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In this No-Till Farmer podcast, brought to you by Bio-Till Cover Crops, Mike Lessiter, president and CEO of Lessiter Media, sat down with Pivot Bio CEO Chris Abbott to talk about the company’s approach to researching and manufacturing biological nitrogen products, and Pivot Bio’s commitment to creating products that help no-tillers and strip-tillers maximize their ROI with crop nutrition.
Abbott also discusses Pivot Bio’s decision to move its headquarters closer to farm country and the reason behind expanding its distribution beyond seed dealers to ag retail as a segment.
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No-Till Farmer podcast series is brought to you by Bio Till Cover Crops.
Bio Till cover Crops, a pioneer and leader in cover crop seeds, represents a complete lineup of seeds suitable for use in diverse soil types and growing conditions. Our focus on cover crop and regenerative forage seeds sets us apart from suppliers invested in other markets. Dealers in our distribution network are committed to your success by providing local resources, education and guidance to ensure you have the correct foundation for success. With over 50 years of experience in production, processing, packaging, and shipping, you won’t find a better fit for your farm.
Full Transcript Coming Soon
John Dobberstein:
Welcome to another edition of the No Till Farmer podcast brought to you by Biotill Cover Crops. I'm John Dobberstein, senior editor of No Till Farmer. In our latest episode, Mike Lessiter, president and CEO of Lessiter Media sat down with Pivot Bio CEO Chris Abbott to talk about the company's approach to researching and manufacturing biological nitrogen products and Pivot Bio's commitment to creating products that help no tillers and strip tillers maximize their return on investment with crop nutrition. Abbott also discusses Pivot Bio's discussion to move its headquarters closer to farm country and the reason behind expanding its distribution beyond seed dealers to ag retail as a segment.
Chris Abbott:
So everything we do starts with nitrogen. Our solution, our foundational technology is using microbes to fix nitrogen. The gory details there, we use modern gene editing technology to amplify the amount of nitrogen that a microbe native bacteria in the soil can produce. So it is essentially the same as Haberbosch when you think about the process of taking atmospheric nitrogen and converting it to plant available nitrogen ammonia. The microbes can do that. And so we use gene editing techniques and some of our formulation technology to today about 20 to 25% of the plants need in corn, wheat, and cotton can come from our microbes and that number continues to creep up every year or two. We're on our third generation corn product and our first generation cotton, wheat and sorghum products.
Mike Lessiter:
And tell me about the relocation of the headquarters here to the Midwest and the whys and how's behind
Chris Abbott:
It. Sure. So as you mentioned, we recently announced we moved the headquarters to the Twin Cities from Berkeley, which is where we had been based. A business is about 15 years old, been on the West Coast ever since. And then we just recently announced just in the last couple weeks movement to St. Louis and the St. Louis area. And so there's two differences, we would say, centers of excellence there. The headquarters, which is here where we are in the Twin Cities, is what you can imagine. Multifunctional, lots of groups here. Management team, most of the management team sits here. And this was a place for us in Minnesota's deep and enriched food and ag history that was a no-brainer. The thing that Minnesota and St. Louis share for our team members is we're probably a half hour away from a customer in both locations. So we got to take our technology, our people, and bring them right to where the customers were in the Midwest.
In addition to both places, St. Louis and Minnesota have a rich partner set. So when we think about the grain industry, as we think about ag distribution and our partners, our crop input and technology partners, St. Louis and Minnesota are by far and away the most dense in terms of those partners. And then St. Louis is where our lab and our shipping happens. So building a lab in the 39 North building there by the Danforth Center. And then in Hazelwood where we have our manufacturing, that's where we ship all of our products. So we ship out of Hazelwood, we would say St. Louis for lack of a generic term. We ship out of St. Louis everywhere in the US and soon to be Brazil, we'll ship out of St. Louis and we can get to basically every acre in the US and 24 to 48 hours out of that facility in St. Louis.
So it gives us a great place to have people near our farmers. Our people are near our customers, but it also gives us geographically a great place to be by our partners and our customers so that we can serve them better.
Mike Lessiter:
You'd mentioned that there's no better place really than St. Louis to be close to most of the agriculture in this
Chris Abbott:
Country. I think probably Vadness Heights where Land O'Lakes is furthest north, but you go from Land O'Lakes to Cargill to CHS to General Mills. You keep moving down Bayer, Bunge. They're all ... Bunge's down down in Chesterfield. Bayer and Bunge are two great investors in our business already. To have everybody together in that ecosystem with a short hour flight between allows us to be pretty efficient. And the magic of having customers 30 minutes away is pretty cool. We saw it firsthand here. Last July, we did our first ever investor day and we had a customer and distribution partner, a Becks dealer just south of St. Paul say, "Why don't you host it on my farm? I've got 12 trials going. I'll show you exactly how I use it, what customers have experienced." And so here we go. We get to bring 200 of our employees and our investors and partners out and get to see it on a farm.
That's pretty cool.
Mike Lessiter:
One of the things that we were talking about briefly downstairs is how not only you don't have to build the Haberbosch facilities were very time consuming, but you've also helping control some of the volatility with some price lock in.
Chris Abbott:
Obviously the last two months with the Iran conflict, it's sort of on top of mind or on the tip of everybody's tongue. But what we had actually done the last two years is taken price down 30%. One of the things that guide us, and you see it around the office here, our goal is to improve lives of farmers, full stop. So how do you do that? You've got to put your money where your mouth is. And as a private company, we get to be flexible and make longer dated decisions. So what we did is we had taken price down in 25 and into the 26 season that we have just ended. But in the middle of it, you have the Iran conflict. And so we decided, you know what? We have great fertilizer partners and we're gathering Intel and we said, "This is going to be probably more painful longer for the US farmer.
We've got to do something about it. That's against the backdrop of tighter farm margins if February feels like a long time ago, but in February, you would have remembered tightest farm margins since the 80s. Take the largest input expense crop attrition up 100%, that's a problem." And so we said, "Look, we can't control that. One of the things we can control is our own price." So we took our price down about 15%. Being a business driven by technology where our marginal output cost actually goes down. So an extraction business or a high cap X business, you don't have that ability, right? You have that nut you always have to cover and every marginal production becomes slightly more expensive, especially if it's an extraction business. Ours is very different, very capital light. And so we passed those savings and we've been doing that the last two years for farmers.
And we said, "That might still not be good enough. We're about 60, 65% cheaper than synthetic nitrogen at that point in time. This is called four weeks ago. And we said 27 is going to be dangerous for farmers as well because you'll have the whole year on a higher price, 27 over 26 rather than just the tail end of the season. Invasion February 27th, we're sort of tail end of fertilizer buying for this year. Well, 27, the entire volume of fertilizer purchase could be affected. So we said, let's lock in that price. That 60 or 65% cheaper now guaranteed at that price. So as we say, price and supply assurance program, 26, 27, 28, three year lock. And so we're trying to take, to your point, the volatility out, trying to give farmers a better sight line our customers on what that can look like.
And I can tell you in the first couple of weeks, we have hundreds of farmers that have already signed up for it. So to me, that feels good. It's like, okay, we gave something that farmers really wanted even at kind of an awkward time tail end of a fertilizer cycle, they grabbed onto that heading into 27. So it gives us good momentum to serve our customers. We have some visibility on what we need to do to serve them, but certainly to your point, gives them visibility on, I get to lower my fertilizer expense holistically and I start to get some dampened volatility in my pricing heading into 27.
Mike Lessiter:
Could you tell us about the results that people are seeing with your product out there who are giving it a shot or given and doing it right and what the opportunity is out there?
Chris Abbott:
The thing you just said that's most important is doing it right and we learn the hard way how not to do it. So folks that do it right now follow what we call our BMPs, our best management practices. That could be as simple as how to handle the product, what to tank mix it with and what not to, or how to use it with your broader crop nutrition program. We learn the hard way where if you let a customer or you let a distribution partner use it if left to their own devices with new technology, they may not use it the right way.
When I first started here a couple years ago, we went back and mined the data said," I want to see our win rate with our customers. "Because I had heard the negative things about Pivot. I was an investor and so I got to see, well, what'd we do well and what would we not? It's about 56%. That actually logically makes sense. You give a farmer something new, half the time it works well, half the time it doesn't the first time. So 56% that logically passed my smell test. And I said," But what? Why? Why did they lose? "Because a microbe doesn't know anything different. Our microbes are gene edited to only fix nitrogen and spoonfeed it to the plant on the root. They're not affected by weather with leaching or volatilization. They just deliver it. So how can the wind rate not be higher? Well, what we learned is nitrogen wasn't the limiting factor for yield in those cases where win rate was a loss.
And so we had to go back and say, what causes that? Number one, total applied rate of nitrogen. If a grower doesn't need more nitrogen, don't buy our product. I just said that 30,000 acre customer wanted to buy our product late in the year this year and I said," I'm not selling it. We're not going to sell a product to somebody that doesn't need more nitrogen. "Now some customers say," But my nitrogen that I bought is volatile and I need an insurance policy, or I need to figure out how to get more of my total nitrogen across all my sources to be more applied in season. "So maybe that's a shift from anhydrous in the fall to something in the spring or they're coming out during weed and feed or maybe they're already in the spring and they want to add a Y drop. We need to help those growers get the best of the total nutrition program.
That's our product as well as what are the best synthetic nitrogen sources and timing that they can apply that. And we had to learn that the hard way. So now when we set a customer up for success, we tranche our win rate. Maybe you're only taking 20 pounds off because you're super efficient or you're using more efficient sources and season nitrogen versus fallen hydros. You're going to lose more or less depending on what you pick. Maybe it's 30 pounds, maybe it's 40 pounds. The thing that we saw that was really cool we published this data, if we look across the board, whether you took off 20, 30, 40 pounds of synthetic nitrogen and used our product, you still saw on average a two bushel lift in each one of those. That means we know how to place the product to find that delicate point of where is synthetic nitrogen losing, meaning it's volatile or ours stacked on top of it found that perfect response point of nitrogen to yield.
And so you get to dial in that efficiency of the broader nutrition profile. What we then went back and now is a part of those best management practices is we said," Well, what was the ratio with sulfur? How about potassium? How about some of your micronutrients? "Because we know that if you start force feeding that plant nitrogen on the root system, it now needs those other nutrients. I can't force feed you bread all day long and hope you're healthy. I've got to give you protein. I've got to give you water. I've got to give you things that make you healthy. A plant is no different. And so we had to learn the hard way of, well, gosh, if we had more nitrogen, now the sulfur ratio is out of balance. Okay, we got to dial up sulfur. Okay, we need to manage potassium and iron and boring and manganese.
Things are important for nitrogen uptake broadly and nutrient use. And when we do that, now you're not talking about two bushel advantage. We're seeing folks that are two, eight, 12 bushel advantages. In a metric we track and publish on our website when our customers share data, NUE, total synthetic nitrogen applied divided by yield. As I say, those numbers don't lie. You can call me on my bluff. I can call you and say," Hey, you're more or less efficient than I am. I'm just going to give you that ratio and then we can unpack why. Does soil type matter? Does yield gold matter? Does your source of nitrogen matter? Yes, because you can see how those affect your NUE, your nutrient use efficiency. And so we've really tried to dial that in and so now you've seen in two years the wind rate went from 56% to 90% and that's where we think it needs to be, just like seed chemistry and other technologies that we perfect over time.
Mike Lessiter:
We've been told that the no-tillers are adopting biologicals at a faster rate than the conventional farmers. Does that seem accurate to
Chris Abbott:
You? I don't have a stat to prove that. My intuition tells me that's right, mainly because a lot of those folks have had to think more systemically, systematically about the whole picture. If I'm no-till, I'm thinking about and seeing an effect of soil moisture holding capacity. I'm thinking about timing of applications. I'm thinking about soil health. None of those things say, oh, I'm better or worse with nitrogen or phosphorus, but I'm maybe a more progressive brain thinking about my whole system differently because I have to. Probably why I've elected to go that way for my farm operation if I'm a no-till or strip-till or whatever I'm doing. And so they're thinking systematically or they're thinking about the whole picture, not just one element. And so by definition, you're thinking about biologics, you're thinking about new technology. And so yeah, I think you're probably right. I don't have data to prove it, but my intuition with thousands of our customers, there's probably some correlation there.
Mike Lessiter:
Is there anything different that the no-tiller needs to do in successfully using the product versus anyone else?
Chris Abbott:
It actually works really well, right? Because if you think about building that soil health and that profile, you think about what some of those really good no-till guys are doing, great water retention, water holding, they're building organic matter. They're thinking about biologic activity in the soil. That's a happy place for a microbe to live, right? They're going to mineralize at a high rate. They're probably already more efficient on that NUE scale. To give you an example, a lot of customers come to us. They're in that kind of 0.9- ish NUE, so 0.9 pounds of synthetic nitrogen. I'm peanut butter spreading all sources and hydrosuri. Obviously they're a little different, but it's generally about 0.9 when I take their total rate divided by their yield. Our best customer last year that actually applied, we have some folks that don't apply any synthetic, just some manure in our products.
But if we just say synthetic with some manure credit, that kind of top decile performer is like a 0.4. So that's half the synthetic nitrogen applied. You look at a year like this year where you're talking 75 cents to a dollar a pound per nutrient pound to nitrogen. If I can save what's half of the average in the US, probably 80 pounds, right? Say is 160 pounds and on average in the US, 80 pounds less if my NUE is twice as good, 80 pounds times 0.75 or a buck, I'm saving 60 to 80 dollars pure profit per acre and my yield is flatter up. So that's a pretty powerful lever and that's what we're excited about because I'm not here to tell someone to use more or less synthetic in the absolute. We've got to look at the whole nutrition program because maybe they're nitrogen limited, maybe they're in sandy soils and they're prone to loss and heavy leaching down in Arkansas, making it up in corn and we need to keep marching that nitrogen there in season when the grower needs it, but we've got to dial it in.
If we look objectively at what back to our 4Rs training and we look at the other nutrients in balance and say, "What's the most efficient way to produce a crop and let's focus on margin, not yield at all cost?" There's some pretty powerful solutions out there and this year is a good wake-up call. A lot of folks tried some things and realized, "Wow, I can get away with making some pretty drastic changes for my operation and it really affects my bottom line in a positive way."
John Dobberstein:
Biotill Cover Crops, a pioneer and leader in cover crop seeds represents a complete lineup of seeds suitable for use in diverse soil types and growing conditions. The focus on cover crop and regenerative forage seeds sets Biotill apart from suppliers invested in other markets. Dealers and the company's distribution network are committed to your success by providing local resources, education and guidance to ensure you have the correct foundation for success. With over 50 years of experience in production, processing, packaging, and shipping, you won't find a better fit for your farm than with biotill cover crops.
Chris Abbott:
We have a ton of farmers that are no-till, strip-till, or conventional till that use biologics that share their learning experience. One of the things we did, and so when we launched, when I was referring to our website showing our performance data, if you go to pivotbio.com/provenit, proven not like I'm proving it, but proven like our corn brand name, proven it. When we launched our certain, our first gen cotton product and Proven G3, the third gen corn product this year, we said, "You know what? We can give it to our great university partners or CROs, but farmers trust farmers, to your point. Let's go. We have thousands of customers. Let's go to them and say, Hey, this is how the product works. Here are the best management practices. Can we do a demo, commercial demo on your farm? We want real life farm fields. We'll take your data back.
We're not going to put Chris Abbot farm on it. We'll anonymize it, but it's going to say, Hey, I'm in Boone County and here was my farmer standard practice I used, in this case we'll say it's, hey, they're corn farmer. I've used Proven G3. We have agronomist notes for that field. The agronomist that walked the field with the customer, here's what happened, maybe here's what the synthetic program was or maybe here was the weather during the year or hey, maybe they got nailed with some fungal pressure, which happened a lot in the Midwest. Here's what happened, here's what we did, here was the result. And all that data is published because that education is key and farmers want to share that, right? They want to help people that want to be like them or they want to help people that want to adopt new technology to your point, a lot of your customers and readers I'm sure are the same way and that's a huge benefit for us.
We have thousands of farms in the United States sharing that data back. That helps them educate when I just mentioned to you, "Hey, is your sulfur and potassium ratio in balance?" I'll tell you two years ago, most guys were saying, "I'm kind of 12 to one nitrogen to sulfur." Clean air standards, all these other things. I'm worried about how much sulfur is actually going to get into my crop. I'll tell you, I just left a almost 14 state tour this spring seeing hundreds of customers across our main states that we serve. I'll bet the average corn farmer on the high end, those high yield folks are six to one. That's double in two years the ratio improvement, 12 to one, six to one nitrogen to sulfur. We're mining that data so that when we sit down with our customers, we can say, "How can I help you?
" I don't sell sulfur products. Okay, I don't care which one you use. I just want you to be successful. And if I've learned something from the world's best farmers and they want to share those stories, great. I can help set you up for success. And so on the back of that, we launched a digital product. We have a Copilot tool that launches this year and it's all about that education that people are learning what they're trying, where did we do well? Frankly, where did we screw up? If we're not willing to say, "Hey, where did we screw something up and how did we fix it? " We're not going to get any better. And our best ideas come from our customers. Our third gen corn product was a formulation that was basically cobbled together by customers at one point and they brought it to us and we spent three years then actually building a real product, but the properties and what the customer wanted was told to us by a customer and we went and built it and then you get that 90% win rate, essentially the Gen two proven 40 product we don't even sell anymore.
They all switched to G3. Well, you actually delivered a customer a product they wanted, they asked for and so that's pretty powerful to be able to do that. Is
Mike Lessiter:
There anything else that I haven't asked you that you'd like to take the opportunity to share this as a podcast or video product?
Chris Abbott:
I mean, the thing we are super psyched about is there's a lot of growth for our business that we're trying to manage. We added ag retail as a segment. We should talk about that because we used to be seed dealer only. So the retail thing is important, especially as you're thinking about nutrition and then we should talk about in 36 months we're launching a product that's probably double the rate of nitrogen fixation. So now you're not 20 to 25%, you're 45, 50% of that plant's nitrogen need is going to essentially come from itself, feeding the biologics on the root.That's huge. If we can deliver 40 to 50% of that plant's nitrogen on the seed, whether that's a upstream or downstream seed treatment or a dry treatment, going into the center fill planter or box to box or a liquid in furrow, think of what that could do for a farmer in terms of variability of performance shrinks because that's 50% of it is now non-leaching nitrogen or the cost has come down.
If we have another geopolitical event now, half your fertilizer can be bought at 65% less nitrogen fertilizer at 65% less, that'd be awesome. I mean, the good that could do for a farmer and then what do you pair that with? We have great partners. I bet we'll have a half a dozen partners in 36 months that we sell complimentary products to deliver a solution to a farmer and I hope we make a hell of an impact on their both bottom line and efficiency, but also keep driving that yield up. And our data, our trials of some of these products is enormous. I mean, we're talking about 10 to 20% yield gain and using less total inputs. We just got to figure out how do you do that so it's a bulletproof at scale for every farmer to use and not, oh, it only works on one farm in one place with one weather condition.
We feel like we got a shot. And so we are just super excited about what's coming down the pipeline.
Mike Lessiter:
How recent is the ag retail distribution?
Chris Abbott:
Yeah. So we launched ag retail essentially in the last year. We had this natural tension in the marketplace. Pivot had never worked with retail, which was a mistake we made as a company. And when many of us came in a couple of years, we said, "Look, this is crazy. This is not an either or." Our seed dealer and our independent reps have done a fantastic job, but why would we pit them against each other with our retail partners, many of which we've worked with over the past. And so we said, "Look, everybody should be able to use this product." Seed dealers, they think about it differently. You're unlocking genetic performance, right? You're driving more margin in that bag. You're really capturing what my seed brain thinks is possible. And that's great. You set them up for success. The same thing is true, but from a different angle with ag retail, they already sell fertilizer.
They sell integrated crop nutrition, meaning they sell solutions. They don't just say, "Hey, come buy my UAN. I'm not going to sell you anything else." They sell you your nutrition program, your fertility program. Why wouldn't we slot into that? Our growers that are most successful use our product with the most efficient source and timing of synthetic nitrogen and they nail the ratio of macros and micros around nitrogen and they blow the performance off the chart. Well, what better way than to sell with where they buy all that stuff. And so we added ag retail and I'll say the places where we have ag retail and reps, it is awesome because now they're all solutions architects for that customer base. Oftentimes they're buying from both of those parties and now you start to see the flywheel of innovation and momentum changing. The retailer starts to push the boundary more.
The rep starts to push the boundary more and the growers benefit the more and more that we and those partners push. I'll tell you in the last year we had 500 points of sale that we signed up and this was like we were turning down some partners. If they weren't ready to think about placement of crop nutrition, how do you use these products following the best management practices? We just said maybe now's not the right time. I had no idea we were ... I mean, I thought maybe we'd get a couple hundred, but 500. We probably have another thousand in the pipeline that would want to sell. So that's a great position to be in to help support and reach every farmer, but it becomes a challenge for us, which is how do we onboard, how do we train, how do we make sure we deliver what that retailer needs, nuances with different retailers on how they go to market and how they talk about things.
So it becomes quite the challenge to get everybody up and running when they all come in at once. But to have what we would call sort of three or four legs of the stool, you got the independent rep or seed dealer agent model, you have retail, you have large enterprise customers where you're an embedded solution, might be Cedar for company partners that we have. And then we actually have some Pivot Bio direct dealers that all they worry about is selling about Pivot Bio. They essentially franchisees, think of it that way. All four of those work and when they all work together in a market, it's awesome to see what the effect that can have on farmers is.
John Dobberstein:
Well, that's it for this episode of the No Till Farmer Podcast. We'd like to thank Chris Abbott of Pivot Bio for a fascinating look into the technology behind the company's approach to crop nutrition and for sharing what Pivot Bio is doing to expand its reach. We also want to thank our sponsor, Biotill Cover Crops, for helping to make this podcast possible. A transcript of this episode in our archive of previous podcast episodes are both available at notillfarmer.com/podcasts. For Mike, Chris and our entire staff here at No-Till Farmer, I'm John Dobberstein. Thanks for listening. Keep on no-tilling and have a great day.
