Survey: Excessive enter prices speed up uptake of agtech

Hovering prices of farm inputs, together with fertiliser, crop safety merchandise and labour, are accelerating the adoption of agtech amongst US farmers, a brand new survey has discovered.

The analysis – carried out by world consultancy agency McKinsey & Firm and titled ‘Voice of the US farmer in 2022: Innovating by means of uncertainty’ – seems at 1,300 US crop farmers.

The research discovered that 80% of these farmers now cite rising enter prices as the most important threat to profitability.

These pressures are driving the adoption of recent merchandise and applied sciences to “squeeze essentially the most worth from every acre”.

50% of the farmers surveyed stated that they’re planning to make use of new yield-increase merchandise. Half of the bigger farms surveyed (these over 5,000ac) stated they have been already utilizing precision agriculture {hardware}, reminiscent of drones.

The rising provide chain prices are additionally weakening loyalties to conventional farm provide sources in what was beforehand thought to be a conservative trade, with one-third of farms surveyed saying that model loyalty is now a decrease precedence when deciding on farm tools.

Unstable prices and uncertainty are equally reworking buying and promoting methods, with half of the bigger farms now aiming to purchase inputs earlier within the rising yr, and the identical proportion planning to promote extra crops ahead.

In accordance with the analysis, excessive enter prices are additionally spurring extra sustainable innovation, with 30% of huge farmers now planning to make use of ‘inexperienced’ merchandise reminiscent of biofertilisers as a result of decrease value of those merchandise.

Nonetheless, the survey additionally famous that, regardless of all this, there are nonetheless boundaries to the adoption of agtech among the many surveyed farmers.

Unclear returns on funding, and poor experiences with agtech amongst growers, proceed to hinder farmers from scaling agtech.

On the subject of shopping for agtech services or products, of the farmers surveyed, 50% of them stated {that a} lack of agtech customisation to their very own circumstances, and satisfactory customer support, are the most important boundaries to on-line buying.

On foot of those survey outcomes, McKinsey has urged that suppliers of agtech ought to undertake extra agile enterprise fashions, reminiscent of rethinking how they interact with farmers; personalising services; and serving to farmers monetise the adoption of sustainable practices.