The Cattle Range Home Page
November 27, 2017
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Digital Disrupters

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Digital Disrupters
Ag Center Cattle Report

The technology-fueled changes brought about by the development of the internet, bandwidth speeds, connected devices, and e-commerce are moving forward at high velocity speed.  Innovation will lead the change. Some will embrace the change, others will be swept along, and still others will refuse to follow, ignore the changes and slowly disappear.
 
The new digital economy will manage the physical world with data driven transactions and no industry will be more impacted than agriculture. Digitization of all transactions involving the transfer of title and the exchange for money following the buying and selling of agricultural products will undergo a transformative overhaul. The new services will be the key to driving productivity gains for the industry.
 
Productivity gains are not delivered by a faxed or scanned invoice any more than an overnighted check for payment for cattle. Data driven transactions will happen in real time and settlement and clearing will be triggered by electronic notices either email or text followed by electronic money transfers called ACH transactions to quickly settle the trade.
 
In the physical world of agriculture, digitization is already occurring at supersonic speed in farming. Farm tracts are being analyzed down to the square foot to determine nutrient requirements that are applied in variable levels to accommodate differences within the field. Precise plowing and planting is digitized and mapped for tractor applications that will soon be self-operated using accurate GPS coordinates. Seeds are genetically designed to protect and enhance increasing yields free from chemical applications. The results from each effort will be digitized into data to make the next decision a better decision.
 
Raising cattle for beef will mirror digital activity in all other sectors of agriculture. Seedstock choices will be data driven. Individual animal ID will track each health record, performance check points for weight, and finishing performance. The tracking will continue in the beef plant with both in live and carcass data allowing producers to let the information drive their decisions at each fork in the road.
 
Trading in all ag products will move to the web allowing best buyer to find best sellers at every point of transfer. The internet provides transparency and a centralized marketplace where both the buy side and the sell side are always finding the best price for each. Block chains, created by each transaction, will create the foundation for settling futures contracts in a manner instilling confidence of more traders. That confidence will translate into new liquidity in the futures contracts.
 
Payments for cattle will be electronically settled to bank accounts immediately on delivery with both buyer and seller protected against fraud and misrepresentation. Smart contracts for the purchase and sale of cattle will include protocols and standards to drive the transaction. This will include confirming the transaction, identifying the parties to the transaction and spelling out the terms governing the transaction and the steps necessary to consummate delivery and cash settlement. These digital contracts will be available for accounting purposes, audit control, fraud prevention, legal compliance and finally banking authority.
 
At the core of the digital revolution will be security. Transactions, blockchains, and money transfers must be encrypted and verified on both sides of the ledger.  Breaches of computer networks are daily occurrences. Technologies are available to prevent these breaches and data can and will be protected within tolerable risk frameworks. Trust must be present for innovation to move forward and it will be. 

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