As investors, our job is to find the visionaries that dream up the future and partner with them to help make that dream a reality. In agriculture, with the latest advancements in technology, we have imagined small harvesting robots, skyscraper vertical farms in every city and sensor-studded fields overseen by drones. Yet, as fun as it is to imagine this kind of future for agriculture, we were hungry for a more comprehensive picture, so we dove in to get an understanding of what the real challenges are — and 10 ways to turn them into opportunities.
From an economic perspective, farming is getting more expensive. Inputs (including seeds, fertilizers, and herbicides) comprise 38 percent of total costs in Iowa corn production, and labor comprises more than 30 percent of costs in berry production. This scenario has only worsened due to herbicide tolerance, seed-pricing dynamics and the increasing cost of employing a willing workforce. While economic costs are increasing at an alarming rate, environmental costs are increasing even more rapidly. Water pollution, algal blooms and bacterial resistance will have implications on long-term health. GHG emissions from agriculture have increased by 17 percent since 1990, driven both by livestock manure management systems and soil management practices.
Some technology advancements are particularly timely for addressing these increasing costs — primarily, the low cost of sensors, improvement in computational capabilities and the advancement of machine-learning techniques. Whether it is the ability to capture more data, analyze it more robustly, or act on it more precisely, these are all components that lead to a reduction in inputs, a better management of the production cycle and automating costly processes.