www.ubs.com/investmentresearch This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 18. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Global Research 9 June 2020 Future of Farming Transcript: Precision Ag and Future of Farming Call Series: Online Grain Marketing with FarmLead Significant opportunities exist to improve farmer efficiency We hosted a conference call with Brennan Turner, Founder/CEO of FarmLead, an online grain marketing startup. Our speaker noted that very few farmers (~10%) truly hedge with futures, meaning nearly all farmers are engaged in cash trades. However, the grain cash trade space is largely built on personal relationships, and manually marketing grain, which is inefficient and leaving room for digitizing the process. Moving grain marketing online can lead not only to better prices for farmers, it also can dramatically improve efficiency and save farmers time. Likely to see more hedging as new ventures focus on it Our speaker noted another theme that we have been hearing throughout our call series which is that software can be used to integrate data from various parts of the operations and the market. That data can be analyzed and used to make better decisions. Mr. Turner does expect more farms to hedge, as new ventures focus on it. However, he expects this to be largely autohedging approaches (pre-programmed "set it and forget it" algorithmically driven programs). He also sees an opportunity in commodities that are either not traded or are thinly traded. Demographically, because 60% of farmland will change hands before 2030, younger generations will gravitate towards more technology adoption. Strong crop, weak demand affecting farm incomes and machinery purchases On the 2020 growing season, Mr. Turner noted that planting has gone well, weather has been (and projects to continue to be) largely favorable, and all signs point to a strong crop. However, with demand significantly diminished, grain prices, specifically for corn, are down substantially (noted that the corn cash price in ND is sub-$2, vs $3.20 in the futures markets as of May 27), farm income will be strongly challenged, though gov't subsidies will help ease some pressure. That said, Mr. Turner expects most farmers will not use gov't aid to purchase new machinery as they have in prior years, though they may opt to buy used equipment. Equities Americas Heavy Machinery Steven Fisher, CFA Analyst steven.fisher@ubs.com +1-212-713 8634 Future of Farming 9 June 2020 2 Online grain marketing - Precision Ag and Future of Farming Call Series Host: Steven Fisher, UBS U.S. Machinery and Engineering & Construction Analyst Speaker: Brennan Turner, Founder/CEO, FarmLead We present below the transcript from our recent call with Mr. Brennan Turner. Minor grammatical changes that do not impact the meaning of content have been applied. The opinions expressed by Mr. Turner herein do not necessarily reflect the views and opinions of UBS. UBS accepts no responsibility for the accuracy, reliability or completeness of the information and will not be liable either directly or indirectly for any loss or damage arising out of the use of this information or any part thereof. May 27th, 2020 2:00 PM ET Steve: Good afternoon. Good morning. I’m Steve Fisher, UBS Machinery and Engineering & Construction Analyst. Thanks for dialing in. This is our second call in our Precision Ag: Future of Farm Technology call series. Through this call series we intend to provide investors a view on agricultural technology trends, developments in Precision Ag along with viewpoints on current business conditions. Shout out to my colleagues, Andrew Stott, Michael Leutchen, Luiz Carvalho and John Roberts who cover various parts of the ag business here at UBS. As we talked about last week, a little over a year ago we published a report called The Future of Farming: How Will Technology Disrupt the Value Chain, and one of the things we highlighted in that report was that what’s unique in this industry is that there are companies that are literally almost 200 years old and companies that have been around just in the last handful of years, and how these companies exist and operate together will shape the success of each side and our food supply. In this call series we’re going to feature both newer companies and the 100 to 200-year-old incumbents. Today we are really lucky to have a very unique speaker. We have Mr. Brennan Turner, the Founder and CEO of FarmLead. I’ll let Brennan give you his background, because it’s super-interesting and it puts him really at the intersection of the Agri-business and technology. There are slides for this session. If ...
发表评论取消回复