The Van Trump Report

AEM Identifies Trends that Could Reshape the Way Food is Produced

Tracking farm equipment sales is one of the common ways that economists assess the overall health of the agricultural economy. According to the Futures Council for the Association of Equipment Manufacturers (AEM), this data may also provide insights into up and coming industry trends. AEM has developed a new report based on such data and identified 13 trends in agriculture that could greatly impact the sector and how food is produced in the future

Curt Blades, senior vice president for industry sectors and product leadership at AEM, notes that 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. Blades adds, “We don’t have to agree with them, but we certainly need to be paying attention to them.” Below are the top 5 trends identified by AEM and what they might mean for the future of farming. The full report is available HERE.

Produce More with Less Environmental Impact: Environmental expectations will continue to change, raising the bar even higher. Farmers will be expected to fulfill higher production needs while reducing their environmental impact — a story they are familiar with from history. In order to feed a global population that’s expected in increase by some +2.2 billion by 2050, farmers need to grow roughly +70% more food than what’s currently produced. That gives added importance to maximizing every acre of farmland.

Precision agriculture (PA) is one approach that will continue to help crop farmers meet the growing expectation of producing more with less impact. Overall, precision ag enables growers to make resource management decisions based on specific field irregularities, hence the term “precision.” According to AEM’s own research, producers leveraging PA technologies saw a +4% increase in crop production, +7% increase in fertilizer placement efficiency, -9% reduction in herbicide and pesticide use, and -6% reduction in fossil fuel use. Another game-changing PA technology is precision irrigation, which intersects with another critical trend helping to shape the future of food production: water use.

Optimization of Water Use With water a vital resource in the production of crops and the raising of livestock, demand will grow as food demands increase. Considering food security is contingent upon water security, this trend is expected to drive change. USDA says growers can increase drought resilience through many actions, including investments in irrigation efficiency and tactics that enhance soil moisture-holding capacity. USDA says a variety of management practices that increase soil organic matter while reducing soil moisture loss—such as no-till or reduced tillage, the use of cover crops and conservation crop rotations—can also help farms adapt to drought risk.

Precision agriculture will also play a crucial role. The AEM study on PA shows that growers utilizing precision irrigation technologies realized a -4% reduction in water use. Another strategy includes using non-traditional water sources, such as recycled, reclaimed, and desalinated. Growers over the next decade will also be looking to new seed varieties to help them produce more while optimizing water use. Growers may also become increasingly willing to challenge conventional norm and make strategic decision on which crops should be planted based on water availability. Sorghum, for instance, tolerates drought better than most crops and could present opportunities.

Increased Global 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. The Food and Agriculture Organization of the United Nations (FAO)  projects that annual meat production is on a trajectory to achieve a +72% increase in 2030 as compared to 1999. Looking a bit further onto the horizon, demand for animal protein is expected to double by 2050. Plant-based meat alternatives are also on the rise. According to NielsenIQ, sales increased +60% from 2019-2021.

Putting all this together, AEM says it is clear that over the next 10 years demand for all types of proteins will expand. American farmers will likewise adapt their production operations accordingly to ensure that the global market has the reliable, diversified food supply required to meet both current and future protein consumption needs.

Shorter Food 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.

According to a report published by the USDA in October 2021, local food production currently represents a small share of the overall U.S. food system. But it’s growing. Sales of local edible farm products in 2017 totaled $11.8 billion, or 3% of all agricultural sales, a +35% increase from just two years prior. Over the next 10 years as more consumers and institutions look to their communities for reliable sources of food, this shift will add strain to an already shrinking skilled workforce. Innovation will play a pivotal role in meeting demand while using fewer resources of people, water, and other inputs.

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. 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. Over the next 10 years, American growers will also begin examining where certain crops can be planted in an effort to optimize water use and maximize ROI.

A study from NASA suggests that climate change could affect global production levels of corn and wheat by as early as 2030. Increased temperatures, changes in rainfall pattern and elevated surface carbon dioxide concentrations are all having an influence. Wheat could actually see its geographic potential grow as temperatures rise. Corn, on the other hand, could be negatively impacted since large quantities are grown closer to the equator. Each scenario presents both challenges and opportunities for growers. A short video summarizing NASA’s research is HERE

Leave a Comment

Your email address will not be published. Required fields are marked *