Ag-tech could hold the key to attracting a new generation of US farmers, returning industry to growth

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/Jevtic
Source: Getty/Jevtic

Related tags Rabobank Ag-tech

Increased production of key crops from China, Argentina and Brazil may have weakened US agriculture’s competitive position over the last 10 years, but rapid innovation in ag-tech in the new decade could help American farmers regain a pole-position by attracting a new generation of workers, boosting efficiency and improving sustainability, predict Rabobank analysts.

“Our reality today is so different than what we saw 10 years ago,”​ Pablo Sherwell, head of RaboResearch, Food & Agribusiness in North America, recently told attendees gathered at the bank’s annual Food & Agribusiness Summit in New York City.

“If we go back to 2010, we can recall that pretty much every single agricultural publication was positive about everything: economic growth, trade, food to mouth – you name it. Ag prices were enormous then and we were so excited that our margins were going up and income was going up,”​ he explained.

But, he added, “the party didn’t last too long. High prices encouraged more production. Globally production started increasing faster than demand and then prices came back down and now almost everything has change.”

For example, the excitement around ethanol that characterized the start of the last decade has vanished and competition from China, Brazil and Argentina has replaced many of the givens in the past decade with question marks, he said.

As a result, he noted, “we have moved from being in a very bullish environment to a more bearish environment.”

Ag-tech clears a new path forward

But, Sherwell added, the next 10 years hold significant potential for revitalization – especially as more farmers adopt ag-tech solutions to growing challenges.

“In 2018, investment in technology increased 40%. So, right now we have seen entrepreneurs, engineers jumping into this sector, trying to help farmers become more efficient, but also … face a lot of challenges we have like the growing population, environmental concerns, labor shortages and changing consumer trends,”​ he said.

Looking forward, he predicts that artificial intelligence and machine learning will evolve to play a larger role in helping farmers understand and act on the influx of data they are beginning to track and collect but which many do not know how to leverage, yet.

Specifically, “big data”​ cultivated from sensors and genetics will help farmers increase food production with fewer inputs so that the environmental impact of agriculture is significantly lower, said Rabobank’s Christine McCracken, senior animal protein analyst.

She also predicts over the next ten years, the most impactful technology that farms will adopt will focus on reducing “the drudgery, back-breaking work”​ that people increasingly are unwilling to perform on farms.

“With ongoing urban migration, the continual decline in availability of workers and even fewer entering the sector from outside, the industry is going to need to find labor-saving devices to stay competitive worldwide,”​ she explained.

Ag-tech advancements entice younger workers back to the farm

McCracken also optimistically predicts that “technological advances could actually lead to a resurgence in ag – almost a renaissance.”

She explained: “We are already beginning to see signs of this with young people moving back to the farms as they realized that living in the big city on an entry level income and saving for a house or raising a family is a lot more difficult than expected.”

For support, she noted, “the latest census data show that we have an increase in the number of farmers under 35 years on US farms.”

Not all of the young people returning to farms are doing so out of frustration with urban living. Rather, McCracken said some students are returning because they see new ways of applying their science and technology degrees to agriculture.

“We are seeing students … who want to study science and technology but who previously never thought about applying those degrees to agriculture … starting to find solutions to climate change and sustainable food production. And this is going to be a huge part of our industry going forward,”​ she explained.

Ag-tech brings farmers, consumers together

Simultaneously, Rabobank’s senior analyst of consumer foods Nick Fereday predicts, farmers will increasingly embrace social media and other ag-tech to better identify consumer trends and directly tell consumers what they are doing to meet those trends.

This in turn will create new partnership opportunities up and down the supply chain as sustainability and transparency form the backbone of farmers’ stories and communication with consumers, added Sherwell.

Ultimately, all three argued, technology will permeate all aspects of agriculture – creating new paths forward that could help the industry not only return to its former glory of 10 years ago but potentially surpass it.

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