Heading into 2023, the global food system is facing availability and affordability crises that have been spurred by supply chain challenges, climate disruptions, Russia’s war in Ukraine, and a related nitrogen fertilizer squeeze. Just the nitrogen fertilizer problem alone is going to lead to a reduction of 216 trillion calories around the world, according to a Gro Intelligence analysis.
“The lack of fertilizer is the most terrifying challenge ahead of us for the next two years,” Sara Menker, CEO of Gro Intelligence said when she sat down with Guy Raz, the host of NPR’s “How I Built This” to discuss why she set up the agricultural and climate change data and analytics company, Gro Intelligence.
Listen to a full recording of their conversation, which aired on December 8th, on NPR One, Apple Podcasts, Wondery or Audible.
The Seed of an Idea: Gro’s CEO on “How I Built This” with Guy Raz
Growing up in Ethiopia in the 1980s and 1990s taught Gro Intelligence’s CEO Sara Menker not to take anything for granted. “When you are growing up and it’s not a world of abundance - when it’s a world of limited resources… It grounds you. It reminds you of what basic necessities are and what basic needs are in this life,” Menker said, explaining how her personal history took her to Wall Street and fostered her interest in building the subscription-based agricultural and climate change data and analytics company, Gro Intelligence.
“I was attracted to [commodities trading] because it was attached to things that are physical and necessary to life,” she said.
Amid the economic turmoil of the 2008 financial crisis, while some on Wall Street were piling into gold, Menker began looking into investing in agricultural land. “It baffled me that every time I asked questions, I got more questions. Or if I needed data, I got data that was two years old,” she said. “I remember thinking, we are just not going to solve these big food security challenges… We were trying to fix a system that we didn’t even understand,” she said.
By 2012, Menker left Wall Street, and after two years of research, she and Sewit Ahderom launched Gro Intelligence, a data and analytics firm that takes trillions of data points from a variety of sources and builds agricultural commodity forecasts that food suppliers, financial firms, and governments can use to navigate climate risk, understand supply models, predict demand for crops, and monitor growing conditions for crops around the world.
According to Menker, the first challenge was assessing what data was available and developing a technology that can ingest that data - regardless of language or format - and standardize it. From there, the next challenge was how to use that data to develop models that can tell people something that they didn’t know. “We started with modeling in markets that everyone understood like corn in the US,” Menker explained, noting that Gro now has 28 model templates that can be scaled up through machine learning and AI in a consistent and defined way.
“[Today, these models can forecast] everything from the demand of pork in China to the supply of sugar in Brazil… You name it,” she added. Depending on the user, the same Gro model is often used differently. While financial firms might use Gro models to trade, seed companies might use Gro’s models to understand how profitable farmers are, she explained. Governments, meanwhile, might use the models to assess the credit risk of farmers and others in the agricultural sector. In the US, Gro’s yield models are predictive and 98-99% accurate up to four to six months ahead of USDA government data. In places like India, Russia, China, and Africa, Gro’s yield models’ lead time is one to two years in advance of official government releases.
It’s About Resilience
Heading into 2023, the global food system is facing availability and affordability crises that have been spurred by supply chain challenges, climate disruptions, Russia’s war in Ukraine, and a related nitrogen fertilizer squeeze.
“How do you plan for this so it’s not an absolute catastrophe when it happens,” Menker said, referring to the fertilizer crunch. The same is true for the climate crisis, however.
To help farmers, businesses, and governments around the world deal with the climate challenges, Gro has built a suite of climate indices covering specific risks - from drought to floods to fires and heat stress - that help users understand how weather translates into climate impacts in real time and in the future.
With this information, users can mitigate risks, Menker noted. Gro’s forward-looking climate models can help users understand the trajectory of the various climate perils that growing regions or corporate assets are up against around the world at the district (county) level.
For major food or agricultural companies some of the biggest risks that they face are around procuring food and figuring out where to invest in a shifting climate.
“Are the areas that grow food today going to be the most suitable for growing [the same food] tomorrow? And where will [growing areas] be in five, 10, 15, or 20 years from now? You would be surprised at how much [growing] areas are going to have to shift based on different climate [change] scenarios,” Menker said.
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