Posted on August, 7, 2024 at 09:58 am
The rise of artificial intelligence has led to speculation about what its uses could be.
One interesting — and surprising — use could be in grain marketing.
In an article, University of Delaware assistant professor of farm management Kofi Britwum outlined several potential uses, including in grain marketing.
“By utilizing AI with data on these variables, models can be developed to predict market trends with specific probabilities,” Britwum wrote. “This will add a level of certainty to farmers’ marketing strategies, aiding them in making better-informed decisions.”
In an interview, Britwum said AI has been transforming different sectors like health care, transportation and manufacturing. There’s potential in agriculture as well, he said.
“Precision farming, how to improve productivity, how can farmers make decisions regarding their actual farming,” he said, “but there’s also lots of room for AI to evolve in ag that hasn’t necessarily been touched on a lot.”
Grain marketing, as defined simply by University of Maryland Extension agent Mark Townsend, is how to sell grain that’s been produced.
“By and large, a lot of growers just sell off the combine effectively, just throw it into the truck and into the elevator and that’s that,” Townsend said in an interview, “and effectively what this does is traps you into the lowest price of the year.”
Britwum said AI usage in grain marketing could be fascinating.
“AI can help us be efficient at production,” Britwum said. “At the end, profits are coming from markets and I think this is an area where AI can be used to help farmers make informed decisions.”
With marketing grain, there are a lot of variables to think about. AI could use historical data to assist farmers in figuring out market trends and price forecasts to lock in prices, Britwum said.
“Ultimately, all of these would help with risk management
AI, Townsend said, could have a use, though he noted that the models can sometimes spit out old information. As an example, he noted that if you ask Chat GPT if Yevgeny Prigozhin is still alive, it will say yes. Prigozhin, a Russian mercenary leader and oligarch, died in an Aug. 23, 2023, plane crash.
“That’s just a function of when the model was trained and the data,” Townsend said. “That being said, there’s a lot of price action that has happened in agricultural markets that AI will not necessarily be privy to based on its training.”
The value with AI, Townsend said, would be parsing through large sets of data. Commodity data can be tracked by the minute or second, and having AI delve into that data quickly and effectively could be a huge value.
As for grain marketing right now?
“The current crop production estimates are very high, and we sit on a very large reserve of grain from last season,” Townsend said, “and there’s very limited demand out there, so oversupply and underdemand leads to very low prices and that’s where we stand currently going into this marketing year.”
Source: Lancaster Farming