The virtual fencing gold rush is happening. And the pace is accelerating. On the face of it, this is a good thing. The benefits of virtual fencing are numerous. From an economic perspective, it allows for flexible, precise grazing, which lets producers increase their grass utilization. It also saves cost and labor: producers no longer have to build fence across rough terrain or physically move cattle. On the conservation side, the potential feels almost limitless. Virtual fencing can support rotational grazing, remove physical barriers for wildlife, protect riparian areas, reduce predator conflict and collect valuable data. These are real gains waiting to be realized. Implementing the technology still requires significant up-front capital, but as it scales, costs will likely come down (at least for the companies selling it).
So, what’s the problem? When the real California gold rush happened, the merchants selling supplies got rich, not the miners doing the work. The virtual fencing gold rush threatens the same dynamic for ranchers, for three reasons: the subscription model sends a larger share of the benefits to tech companies, murky data ownership practices that ranchers have real reason not to trust and the risk that cheaper labor could make vertical integration of cow-calf production cost-effective for the first time.
Most virtual fencing companies use a subscription model. Rather than the rancher owning the technology or holding equity in it, they pay a yearly fee for each collar. Right now, virtual fencing companies are competing for market share in a new market. The current incentive is to provide a product that differentiates itself from other companies on merit to build market share. However, it is not hard to imagine virtual fencing companies slowly increasing the price of subscriptions and squeezing ranchers as they become reliant on the technology. In a perfectly competitive market, ranchers would just switch providers, but that’s a lot easier said than done. Once a rancher has sunk capital into one company’s system, the effort to switch is significant. Software companies have already shown ranchers the future. Adobe created the same “lock-in” structure when it retired perpetual licenses in 2013 and pushed customers into monthly or yearly Creative Cloud subscriptions. The companies used years of customers gaining experience and expertise with their products as leverage. Since then, it has raised its main plan’s price multiple times, most recently from $59.99 to $69.99 a month in summer 2025. Virtual fencing companies are building the same kind of ecosystem lock-in.
Additionally, with the news that virtual fencing companies taking investment from funds like Peter Thiel’s Founders Fund, the question of who controls the data becomes even more pressing. If a tech company owning your grazing data is concerning on its face, this raises the stakes considerably. Who will have access to that data, and what will they do with it? While right now leadership of virtual fencing companies is often comprised of people who have worked in livestock agriculture, the influence of venture capital funds on decision-making is potentially concerning.
And for ranchers who aren’t worried about what a company might do with their data, they still deserve the opportunity to monetize it themselves rather than watch a tech company profit from it instead. Your data is an asset and should be treated as such. Companies structure contracts with ranchers so that the company owns the rights to cattle behavioral data. Companies have been demoing a free “reproduction package” with early adapters. The package uses cattle behavior data to create algorithms which can detect everything from calving to open cows. But it won’t be long before this feature is likely put behind a paywall. If companies are going to make money off it to create products, you should too.
The same labor savings that make virtual fencing attractive to individual ranchers could make it attractive to someone else entirely. Poultry and pork became almost entirely vertically integrated once concentrated animal feeding operations became common. Today, more than 90% of broiler chickens are raised under contract to an integrator that owns the birds, while the grower supplies only the land and the labor. Cow-calf production has resisted that model because cattle are spread across lots of land and the labor of moving, checking and managing them on pasture has been too costly and too decentralized for a distant company to control directly. Packers have used captive supply and forward contracts as a substitute for the full integration they’ve achieved in poultry and pork.
However, virtual fencing removes a meaningful piece of that labor burden. If it drives the cost of managing cattle low enough, it could tip the economics toward vertical integration. Or at the very least, companies like Walmart could use virtual fencing technology to monitor your cows and enforce supply chain compliance with their vision of what ranching should look like.
None of this means we should stop pursuing virtual fencing adoption. I’m still a believer in the technology’s benefits. But with adoption accelerating, now is the time for business practices to get solidified. Educated ranchers making educated decisions can push the market toward a product where ranchers capture their fair share of the benefits virtual fencing delivers. I recently saw an ad for a virtual fencing company that said, “We sell collars. Not your data.” Pushback from ranchers and conservation organizations is already influencing the contract structure and product specs. And if the market doesn’t deliver on its own, alternative ownership structures may be worth investigating. Ranchers and farmers have been participating in co-ops for centuries, after all. The virtual fencing gold rush is happening right now. Let’s make sure it benefits the ranchers taking care of the land. — Jack Newman, Montana Cattlemen’s Association
