Craig M Dick

Agriculture | Marketing | Innovation

Tag: Food

Agricultural Uses for Blockchain

Blockchain is out of beta testing and has reached Agriculture.

A recent soybean shipment from the US to China has become “the first full agricultural commodity transaction using a Blockchain platform,” –Business Insider

If you want to stay relevant in the future you need to stay on top of the technologies that will shape it. While still in its early phase, Blockchain is a topic that you should understand some of the basics and how it’s being incorporated into agriculture.

Note: This is a basic overview for those in agriculture, I am not a Blockchain builder or expert.

“Blockchain can do to value transfer what the internet did to information sharing.” – Fobes

Block Chain aims to provide transparency and widescale trust via unalterable record keeping. This will transform supply chains of industries like precious metals to food and agriculture. It has the power to change the way we manage leasing and payment collection,  supply chain management, and quality assurance securing the provenance of goods and commodities.

decentralized network - Blockchain

Example of a decentralized network

The dream for agriculture is that the use of this technology will help commodity producers move up the value chain.

The world is moving from analog to digital and from digital to decentralized.

In the simplest terms Blockchain is a distributed/decentralized ledger that maintains transaction records on many computers simultaneously. Because of this mathematical relationship, the information in a particular block cannot be altered without changing all subsequent blocks in the chain and creating a discrepancy that other record-keepers in the network would immediately notice. In this way, blockchain technology produces a dependable ledger without requiring record-keepers to know or trust one another, which eliminates the dangers that come with data being kept in a central location by a single owner.

Most businesses keep a log of transactions within their business. You buy a product, enter it into your inventory. You sell it, you mark it off. Now imagine that when you buy a product you get a copy of all the transactions that product has ever had going back to the ingredients used to make it. When you sell that product, the ledger follows with the product. This is saved to the cloud on a decentralized computer system. Because everyone has a copy of this ledger, it makes it extremely difficult to forge a product. This process enables clarity across the supply chain and ensures quality standards are met along the way.

Blockchain company Abrosus is working on meeting these supply chain and quality standard needs.

“The state of technology today allows a bold rethinking of how the global food supply chains and markets could operate. A system of interconnected quality assurance sensors can reliably record the entire history of food, from farm to fork. Blockchain can protect the integrity and verifiability of sensor data. And smart contracts can enable automatic governance of food supply chains and manage commercial relationships between actors along those supply chains”. – Abrosus

Thier technology combines Blockchain with hardware devices (sensors and readers, cameras, container locks) to provide a platform to automate the input of data into a system and create a trusted basis of data input to meet the needs of manufacturers, consumers and government regulations.

US agriculture is a global marketplace and much of our product is exported. With our customers stretched all over the world, we need to be aware of the laws of those countries. One example is a law published in 2013 by The European Commission for the Good Distribution Practice of medicinal products for human use (GDP 2013/C 343/01). Chapter nine of this regulation requires proof that shipped medicines have not been exposed to conditions, particularly temperatures, that may compromise their quality. These regulations are now enforceable across Europe. Blockchain logs the data from monitoring systems in the pharmaceutical industry ensuring requirements for frozen vaccine storage are met such as:

  • Temperature [-25°C to -10°C],
  • Humidity [2 to 3%],
  • No direct sunlight or fluorescent light.

This ensures the viability of medicines and reduces the risk of loss of life.

Is this really needed for food? Between 1993 and 2006, the consumption of non-pasteurized cheeses caused 121 outbreaks, leading to 3,000 people falling sick, 140 hospitalizations, and more than 50 deaths. Since these outbreaks, the Swiss Federal Regulation has changed. For food products, Blockchain companies like Ambrosus can go further and define the various levels of quality for a particular product like this illustrative list of requirements for a batch of milk:

  • Temperature [4°C to 7°C]
  • Fat [3.18% to 3.22%
  • Lactose [2% to 4%].

While food safety is of utmost importance, a close second is quality. As consumer demands evolve, the term ‘quality’ has broadened to include ethical and environmental aspects. Consumers today have expanded the term quality of a food product to also include using eco-friendly procedures, good employee working conditions, and the welfare of the animals involved in the manufacturing process.

Blockchain technology gives agriculture the opportunity to provide supply chain efficiency, cost reduction, proof of positive environmental impact, improved customer service, quality assurance and regulatory compliance. These improvements are what our customers are demanding and will help ensure future profitability for farmers.

Additional Information:

 

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Three Reasons You Are an Agtivist

Three Reasons You Are an Agtivist

Yes, Agriculture needs to tell its story.

Yes, we need to feed a hungry world.

Yes, there is a lot of science that backs up conventional farming practices.

Trouble is, most  consumers do not care about any of that.

Ignoring the interests of the consumer makes you Agtivists not an AgVocate.

If you do these three things your are an Agtivist.

#1 You are part of “The Agricultural Echo Chamber”

Most Agtivist talk about agriculture from their view point and/or via sound bites from large corporate ag interests that consumers don’t trust. Consumers who “don’t get the science” are often shouted down. This further closes off the discussion, until it is only the hard core Agtivist talking to each other about how great they are. That doesn’t influence anyone.

#2 You are too “self absorbed”

Agriculture is doing great things, but so is the Automotive industry, and so are other industries. Outside of ag, I couldn’t name one of those things. Why? I am busy and so are consumers. They don’t care about what you are doing, and they are not going to care about it. Consumers don’t care about farming’s “adoption of technology,” efficiency, or production problems.  All they care about is their own interest.

#3 You are a “Data Gun Slinger”

If you whip out data factoids faster than Doc Holiday whips out his six shooter, stop. Just stop. Stop confusing people with data. More discussion of the science behind modern agriculture is not the answer. Agriculture has this backwards. For most people, decisions are made emotionally, then rationalized. When you lead with the cold, hard facts and science, you ignore the heart. Great marketers know you have to win the heart first. Food is very emotional for people, so we need to lead with emotion to win.

How do you stop being an Agtivits?

To effectively engage consumers, connect with them first. Start by by asking more questions about what is really important to them in regards to their food, rather than pushing your agenda. They need to know you get them, that you care. Once you have connected emotionally and have earned their trust, then you have earned the right to have a conversation about agriculture. Then you can AgVocate.

By ignoring the hearts of the consumers, they will grow to despise us.

 

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The Lesson of the Big 3

This past winter I was at a meeting where the speaker boldly announced: “If you eat you are involved in ag.”

I couldn’t agree with him more. I eat food, and I decide what foods I buy. I am involved.

Whether you are buying pork chops or cars, you are involved. And you have a say in what products the companies bring to and keep on the market.

Let me put it another way.  The consumer influences manufacturers by deciding to buy – or to not buy –their products. The manufacturer chooses what they will produce based on sales. If the manufacturer is not aligned with what their customers want, it doesn’t matter how cheaply it’s produced, or even how good it is or how well it’s engineered, it will not sell.

If you ride in a car you are involved in the auto industry.The Lesson of the Big 3

Up to the 1970’s, US car manufacturers resisted changing their cars. GM controlled 50% of the market.  It didn’t fear competition.  During the ‘70’s, Toyota increased their market share by providing quality economy cars. In the ‘80’s and ‘90’s they began marketing luxury cars. Toyota over took Ford, GM and Chrysler to become the largest automaker in North America in 2007.

The people spoke with their money, they choose better vehicles. GM and Ford learned their lesson and now make better cars. As a result, they’ve regained first and second place in US auto sales.

While quality is important to people who ride in cars, so is safety. We can thank Ralph Nader for his work on this.

Nader didn’t work on cars; he didn’t design them or build them; to this day he has never even owned one. Why should anyone listen to him on Auto Safety?

Nader was just a law student and stated writing about car safety. Due to his work Unsafe at Any Speed, Congress unanimously passed the National Traffic and Motor Vehicle Safety Act. This legislation reduced the number of injuries and deaths from road accidents by establishing federal safety standards for every American-made vehicle, including requiring safety belts for all passengers.

For his efforts, GM tried to destroy Nader’s image and silence him. Eventually, the president of GM had to appear before a Senate subcommittee and apologize to Nader for his company’s harassment and intimidation.

His contemporaries argued that Nader was ignorant of the trade-off between safety and affordability and that the vehicle death rates per 100 million passenger miles fell over the years from 17.9 in 1925 to 5.5 in 1965.

Nader (I assume) did ride in cars and he probably has family and friends that he wanted to protect. He was involved in the auto industry. Today, death rate per 100 million passenger miles is 1.08. Cars today are five times safer than they were in 1965. And we will continue to make them safer, since people very much would like their cars to not kill them.

So what do cars have to do with agriculture and food?

Most people don’t process or grow food. They don’t even garden. But they all eat. They are involved.  And the same problems that once affected the Big 3 automakers are now affecting food producers: quality and safety.

Yes, our food supply is the safest in the world, and yes, we raise some of the highest quality food in the world. Damn the science and statistics. But just like Nader and his supporters, there are consumers who still want more: more safety (whatever that means to them) and higher quality (whatever that means to them).

Just like the auto manufacturers, ultimately neither the food producer nor the food processor get to decide what will sell.  They can produce whatever they want and put it on the shelf in the grocery store.

But it is the consumer who decides what they want, and their purchase is their vote.

This is why 3 big food giants (General Mills, Campbell Soup Company, and Mars Incorporated) are voluntarily labeling GMO’s.  Here are some quotes:

Campbell’s and General Mills are saying, ‘It’s hopeless to fight this. Let’s get ahead of the curve.’”

“You can win the legal battle, but you’re going to lose the war because consumers have made up their minds.”

These 3 big food giants have learned the lesson of the Big 3 automakers: resist what the market wants and bankruptcy and liquidation may be your future.

 

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Designer Pork and Jeans

Designer Pork and JeansPeople buy their pork and jeans for what it says about their identity and beliefs. Your reasons as the manufacturer/seller of these products just don’t matter.

Growing up on the farm, I only wore Husky brand jeans from the sale rack. Like most farmers, my parents are fiscally conservative. After my first off-the-farm job, I upgraded to Cowboy Cut Wranglers and when I had extra cash, I would buy pre-washed Wranglers. At this point in my life, I worked for a farmer, did daily chores on our own farm, and aspired to be a cowboy. Wranglers were what cowboys wore.

A few years after college a friend opened a clothing store in Omaha, selling designer jeans  that cost close to $200 per pair. I assumed they would tear, stain and wear out as fast, if not faster than a pair of Wranglers. Why would anyone need a pair of these, let alone a closet full of them? When looking at designer jeans through my own set of experiences (mostly farming), there is no way to understand this type of purchase.

Perhaps an understanding of the reasons that designer jeans are more expensive would help. Designer jeans use a higher grade of denim or denim blend. They use different processing to ensure the denim holds its color and shape longer. They are better constructed for better fit, more true sizing and consistency. You are paying for more craftsmanship.

Whether this is true or not doesn’t matter, because those things have nothing to do with the real reason someone buys expensive jeans.

So how did the jeans in the picture end up in my closet? At a certain point in the hierarchy of needs, purchases are about self-esteem, needs having been meet long ago. Once basic needs are no longer a concern, people buy products for how it makes them feel about themselves or what it tells the world about them. Buying premium high-end jeans tells the world, “I am successful, sophisticated, with the current style, and might know something you don’t.” It is about the identity of the person buying the product, not the product.

Food can also fall into the category of identity purchases.

Again, once basic needs are met, people look for ways to improve their self-esteem. One way to do this is to buy “designer food.”

Hand-made, artisan, environmentally friendly, organic, nutrient dense, and hormone free, among other attributes can describe “designer food.” Whether “designer foods” are actually better than conventional/commoditized food doesn’t really matter.

Your reasons why Wranglers are better than DL1961 Premium Denim jeans just don’t matter. Your reasons why Wal-Mart pork chops are just as good as Niman Ranch Pork Chops doesn’t matter. If you’re broke (and I have been), then Wal-Mart it is. If you have the means to choose any pork chop you want, you are probably going to choose a fine tasting, humanely raised, sustainably-grown-by-a-family farmer pork chop. This is what a Niman Ranch Pork Chop markets itself as.

Consumers are, well, consumed in themselves. Since Wal-Mart doesn’t tell them how that pork chop made it to their store, they will assume it has been produced and handled just like the rest of the products sold at Wal-Mart, at the lowest cost. Which doesn’t sound very tasty.

Of course all of us in Agriculture know that the pork chop at Wal-Mart was also raised humanely by family farmers. After all, most food produced in this country is. But your reasons just don’t matter.

 

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