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Croptomizing The AgTech Industry With Janie Hanson

BWP 12 | Croptomize

BWP 12 | Croptomize


Farming is entrepreneurship and big farmers are the definition of an entrepreneur because as a farmer,  it’s like starting a new business every single year. You take out a loan to buy the inputs, the seed, and chemicals and fertilizers that you need, and then you plant your crop and then harvest at the end of the year. You get your checks and pay all the bills and pay the operating note. Our guest Janie Hanson lives in family farms and is involved with managing farmland and farming operation. She’s homebasing her company right where their customers are for the Croptomize product that they’re launching. Today, Janie explains what Croptomize is all about and how it’s helping farmers manage their commodity price risk.

Listen to the podcast here:

Croptomizing The AgTech Industry With Janie Hanson

I have an extra special guest, Janie Hanson from Connect the Grey. We’re going to get into all sorts of fun stuff and you’re going to hear some farm glimpse at some of my farm backgrounds. That’s why I’m very excited to have Janie on. Welcome to the show, Janie. Can you explain a little bit about who you are?

My name is Janie Hanson. I’m the Founder of Connect the Grey, which the grey is like the grey matter in your brain. I founded this organization back in 2014 to help bring some creativity to business. It’s connecting the arts and that side of the brain with data analytics tech. The easiest way to describe it is it’s more like an incubator. We’ve launched two separate organizations in the last year. One is the Rural Renaissance Project, a nonprofit organization focusing on sparking entrepreneurial investment in rural areas. The other is Hanson Lahre, Inc. with my co-founder Deanna Lahre that has an AgTech FinTech Solutions.

You live down by Blue Earth?

My hometown is Frost, Minnesota. In my career, I lived out in New York and London. I moved back when I started Connect the Grey into Minneapolis. I live in family farms so I’m still involved with managing farmland and farming operation. I’ve gradually stepped down from Manhattan and Minneapolis to Mankato to Blue Earth. We’re homebasing our company there because we have access to get fiber internet and looking at what we’re doing on the digital side of things. We could do it from anywhere. Why not do it right where our customers are for the Croptomize product that we’re launching here.

That’s what we want to talk about now is about Croptomize. I knew about Croptomize because we’re using the same company to do some of the development. I have a little inside scoop and met Janie one day. I made my dev shop, Modern Logic introduce me to her and they gave me your email address.

I start up the Modern Logic tour but with other great entrepreneurs. There are a lot of fun connections around the office there.

You have to plan ahead to manage your risk. Click To Tweet

Let’s talk a little bit about what Croptomize does because some people are going to be a little surprised about the application of technology where you’ve applied it and what they don’t know about the AgTech industry.

Croptomize is the engine behind it. It helps farmers manage their commodity price risk. It’s taking the big data, AI analytics tools that all the major players that are using in agribusiness and making it accessible for small family farms or farms of any size. It’s bringing the power of technology and making it user-friendly mobile apps. When you’re out on the tractor you can still get it. It helps farmers with when they should be selling their grain as to timing on the market because the counterpart markets are always changing. Just for context, the average-sized farm is about 1,500 acres. For an average corn farm, any cent movement in the market translates to $3,000 of revenue. When you hear about the market swings, we’re talking some big bucks.

For anybody that hasn’t dealt with the commodities market before as Janie and I were talking and preparing for the podcast, one of the things that I thought was interesting about what they were doing with Croptomize was because I came off of a farm. I understand the price swings and the volatility. I might manage my stock portfolio. I put in a limit price. I want to sell so many shares when it hits a certain price or I want to buy so many when it hits a certain price. What you’re doing with commodity pricing reminds me a lot of what most of us are used to in terms of what we might trade our 401(k) account or other types of accounts that we have.

My first job out of undergrad was working in the energy industry. I got a great exposure to all aspects from energy trading, power plant development and management and I saw how much data is there, how you make decisions, how you plan for not knowing what the price is going to be at any given time, but you can still know that if the price is this, then I do this. It all comes down to the decision, “Do I buy, sell or hold?” It is quite simple. A lot of complex information and variability that’s why we use a statistical analysis to help plan ahead to manage your risk.

I remember growing up on the farm and harvest season, they’re gone all day. They’re literally up before sunrise going to well past after sundown. It’s getting the harvest so there’s a lot of time pressure there. I remember my dad would come into the house and either be the trips back and forth to town and selling whatever or storing whatever. He would come in and he would hand my mom this pile of papers and there were all different numbers and it was chicken scratch every time. Talk more about the process of what it looks like for farmers when they’re selling and how this industry works. Not the pretty version but what happens in the day-to-day life for a farmer as they’re trying to manage all this. 

It’s interesting because there’s a ton of technology especially in precision agriculture, giant tractors and auto steer and all sorts of data that’s coming off of farms. The key decisions and the financial decisions that you have to make, a lot of those are still quite manual. You could manage and a number of farmers do in the back of an envelope, paper on paper and spiral-bound notebooks. That’s what my dad used for many years until my mom started putting it onto the computer and ran two sets of books. I was like, “That’s easy. I can get my cashflow and print it off and take it wherever.” For selling grain, there are numbers of ways to do it. There quite a few farmers that will deliver at harvest. They’ll go to the elevator or ethanol plants and you take whatever price that’s available which happens to be the lowest price because everybody’s doing it then.

BWP 12 | Croptomize
Croptomize: A lot of the key decisions you have to make in farming are still done manually. You could manage from the back of an envelope, on paper, and spiral-bound notebooks.


The next step up in that is doing what’s called a Hedge-to-Arrive. With the Chicago Board of Trade, the futures market, you can say, “I’ll deliver X number of bushels at this date in the future. That’s where the name futures come from. You can do that with the local elevator or processing plants and say, “I’ll deliver 20,000 bushels in December,” and they’ll give you the price. They’re the ones making that transaction with the Board of Trade and managing what’s called the basis, which is another function of distance. It’s the pricing mechanism for the local supply-demand. That usually happens over the phone and then they’ll mail you a contract and you sign it to say, “Yes, I agree to sell these many bushels at that price at that time.” Fast forward to harvest and you start delivering stuff. If you have an onsite store, the grain bins, you put it all in there and then that gives you more flexibility to deliver in January or February when you’re not out in the field.

You take some of loads of grain and with each load of grain they’ll give you a ticket and it tells you how many bushels. If you got docked for foreign material or moisture content or other grain quality things or you get a premium that you’ve done a good job. You’ll get that little tickets. As you’re hauling numerous loads through the day, everybody’s getting their growing stack of tickets and then bring that into the shop in the evening. Add up how many bushels did we deliver, how much is left in the bin and try to guess how many more loads you’ll need to do tomorrow to fulfill the contract.

As you said, a lot of the tech that we hear about in ag has been about precision technology. Auto-steer for my tractor or be able to relieve some of the productivity, you’re measuring the fields and you see drones and spraying and just all these various things. You’re in a different part of the process that hasn’t been as optimized yet. Talk me through a little bit about where did the idea come from to even look at this monster because you know how manual it is. Where did the idea come from and what did you guys do from there when you had the idea?

It came from decades of sitting around the dining table and with a farm family work-life balance is all of the same things. We were talking about the markets. I learned how to calculate depreciation. There were even like Christmas shopping when you go to Fleet Farm because there are items with the magic words, it’s deductible.

Doesn’t everybody shop for Christmas at Fleet Farm? It was pretty normal in my childhood too.

It’s very helpful seeing what’s the decision points and how those decisions are being made, what points my parents stressed or those conversations happening? Growing up with that awareness and I’m always curious to know how things worked. When the groundwork for the Croptomize product was when I moved back and started helping out after my mom passed away because she did all the financial aspects of the farm and my dad said that it was great that she was taking care of all these things because he could focus on the farming.

The times when the markets are active also happen to be the times when farmers are out in the fields. Click To Tweet

That’s why a lot of the innovations in agriculture have been on the equipment and the agronomy side because it’s ag machines, they’re fun to drive. It’s tangible. You can see the crops in the field and see that cause and effect relationship. That’s what farmers are good at. They’re agronomists. They know soil health. They’re good at growing crops. Trading is a completely different skillset. There are traders that are spending all day, every day at a computer. The times in the markets are active also happen to be the times when farmers are out in the fields. I was looking at and paying attention to the times when my dad would be calling and saying, “Here’s what the yield is looking like, how many bushels do we have contracted now. How many do we have left to sell? The bin is getting full. Should we deliver some in there? What were some of those questions and decision points that were coming up?”

In the financial side, we went from having one cashflow and my parents had the farming business to have my dad, my brother and I all involved as separate families. Coming from the energy finance world and doing major Excel models and underwriting and things like that to going back and saying, “Do I have to build something from scratch for this? Are there any tools out there that help with some of the accounting and financial managerial decision making?” I couldn’t find anything so we built it.

It’s a lot like my story and I couldn’t find a productivity tool that worked the way my brain thought. Integrating it, to-do’s in the calendars and meetings and an all in one place. It was very similar to me. It was like, “At a certain point like fine, if I can’t find it I’m just going to go build it.” I would like this problem solved, seriously. It’s a very similar story and you’re right about where is the application of technology historically been? Before the podcast, we were talking a little bit about, my mom will walk me through the Certification for Crop Insurance every year process and I just want to cry when she described what she has to do. It’s so paper-based. It’s so manual and how much running back and forth has to be done and they have to get the crop insurance. There’s no choice so you look at how many AgTech. There are so many places like this that are just ripe. There isn’t anything. You’re seeing more and more investment in AgTech. Speak a little bit more to your vision for Croptomize. Where you’re starting and where you’re heading.

Where we’re starting is a simple app that helps bring in the local prices. They’ve got the Chicago Board of Trade prices and those are updating constantly and then there’s the local basis, the adjustment in price. For cash grains when you’re delivering locally, it’s important to know that. All of the data’s out there and available but it’s on websites. As me paying attention to my dad and as he entered the smartphone era. You’re seeing him check the weather on there, ESPN. He’s even watching the games on his phone now. When it came to checking prices, it was at these different websites or having to call in somewhere and see if there was a price push. It was seeing how that incorporation of technology for my dad’s generation and then for my brother and I and people in our generation. How can we make some of these more convenient? One of my mentors who are a big farmer in Illinois said, “There’s somebody who can follow around,” and every time I cuss, it’s a problem that we need to solve. There’s a lot of things that come out from the outside. It seems like they would be a great innovation and super useful.

It doesn’t solve the problem or you cannot get those core needs for what they have. The app just launched.

You can find in on the App Store. It’s Croptomize.

BWP 12 | Croptomize
Croptomize: Big farmers are the definition of an entrepreneur because it’s like you’re starting a new business every single year.


Where would you like to be a year from now with this? If everything went exactly the way you wanted, what would a year from now look like with Croptomize?

The Croptomize app will have the pricing on there. We also have what’s called the BS checker. There’s a lot of hype in the markets and especially when the price starts going up, “It’s going to go to $5 or $6.” We’ve got what’s called the Croptomize frame. It’s a statistical, the white lines in the market. 95% chance the price is going to be between this and this. When somebody says it’s going to be $5, it’s a minute percent chance. If you want to do that, we’re not saying it’s not going to where I couldn’t go there but know your odds. If it’s the vaguest odds, you are literally betting the farm.

You should know that because it’s true in the farming industry. Are you ready for the trolls that don’t like the fact that you are going to share statistics and real data about what the markets have done? Talk about how much data you have.

We’ve been gathering the data for over 40 years. We have all of the pricing data. The Croptomize app we have for corn, beans and wheat right now. We’ll be adding other commodities as we go. For corn, beans and wheat, we have the actual data including weather and other trading-related data all the way back to the ‘70s. Your decisions are made year to year. Big farmers are the definition of an entrepreneur because it’s like you’re starting a new business every single year. You take out a loan to buy the inputs, the seed, chemical and fertilizer that you need and then you plant your crop and then you harvest at the end of the year. You get your checks and pay all the bills and pay the operating note.

It’s a long-term business model as well. My family’s fourth generation farmers. You’re looking at decades and there are big swings in agriculture so like ten-year cycles. If you’re only looking a couple of years back, you might be missing a lot of doing that sanity check of under these conditions. Is it a wet year? Is it a drought year? What was the world supply demands like? What were the major players doing? I’m looking at some of these relationships in the market. The beauty with now we’re computing is non-dense and the data analytics, the AI. You can feed a lot of information into the models. It’s nice as it doesn’t sleep and it doesn’t forget. AI is watching the markets for you.

When I was growing up, it was all eyes on what’s going on in Brazil for soybeans and other things. The idea that you can allow a farmer in Minnesota to monitor what’s going on around the world. As the whole global ecosystem changes and different things are growing in different places. There are different initiatives to do things to just even allow people to be able to see it with new eyes and new contexts because there’s more information than ever before. It makes your brain want to explode. There’s no way a human brain can account for all of that. The sheer number of factors that have changed and become infinitely more complex is incredible. I remember when I was younger in college and I’ll be like, “My dad’s a farmer.” I didn’t realize he’s an entrepreneur. It didn’t connect the dots. He never called himself that. He never used that language.

Mother Nature and the markets don't care what your cost of production is. Click To Tweet

Sometimes when people are like, “How’d you get to be an entrepreneur?” I’m like, “My dad’s one,” It’s like, “What’s he do?” “He’s a farmer.” People don’t always connect that. They’re like, “That’s not an entrepreneur.” I’m like, “No, you don’t understand. They are. Every single one of them. You wouldn’t believe.” They have to run their own businesses. They’re no different than another small business owner. In fact, people might be stunned to know the dollars’ involved. With a small business owner, we were talking about $300,000 plus to buy a tractor. Their input costs are gargantuan. Speak a little bit about what’s been happening in the Ag market for the last couple of years related to their balance sheets and their P&Ls. Speak a little bit about what’s been happening because I think what you’re building plays into that.

30 years ago, Brazil grew almost no soybeans. This year, they grow the same amount as the US and Russia have opened up millions of hectares. The world’s supply-demand is changing. Back in the late 2000s, the prices went up high. It was about the time the ethanol boom kicked in and there are some other factors as well, but the prices went up. The prices went up and they stayed up for a couple of years. What that does is it brings on more competition. There are marginal acres that become profitable. They opened up new acres in other locations. It’s raised the competition. I was looking at some of those big factors. Now, the prices have started settling back down to what is more in the long-term normal which feels a lot lower than it did a few years ago especially for some of the younger generation. If they grew up in those years, farming looked pretty good for a while and you can upgrade your tractors and hopefully pay down some of the land notes and things like that.

The margins are tighter again which makes it all the more important to pay close attention to your cashflow. Where are you at with your leverage? What we’re doing with this is making it easier to run some of those scenarios. You coming from the underwriting energy finance world, if prices are high, what does that look like? If prices are low, what does it look like? If our production is high, what happens? If it’s low, what happens? You can run some of these scenarios. You don’t know what the answer is going to be because Mother Nature and the markets don’t care what your cost of production is.

It helps you be more aware so that you can react to whatever happens that you know in advance. That helps take some of the emotion out because as prices start going up, “I’m making good money now. Should I sell or is it going to go up higher?” How to get off the fence, lock it in and make money. If you got an opportunity a couple of years out because there are three years of futures on the board. I know, I’m going to be planting corn and soybeans next year to lay out a little bit. You’ve got that item locked in on your cashflow, your banker is happier. You can do some more planning.

It’s a more sophisticated scenario analysis and it’s no different than what we might do in revenue projections. I’m going to have these many customers that generates this much revenue. It’s like, “I’m going to have these many bushels. It’s going to generate approximately this much revenue.” How much of that do I want to lock in? Because that’s a contract so I have to fulfill it. That’s the additional part. There are these whole other dynamics at play as well. The idea that you have a staggered series of contracts and it makes it easier to understand what happens to help them be more profitable. Just because of the whole economic change that we’ve had in that market.

Now, more and more I hear land costs. In the Ag industry, the input costs went way up. It’s no different than everybody else we’ve seen like big healthcare spikes and other costs. Food is a volatile one as well. Food cost may go up quite a bit. The average person definitely feels those. The farmer has those and the fact that land prices went up and so their fixed costs have gotten pretty high in terms of what they can do. They have to manipulate whatever leverage they can. In order to increase revenue just like you or I might go pick up a side hustle.

BWP 12 | Croptomize
Croptomize: In farming, you got to be in the field because your entire income for the year depends on that.


A lot of farmers and farm families that do farming and sell crop insurance or drive a truck.

It’s not as common now that the spouse stays home and takes care of the books. What you’re talking about, my parents are in exact same situation. My mom ran all the books and my dad did the farming. They both divide and conquer. She was good at that. For my brother, it’s different. His wife is a teacher. You get into it if the economics have changed. It’s interesting trying to run that small business. We think we work hard but look out.

It’s a roller coaster and there’s a lot of ebbs and flows with that. On spring and fall, it’s all hands on deck 24/7. That can be hard for people who haven’t had exposure to farm business before to understand like, “You just plant something.” “No. Mother Nature doesn’t give me a schedule.” When you got that window, you can be in the field. You got to be in the field because your entire income for the year depends on that. It’s not a salary, I get my paycheck every other Friday. You got to plan and make it work.

This has been absolutely wonderful having you on the podcast and getting to talk about farming. People would probably be surprised like, “You grew up on a farm?” People don’t even know that and then I break that out. How do people find out more about you and follow Croptomize? How do we do all that good stuff?

Our website is We’re also on the social media platforms, Twitter and Facebook at Croptomize.

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