Macquarie Group is one of the leading banks with their finger on the pulse of the commodity markets through financing, trading, and investment banking operations.<\/p>\n
They also know what areas are attracting new capital…<\/p>\n
Being up close and personal with global commodity companies gives them a big edge when it comes to the future of the sector.<\/p>\n
So, a recent interview with Macquarie Group’s CEO Shemara Wikramanayake caught my attention…<\/p>\n
During the interview, she mentioned other areas the bank is interested in (besides the popular blockchain-based technologies), which gave me even more conviction about an industry that may just be getting started…<\/p>\n
Wikramanayake went on to say, “We’re doing a lot of investing in digital infrastructure, hyper-scale data centers, fiber optic networks, precision agriculture<\/em><\/a>, and in terms of real estate, we’re investing in logistics from online shopping and digital twinning.”<\/p>\n I covered precision agriculture back in late June<\/a> after CNHI acquired Raven Technologies, where I stated:<\/p>\n “These days, most investors are actively searching for the perfect inflation hedge… and precision agriculture not only provides the hedge but has the growth.<\/em><\/p>\n The industry is at the epicenter of all the factors driving inflationary trends forward, such as limited land, declining labor availability, and rising crop prices…<\/em><\/p>\n Investors may want to take advantage of this pullback by considering stocks like CNH Industrial (CNHI), Deere (DE), AGCO Corporation (AGCO), and Trimble (TRMB) for large-cap precision agriculture exposure.”<\/em><\/p>\n<\/blockquote>\n Since then, Deere is up 9%, AGCO is up 11%, and Trimble is up 16%…<\/p>\n We dubbed it as a perfect inflation play because of its growth prospects.<\/p>\n But the growth prospects for this sector may be just beginning…<\/p>\n For example, a small robotics startup called TartanSense just raised $5 million in Series A funding. TartanSense builds agricultural robots that come with AI-assisted computer vision.<\/p>\n But, how does this help farmers?<\/p>\n Well, simply by reducing expenses and improving incomes, TartanSense addresses two problems for farmers – poor chemical spraying techniques and unreliable farm labor.<\/p>\n Their latest robot BladeRunner can “…identify, precisely locate, and mechanically uproot undesirable weeds as well as spot spray on the desired crop – reducing chemical usage by 45% as well as increasing weeding efficiency by seven times.”<\/p>\n This is just one example from a small startup, but this is where the industry is going…<\/p>\n And the fact that venture and private equity capital are funding small companies in this space is a good sign for bigger, more established publicly traded companies that operate in this space.<\/p>\n That’s because when venture capital takes an interest, valuations start to rise, and trickle up <\/em>into the stock prices of companies like Deere, AGCO, and Trimble.<\/p>\n Companies like Deere are focusing heavily on growing their precision agriculture business. This focus will ensure that investors will pay high premiums for the stock going forward… especially with a prevailing view that Deere is a precision agriculture leader.<\/p>\n Aside from the market just beginning to notice this industry, the macro supply-demand picture for the agriculture sector continues to be very bullish<\/a> right now.<\/p>\n\n