Climate change was hurting this leading seed company. Here’s how it was able to turn that climate risk into a competitive advantage.
Advanta Seeds, UPL’s Australian subsidiary, shows that with the right technology, climate risk can be mitigated and even turned into a competitive advantage.
The impacts of climate change have grown increasingly visible in the city where Andrew Short, marketing manager at Advanta Seeds, a subsidiary of global seed company UPL, lives and works. He’s based in Toowoomba, on the northeastern coast of Australia, which has recently begun to experience more frequent and severe droughts, heatwaves, and bushfires. Advanta has operated its plant breeding and plant genetics business there for the past sixty years — but about 10 years ago, he said during ClimateAi’s recent webinar on turning climate risk into a competitive advantage, the company began to realize that things were changing.
Advanta is Australia’s leading seed provider, and has partnered with farmers around the country to provide high-quality grain sorghum, hybrid canola, field corn, wheat, and forage seed for decades. The success of its crops and the type of management used for them are primarily driven by the environmental conditions of the season before planting, and Advanta had been using the vast amount of publicly available climate information to understand these conditions. In recent years, however, conditions were becoming increasingly unpredictable.
They were lacking granularity, Andrew said, and lacking confidence in their information and decision-making processes. In the seed industry, in particular, decisions must be made far in advance, because seed production occurs 12 to 18 months ahead of planting, while R&D around seed breeding occurs 20 to 30 years ahead of production. In the wake of all the changes they were seeing, they needed something to do something different to help their business survive and thrive.
Climate volatility demands climate adaptation for Advanta’s supply chains
The Advanta team had considered a number of climate products and services over the years to assess how to get better and more reliable information from significant analytic and software providers. But nothing quite fit their need for a seasonal tool that would cover both planning and in-season monitoring, and their wish for a partner that understood their industry and could offer flexibility, rather than an out-of-the-box product that many others were using.
That’s when ClimateAi came along with the technology and support they were looking for. Advanta was finally able to find actionable answers to the questions about climate risk they had been asking, such as:
- What climate conditions could they expect in their fields this season during key windows such as planting, applying inputs, and harvesting?
- What could they improve in planning and managing our seed production crops, for this season, in five years, and in 20 years?
- Where could they test products today that might already exhibit the climatic factors of the future so that they can have confidence that the products will work in the future?
- Would their current seed production locations continue to be long-term sustainable and viable for their business?
- What type of attributes would their products need in the future to continue to be profitable for Australian farmers and international customers?
As Andrew said, with ClimateAi’s tools, Advanta could assess the seasonal forecast at their planned production locations, and combine this information with their risk appetite, so they could alter our production mix by location depending upon that forecast. For example, if a heat wave was expected in one particular location, they might choose to move some production from that location to other less risky areas. Notably, ClimateAi’s tools don’t just say that ‘it is getting warmer’ — they identify ‘how much warmer,’ ‘in what months will the heat be concentrated,’ ‘will the heat happen during the day or at night,’ ‘what will the impact be on the crop in terms of yield and quality’ (e.g. germination), and ‘when the warming will make the climate unsuitable.’
This granularity helps Advanta solve short-term and long-term problems: They can alter crop management as-needed to mitigate these risks seasonally, helping improve growers’ yields and profitability, but if these risks are continually expected in the future, the tool can, for example, identify five other locations for this crop-variety with optimal climates, similar soils and pest/disease profiles, and secure water availability for the next 15 years. Or it could suggest attributes such as the precise tolerances you need to breed into this crop if you wish to stay in this target market down the line.
With ClimateAi, Advanta was able to continually monitor its environmental conditions and where necessary, adjust operational decisions and long-term strategic decisions. The company has already found safer outcomes for our business going forward in this rapidly changing climate, Andrew said.
Ramping up Advanta’s climate resilience strategy to sales and marketing
After building trust using the platform for their supply chain questions, the Advanta team decided to use ClimateAi’s platform to inform some of sales and marketing determinations of where and when they would need seed in certain markets. They had several questions:
- What does demand look like next year for Advanta products? If they are producing 12 to 18 months ahead, how can they better manage our inventory?
- Where should they put their stock to capture and capitalize on sales opportunities?
- What will climate conditions look like for the next seasons in areas they’re considering expanding into?
- Will the geographic markets in which they sell today evolve, and will they continue to be sustainable sales markets into the future?
- If they’re not going to be sustainable longer term, what sort of products does Advanta need to offer so that growers in those regions can continue to grow that crop profitably into the future?
ClimateAi helped Advanta answer all of these questions, and then some, Andrew said. Last year, for example, which was incredibly dry through winter, the climate dashboard had been forecasting that wet conditions will come, but they would come late. Based on that information, Advanta moved additional inventory into a region of Northern New South Wales to hopefully take advantage of the forecast and the planting opportunity that would come off the back of the rainfall.
Thankfully, it turned out that the rainfall forecast was accurate — and by having additional inventory in that place, at that time, Advanta was able to capture an additional 5–10% of sales that they wouldn’t have been able to without taking advantage of the forecast, while also helping growers access the seed they needed to plant in the window of these optimal conditions.
Advanta was able to capture an additional 5–10% of sales that they wouldn’t have been able to without the forecast.
In addition, from a strategic point of view, Advanta can use this information for capital expenditures — if they’re going to be embarking on significant capital expenditure at certain locations, they will run a longer term climatic study in order to understand what sort of factors they are likely to encounter before executing. The team can see how sales territories and production regions are likely to evolve and research products by identifying the likely challenge their crops will face going into the future. They can prioritize where their breeding teams focus and where they might be able to invest in research projects with other partners to try and overcome the challenges of the future.
Advanta also uses the “climate analog” functionality of the platform — which searches the world for similar climate conditions in future years to a desired location — to identify other opportunities globally which look similar to locations they are currently in, which can help find potential export locations. For example, they’re currently involved in a project looking at what is the evolution of the sorghum market in Australia and beyond.
Andrew said that Advanta has developed such a high level of confidence in the product internally that it has, in fact, begun to offer it externally to partner growers and agronomists. “Our thoughts are that if we’re seeing such success, we should be sharing that with our customers so that they can see the benefits and grow their crops more successfully as well,” he noted.
Advanta launched a version of ClimateAi’s platform for them as a product called “SKIP,” which includes a planting tool where growers and agronomists can run scenarios against seasonal risk before even planting a seed. They can input different proposed planting dates, see what type of risks they might encounter through the season, and adjust their operations prior to planting, to improve their outcomes.
No one has a crystal ball, but the level of information that Advanta has been able to generate through ClimateAi has become invaluable to its operations and strategy, Andrew said.
The tool is able to support both their business and the sustainability of food and agriculture by building resilience to extreme weather events and helping them turn climate risk into a competitive advantage.