know, when the prices really dipped down and he was struggling, he was still okay, because of the investments he made. So, now if the milk prices stay up again, I mean, what he’s saying is okay, maybe I’ll look into robotic milkers maybe I will do something else. And, you know, maybe I’ll get into making ice cream. I don’t know he’s, the mind is always somewhere going and it’s so much fun to be around them.

Borna (ClimateAi) 45:56
That’s where you can chime in with your Italian jeans and sort of helping make you laugh. Yeah, there you go. Exactly, exactly.

Himanshu (ClimateAi) 46:03
I would like to go back to the carbon capture and sequestration topic that you brought in brought about Teddy. And clearly this has been the talk of the town now, especially most of the CPG companies have committed to one form or the other to the Paris Climate accord and reducing their emissions in the supply chain. So and you talked about like, you guys are bands to monitor as well as sequester carbon in with the growers and the fields they operate in? So what tools are you currently deploying to monitor and track sequestration?

Teddy Bekele 46:34
That to me, you know, when you get into the field, that’s not an easy thing. I mean, some of some of the stuff is pretty straightforward, right? So if you have a piece of equipment, and it’s gone up and down the field, I mean, you could look at the you know, usage of diesel or whatever that might be and you can, I mean, emission from that standpoint is very easy. where things can become hard is Okay, so let’s say you do no till or you do tillage on the field, like how do you actually capture the amount of carbon that was emitted into the environment. So for that you might need first of all really need to understand the soil and the soil science behind it. And then you may need to have some, you know, this folks working on little sensors that you could similar to soil moisture probes, you could put them in the ground, and then they can, you know, kind of have a reading for you there. So, I haven’t seen anything. I mean, I’ve seen a few things, but I haven’t seen anything that’s commercially available. That’s, you know, you can scale. But those are the types of things would have to look into, so that you could truly have an accurate reading. And I got at a macro level, you could do some calculations, but it’d be better to go down to the specific field or even parts of the field. And depending on the things you are or not doing, you’re able to capture that biology and chemistry combo that happens there. So that’s what we’re looking at. So again, like I said this, it’s in the early stages. We work with the Danforth Institute, for example, down in St. Louis, and they’ve done lots of lots of work around soil science, so working closely with them to see sort of how they can come up with ways to be able to track this. We actually have two labs. One is in Indiana, Indianapolis and the other one is in Ames, Iowa where We do some soil testing every year, especially the one in Ames, Iowa is more of a more of a modern facility. And they do lots of interesting things about, you know, when the soil samples come through how do you actually analyze a soil sample? And can we get more insight into that and have a way to be able to give a score that way so we can send a piece of soil and and then we can give you the score that way. So we’re looking into pieces like that. But yeah, that’s the area that that requires more work. I mean, it’s still very in the very early stages.

Himanshu (ClimateAi) 48:26
Going back to your African Ethiopian roots. Do you have any plans on a personal or professional level to launch some initiatives in back in Africa in the future?

Teddy Bekele 48:37
We do have a philanthropic arm called venture 37. And it’s been around for the last 20 years or so. And one of the things we do with that group is we try to take a lot of the lessons we’ve learned here in North America, and we go to India, Asia or even South America, not as much South America anymore, but try to hold help more of like smallholder farmers. With insights on how to better produce, you know, crops based on what we’ve learned here. And also we’ve tried to take some of the technology that we’re using here into those areas as well. Now, that said, a lot of the technology, what we found out over the last five years or so has to be drastically changed or adapted to those local regions. And so that is one thing that we’ll have to continue working on. But that has been an opportunity for us. And we’ve also learned on how to commercially can we actually get into that country and help in other ways beyond just the the philanthropic piece of it. So from my perspective itself, you know, I constantly work with that group, we’re looking for ways to modify our tools. We actually talked about tissue sampling or sampling earlier. That’s one thing for example, we’ve taken down to South Africa and we’ve done some things there both commercial and philanthropic and we want to be able to expand that because that seems to be an easy place to get started. But we are looking for ways more and more over time to be able to apply those lessons across other parts of the world.

Borna (ClimateAi) 50:01
Okay, awesome. Thanks so much for joining us here today. We learned a ton.

Teddy Bekele 50:05
Awesome now. Thanks for having me. This has been great questions.

Borna (ClimateAi) 50:09
Hey, everybody, thanks for listening if you have any feedback or you’d like to add your own two cents on the topic discussed today, or if you’ve just got your own ideas about someone that we should discuss in the future, please feel free to shoot me an email at podcast@climate.ai. At its core, this podcast is just a way for us to learn and we want to share our learnings as we go. So we’re always open to building on these conversations and hearing new perspectives. Thanks for your support and see you next time.