As the age of disruption welcomes new opportunities to harvest new profits in ways previously unimaginable, the farming industry is no exception to technological advancements. With an increased consumer demand for sustainable farming practices and growing concern and attention to climate change, the U.S. agriculture market is forced to explore new methods for sustainability and long-term growth.
As our world population is expected to reach 10 billion people by 2050, embracing modern technology may be the best way to ensure an abundance and variety of food for our growing communities – as well as provide the methodologies and tools necessary to enact environmentally sound practices.
The U.S. Organization for Economic Co-operation and Development explains that the purpose of tech is not just to increase or speed up productions – but to improve sustainability overall. Integrated technology is a tool that – when combined with close management and high environmental standards – farmers can leverage to maximize efficiency in the long-term.
With innovation key to the changing farmland industry, investors have an exciting responsibility to make this connection possible in order to implement lasting change.
A massive influx of venture capital is flooding AgTech: in 2019 alone, startups in the sector raised more than $4 billion from private investors, with the past year exceeding that at $5.15B.
The impact of COVID-19 on farming and food supply further highlights an opportunity and need for innovation; the pandemic provided a necessary nudge for the tech-resistant sector to reevaluate its practices. However, old-school mentalities coupled with high startup costs for new implementation have made some farm industry veterans hesitant to adapt to new technology, resulting in a gap in the industry for investors eager to connect with properties that have not yet been tech-enabled.
Providing education around new methods – like the use of remote sensors for perfect water quantities, or ideal habitats to reduce livestock mortality – is key to eventual, successful implementation. The high barrier to entry for new technological processes provides a key window of opportunity for interested investors to establish infrastructures from the ground up.
With increased investments, companies are starting to look to capitalize on this market opportunity to invest in more sustainable, long-term advancements. Take the company John Deere who recently announced its own monumental contribution to AgTech.
This leading manufacturing company is actively expanding their business to include drone technologies, marking the beginning of a larger trend of disruption in the industry. With new software and integrated mobile apps, John Deere has created technologies that allow farmers to view crop health imagery and historical data, and quickly transfer prescriptive analytics into farm equipment.
What sets John Deere apart is their farmers-forward business model; the company emphasizes that their success comes from a complementary partnership between farmers and technology. They have a longstanding history of providing new solutions to old problems by acquiring technology through mergers. Most notably, their “See and Spray” system acquired in its merger with Blue River Technology reduces herbicide use by 80-90%, saving farmers significant operating expenses while boosting crop yields and promoting long-term sustainability.
However, despite the need for innovation and promising forward-thinking companies like John Deere, adoption has been slow. Experts cite a lack of engagement with farmers as one of the largest obstacles in the advancement of AgTech. Tech innovators are often out of touch with farmers’ needs.
Where many farmers and disruptors do align is in their mutual desire to meet long-term sustainability goals.
A focus on sustainability for farms means thoroughly evaluating established practices. From electric trucks for transport to more efficient energy sources, progressive technologies are extremely relevant to farm operations. Based on recent industry advancements, sustainably powered agricultural production is in the farming industry’s near future. By increasing the accessibility of electric vehicles, the industry can reduce its carbon footprint created by workers commuting to and from the farms, as well as by trucks used to ship their products.
Though electric trucks may have seemed financially out of reach for farmers just a few years ago, costs are rapidly declining.
Developments in technology can also help reduce water waste by advancing irrigation systems. CropX, a global soil sensing – and agricultural analytics company – developed a system that “can help farmers become more sustainable by customizing water applications to the soil.” Such advancements in biotechnology can help farms increase sustainability by creating genetically engineered crops that can fight diseases, allowing farmers to harvest more crops and profits.
The goal of sustainable farming is threefold: economic, social, and environmental.
Economically, farms want to be profitable; socially, they want to provide fair wages to their workers and foster a mutually beneficial relationship with their communities; and environmentally, they want to reduce their carbon footprint through sustainable methods. Modern technological advancements funded by investors can help farms achieve all three pillars of success. Developing technologies to more accurately monitor and manipulate the health of crops, integrating sensors in tractors, and developing systems for tracking yields can help improve the industry with affordable long-term solutions.
Perhaps the biggest benefit of technology and the age of disruption is the ability to connect these three pillars of sustainable farming—economic, social, and environmental—in an efficient way that allows farmers to expand beyond just their fields. Thinking long-term, investing in higher-cost methods now can lead to increased harvests, higher profits, and decreased carbon footprints.
Even small sustainable tech changes, like recording field data via apps instead of on paper, can have a big impact by helping farms more easily and accurately track information to follow yields, and identify areas that need improving. Not to mention the inherent sustainability of ditching paper for digital methods.
The technology revolution in the agriculture industry is fundamentally changing the way farmers operate. We constantly scan the industry for new developments and explore implementing those with the highest potential for returns on our properties.
With an investment through FarmTogether, you can take advantage of market innovations for long-term returns. AgTech has the potential to revolutionize the U.S. food systems by using its understanding of the industry to help it evolve. With sustainable practices as the end-goal, investing in technologies that help improve the food industry with both farmers and innovators in mind is the key partnership to success.
FarmTogether's mission is to support sustainable and profitable farming by leveraging technology, all the while providing individuals, our investors, with an opportunity to share in the rewards from farming well.
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.