The buying and selling of farm equipment is often seen as an indicator of the overall health of the agricultural economy, and this type of data may provide insight into industry leanings.
The Futures Council for the Association of Equipment Manufacturers (AEM) developed a report using this data and other research to identify the 13 trends in agriculture that are expected to greatly impact the ag sector and how food is produced in the future.
Curt Blades, senior vice president for industry sectors and product leadership at AEM, recently shared these trends at the National Grain and Feed Association (NGFA) convention in La Quinta, California, US.
“We don’t have to agree with them, but we certainly need to be paying attention to them,” Blades said, noting some of the trends will have a dramatic impact on the grain and feed industry while others were more adjacent to the industry but were still important to consider.
1. Produce more with less environmental impact
“The population is expected to grow by 2.2 billion people by 2050, but at the same time, there is an increasing amount of pressure to lower our environmental impact,” Blades said. He pointed to advancing genetics, intentional stewardship and improving mechanics through precision agriculture as key ways to expand production without increasing the environmental load.
2. Optimization of water use
“We’ve got a water problem in the world and certainly in the United States,” Blades said, adding that agriculture often bears the brunt of the blame for water shortage issues.
“We’ve got some work to do in terms of how we monitor and how we irrigate,” he said.
3. Increased global demand for protein
While discussions about lab-grown meat and plant-based products have gained solid market traction, Blades said there was no indication demand for animal protein would decrease. In fact, it was projected to double by 2050, he said.
“It’s going to look a little different,” he acknowledged, adding that other products will continue to play an important role in the demand for protein. “But despite all the other headlines you’re going to read, there’s no bit of research that points to the fact that animal protein is not expected to continue on the upward swing for the foreseeable future.”
4. Shorter food supply chain
“It just makes a whole lot more sense to raise your lettuce close to where you’re consuming it because, otherwise, you’re just shipping water,” Blades said, recognizing how vertical farming initiatives and greenhouse growing systems have fundamentally changed the farming landscape, especially for leafy green vegetables. He also said many lessons were learned from the production successes of the marijuana industry.
“That technology is easily transferable into fruits and vegetables, probably not so much row crops, but there is a lot of interesting things we can learn (from the underground marijuana industry) that can absolutely translate into the food supply chain being dramatically different tomorrow than it is today,” he said.
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5. Geographic shifts in production
For different reasons, both genetic advances and climate changes have allowed crops to grow in places they couldn’t grow previously, but the changes are opening possibilities for farmers to diversify.
“It’s a simple reality that the Corn Belt is moving further and further north, and the grain industry needs to prepare for this geographic shift in crop production,” Blades said.
6. Advanced food traceability helps maintain consumer trust
“If you talk to anyone that is close to consumers, they are demanding traceability and they’re voting with their wallets,” Blades said, affirming that one of traceability’s main purposes is to improve consumer trust, which has been marred in the past by concerns about food safety and food security. He encouraged businesses to be prepared to provide that traceability if they want to participate in future markets.
7. Farmers adjust in response to emission regulation
Blades confirmed there was plenty of pressure within the agricultural industry to reduce its carbon footprint, which may lead to targeted investments in equipment and vehicle upgrades to more sustainable alternatives, which might pressure bottom lines.
8. Efforts to decarbonize create adjacent economies
Blades said the US Department of Agriculture is actively pursuing opportunities to establish multiple income streams at singular farm operations by supporting the development of adjacent industries, especially for carbon markets where farmers could generate and sell carbon credits to private sector buyers.
“We don’t know how it’s going to end, but we certainly know there are going to be industries adjacent to the grain industry that will have dramatic impact on what’s happening in our world today, and we just have to be prepared for it,” he said.
9. Connectivity gap narrows
“All of the promise that we have within precision agriculture relies on constant connectivity of the internet,” Blades said.
He asked convention attendees to think about the fundamental impact smartphones have had on people’s lives, but many farmers are restricted from capitalizing on this innovative technology because the connectivity has not been available. According to the AEM report, only 25% of farms in the United States currently use connected equipment or devices to access data.
“I think we can only imagine the computing power that comes out of these tractors that’s currently contained inside that tractor and then all of a sudden it’s connected to the cloud, and every other tractor is connected to the cloud,” he said. “It’s amazing what’s going to come out of that.”
10. Artificial intelligence enables insight-driven farming
Blades said AI was making significant strides and was expected to influence the agricultural industry from both a productivity and sustainability standpoint. Some examples cited in the AEM report include real-time crop condition analysis, maintenance prediction systems and auto-harvesting robots.
11. Resources pour into cybersecurity
“If you haven’t been the victim of a cybersecurity attack yet, well then you’re going to be, so you need to get ready for it,” Blades said, encouraging attendees to tighten up their cyber security efforts as much as possible since the majority of data breaches result from weak links that often are overlooked. Adherence to security standards will become increasingly vital as farm operations transition to digital platforms.
12. Farm ownership models change
“We used to always joke that the average landowner in Iowa is an 82-year-old widow,” Blades said, adding, “I don’t know if that’s exactly correct, but it’s probably not too terribly far from the truth.”
For the first time in generations, farm businesses were increasingly being separated from the land, allowing non-operator landlords, typically retired farmers who were unable to successfully pass their operations to subsequent generations, to claim ownership while outside parties can invest in and produce on the land.
13. New business models emerge
“You don’t have to look very far to see the money that is being poured into agriculture,” Blades said.
Corporations with previously limited or no association to agriculture have begun investing in the sector at an accelerating pace and will likely influence, and eventually evolve, current systems.
“At some point that is going to change everything we’re used to within this industry, and new business models are going to emerge, and I don’t know if that’s a positive or a negative, but it’s certainly an interesting thing for us to pay attention to,” he said.
