
While much of the rest of the world of finance has long since embraced digital lending tools to simplify and automate loan decisioning, appraisal, and portfolio assessment, agricultural finance has remained largely analog. Until now.
Today, Growers Edge acquires AQUAOSO Technologies, a company whose software offers two key functionalities for agricultural lenders:
- It automates loan decisioning, appraisal, and portfolio risk management processes so ag lenders can enjoy the kind of lightning-fast processes that have become the norm in the residential mortgage world.
- It incorporates a proprietary climate intelligence model to assess the future impact of weather, water, and other climate events so lenders can not only make smarter loans today but also better spot opportunity and risk in their portfolios.
AQUAOSO Technologies, offering services under the Agcor brand, earned a nod in Fast Company’s “Next Big Things in Sustainability” list in 2021. We’re delighted to be bringing their technology and team on board.
Before we dive into the details, we wanted to extend a hearty welcome to Chris Peacock and the Agcor team. We look forward to working beside you to bring cutting-edge innovation to agricultural finance!
New Visibility and Agility for Ag Lenders
Today, many agricultural lenders undervalue the risks presented by weather, water, and other climate events – in part because they’ve historically been nearly impossible to assess. But with Agcor’s technology, lenders like Golden State Farm Credit, American Ag Credit, MetLife, and others are able to contemplate the likely impact of worsening climate change on land’s value.
As we merge Agcor’s capabilities with our own – including our data models that assess land valuation and predict crop yields – we’ll build out a suite of analytical software that will make it possible for agricultural finance professionals to more quickly and accurately assess risk exposure and identify hidden revenue opportunities in their portfolios. Here’s a look at how.
Land Valuation for a Changing Climate
Traditionally, land appraisal has been as much an art as a science – a blend of agronomy knowledge, real estate savvy, market awareness, and a deep understanding of hyper-local happenings. Increasingly, though, even the most experienced appraisers are up against the big unknowns of a changing climate.
That’s a problem for everyone in the ecosystem, from farmers to lenders to investors – and it’s one that our newly merged capabilities will solve.
Today, Growers Edge data models incorporate map data (aerial, soil, topography, and plat), crop history data, year-by-year images, geographically relevant price trends, and USDA data to offer precise land valuation and crop yield estimates. Our model currently covers 50 percent of all federally insured cropland in the US.
Agcor’s models include soil data, irrigated capability class, surface water, USDA data, and estimates of the future impact of climate events.
Together, we’ll not only merge our models but also add new artificial intelligence (AI) and machine learning (ML) layers to both offer a snapshot of a parcel’s current valuation and output potential and also forecast yields and land values given likely climate events.
Bringing Ag Finance into the Digital Age
The combined data models will be far more powerful than the tools agricultural lenders have today to assess the current and potential future value of a plot of land. But these models alone would have limited utility tacked on to existing ag lending tools.
For maximum impact, they need to be part of an end-to-end lending platform that includes an automated valuation model, scorecarding, reporting, payment processing, and more. And that’s exactly what we’ll be building in the coming months.
But that’s only the start of what we’re bringing to the agricultural finance world. Digitizing valuation and lending processes doesn’t just make loan origination easier; it also gives lenders unprecedented visibility into their portfolio. This means they’ll have a much more precise understanding of the risk in their portfolio, as well as a systematic view of where opportunities lie.
They’ll be much better able to cover their downside and much better positioned to take advantage of upside opportunities. And they’ll be able to do both routinely, without having to rely on chance.
Better Together: The Growers Edge-Agcor Vision
In the short term, our work will benefit from cost synergies like eliminating duplicative tech spend. More compelling, though, are the revenue synergies we’ll see, bringing Agcor’s capabilities to Growers Edge’s established geographies (144 million acres across nine states) and vice versa.
We’ll keep employees from both organizations on board to bring unparalleled precision and efficiency to the farmland valuation space.
This Is Just the Beginning
In the months and years ahead, our vision is to build a suite of data and analytical tools and software anchored by a SaaS platform that’s custom-built for the agricultural finance sector.
Ultimately, the platform will facilitate everything from sales enablement to loan underwriting to portfolio evaluations, setting a new standard in industry-specific loan origination, predictive analytics, and comprehensive risk management.
If you’re interested in digitizing your ag lending portfolio, let’s talk.