Publications

- October 1, 2022: Vol. 9, Number 9

The future of food production: Innovation and new farm ownership models at the heart of tomorrow’s food supply

by Association of Equipment Manufacturers

Consumers have a growing desire to know more about where their food comes from. At the same time, supply chain vulnerabilities, environmental challenges, demographic shifts and advances in technology are prompting regulators, investors and growers to view the processes of food production and distribution through a different, more critical lens.

Going forward, farmers and the shrinking skilled workforce will be asked to do even more. Meeting tomorrow’s challenges will require a new way of thinking and, in some instances, a new way of doing business. Innovation will be the key to success in meeting the food supply chain demands.

A report by the Association of Equipment Manufacturers Futures Council identified a host of trends that are likely to reshape the agriculture industry over the next 10 years.

Producing more with less impact: As highlighted in the American Farm Bureau Foundation for Agriculture’s (AFBFA) 2021 Food and Farm Facts Book, one U.S. farm feeds 166 people annually in the United States and abroad. The global population is expected to increase by 2.2 billion by 2050, which means farmers will have to grow roughly 70 percent more food than what is now produced.

American farmers are expected to accept this monumental challenge as their next great opportunity. Maximizing the potential of every acre farmed will be essential. Progress has been made over the past several decades. For instance, the AFBFA reports that careful stewardship by U.S. food producers has spurred a 34 percent decline in erosion of cropland by wind and water since 1982.

However, more will need to be done to meet the needs of the future.

Precision agriculture (PA) is one approach that will continue to help crop farmers meet the growing expectation of producing more with less impact. An article published by the USDA says PA is a general term used to describe farming tools that are based on observing, measuring and responding to within-field variability. It is a specific application of artificial intelligence. PA enables growers to make resource management decisions based on specific field irregularities, hence the term “precision.”

Optimization of water use: Concerns over depleting water resources will compel growers to embrace the latest technologies and farming practices in an effort to improve soil management and to optimize water use. Considering food security is contingent upon water security, this trend will drive change.

The USDA published a December 2021 report titled Trends in U.S. Irrigated Agriculture. The report states the following: “In an era of heightened water scarcity motivated by successive severe drought events affecting major U.S. agricultural regions, policy emphasis has turned to building drought resiliency within agricultural systems … Improved irrigation water management practices (e.g., soil moisture sensors, weather tracking, irrigation scheduling tools, flow meters, plant condition monitoring technology, etc.) are essential in achieving maximum water-use efficiency.”

Increased demand for protein: As the global population grows and larger segments of society advance up the economic ladder, demand for protein will increase significantly. Both animal-based proteins and plant-based alternatives are forecasted to grow, giving American farmers several ways to continue feeding the world.

Per capita food consumption has been increasing since the 1960s, largely driven by a shift from roots and tubers to livestock products. Additionally, as nations develop, more people begin consuming more proteins as their incomes rise and they move to urbanized areas.

Animal protein will continue to benefit from its long history of consumer acceptance. The FAO projects that annual meat production is on a trajectory to achieve a 72 percent increase in 2030 as compared to 1999. Looking a bit further onto the horizon, demand for animal protein is expected to double by 2050.

Shorter supply chain: Demand will grow for locally sourced food and overall shorter food supply chains. Farmers will utilize a variety of direct-to-consumer marketing tactics to capitalize on this opportunity. Additionally, restaurants, schools, hospitals and other institutions will increasingly look to local food providers in an effort to ensure a reliable supply of high-quality food, while also benefiting the local economy.

Schools, for example, are beginning to revert back to the nutritional standards set for the National School Lunch Program during the Obama administration. Those standards require more whole grains, fruits and vegetables while reducing sodium. Now the USDA is planning an entire reboot of nutritional standards for school meals in 2024/2025 that will include sugar limits. With more emphasis on fresh foods, local farmers are in an excellent position to help fill local schools’ food needs.

Geographic shifts in production: Crop production will continue to shift geographically as climate changes and water resources challenge conventional approaches, creating opportunity for farmers to diversify and generate stronger returns. The impact will not only be to what farmers grow, but also how it will get to market; this change will shift the entire food supply chain.

Never short of ambition and ingenuity, American farmers have already been taking matters into their own hands. For example, farmers in southern Kansas have added cotton to their crop rotation strategy, providing a water-efficient option in this region.

The World Resources Institute discusses the importance of transforming food systems to reduce risk. For example, coffee production in Costa Rica was relocated from an especially hot area of the country and replaced with citrus, which can thrive in a warmer environment.

Food traceability: Consumers will expect growers to document and share everything about their production, leading to widespread adoption of the latest food traceability technologies and more data being included on food labels.

Food traceability refers to following the movement of a food product and its ingredients through all steps of the supply chain, documenting and linking production, processing and distribution. Because traceability enables faster and more precise identification of contaminated food sources, product recalls can happen more efficiently, helping to reduce waste while still providing for public safety. Additionally, traceability helps consumers gain even more confidence in the foods they are eating.

Data shows 81 percent of shoppers believe food transparency is important or extremely important, up 12 percent from a couple of years prior.

Connectivity gap narrows: A multifaceted strategy including fiber-optic, low earth orbit satellites, 5G and ultimately 6G will continue to close the rural connectivity gap, enabling farmers to leverage the myriad of technologies and management strategies that will help them produce more with less environmental impact.

Connectivity is the linchpin of agriculture’s future. Connectivity enables game-changing technologies such as PA, soil and weather sensors, AI including machine learning and machine autonomy, equipment tracking, food traceability and so on. Without ubiquitous connectivity, the agriculture industry cannot fully embrace the new technologies that will enable it to meet the productivity and sustainability demands of the future.

As it stands today, just one-quarter of farms in the United States currently use connected equipment or devices to access data. A lack of broadband-related infrastructure is a big reason why.

AI-enabled farming: Artificial intelligence, including a predominance of machine learning and precision agriculture, will continue to revolutionize the agriculture industry, allowing for previously unimaginable advancements in soil and water management, weed and disease detection, yield predictability, efficient equipment operation and much more. The skilled workforce shortage is one of several drivers spurring this innovation.

A key to the enormous potential for the agriculture industry is the use of image recognition. For example, equipment-mounted cameras can scan large fields for targeted areas showing signs of pest infestation, plant disease and weed presence. Artificial intelligence connects these inputs, along with infrared imagery and in-ground sensors, to help analyze growing conditions and predict their effect on crop yield.

Pouring resources into cyberspace: As agriculture operations become more connected, they inherently become more vulnerable. A sharp and sustained increase in cybersecurity investment will help ensure that vital equipment, sensors, data, infrastructure and food supplies remain protected.

Infosecurity Magazine reported on an Australian researcher who spoke at the DEF CON 29 Conference in August 2021. The researcher explained that as modern farming becomes increasingly automated, equipment becomes vulnerable to hacking. A hacker could potentially turn off spraying equipment, for instance, or even send a tractor off course and out into a road. In less theatric fashion, a hacker could simply gain access to equipment user information and other sensitive food supply chain data.

Changing farm ownership models: The decoupling of land ownership and farm operation will accelerate over the next decade, resulting in a farmland ownership profile skewed toward landlords. According to USDA ownership data from 2017, less than 40 percent of total farmland is rented. Of that rented farmland, 80 percent is owned by non-operator landlords, and 38 percent of those non-operator landlords are retired farmers. Data presented by the American Farmland Trust adds further perspective. Roughly 40 percent of U.S. farmland is owned by people at least 65 years old. In other words, about 370 million acres of farmland will likely be transitioned over the next 10 years.

Owner-operators are still expected to own a significant amount of America’s farmland. However, new investors are expected to claim an increasingly sizable share. As farmland is passed down within families, subsequent generations are less likely to maintain ownership. This creates an opportunity for various types of investors to acquire an asset that provides them with attractive returns over time.

Conclusion: America’s farmers have always met the challenges of their time. Now, with global populations rising, food demand increasing, a shrinking skilled workforce and the need for environmental conservation becoming more urgent, the bar has been raised once again. Farmers will seek to answer the call through innovation.

The world is changing, food production is changing, and even the complexion of farmland ownership in America is changing. Over the next 10 years, the one constant at the center of it all will be the American farmer, blessed with the ingenuity and tenacity needed to continue ensuring a reliable food supply in the United States and abroad.

 

This article was excerpted from the Future of Food Production report from the Association of Equipment Manufacturers. Download the full report here.

Forgot your username or password?