The Farm of the Future: Utopia or Dystopia? Part 1 of 5

USDA-farmersAs America’s farmers hit retirement age and technology options explode, what comes next? 

The Digest commences a five-part series today.

The average age of the US farmer reached 58.3 years in the USDA’s 2012 Census of Agriculture. Now, farm,ears have been older than the general population for some time. Why is it becoming important now?

First, one-third of all farmers are now over the age of 68. Second, Arama Kukutai, managing director at Finistere Ventures and one of the sector’s foremost thought-leaders, estimates that something like 75% of farmers do not expect to hand off the farm operation to their children.

Transition coming fast?

Given that 97% of farms are family-owned, that means a wave of transition is coming, fast. and given that $2.5 trillion in land value is tied up in US farms, it will have impacts that roil markets far away from Iowa.

Especially if you consider the huge and not widely covered impact that land prices have on the US economy via the Wealth Effect, which we investigated in April, here.

The Choices that Farmers have

As with “Let’s Make a Deal,” we have doors 1, 2 and 3. Door number one, the children of farmers have a change of heart and decide to operate the family farm going forward. However, worth remembering that these children are increasingly in their 30s and 40s with careers of their own, and families locked in to other communities and a different way of life. Door number two? The families sell the farming operations — possibly to corporate farming interests, private equity funds, or other farmers consolidating the sector. Door number three, the farms are leased to professional operators.

Given the number of farm operations changing hands in the next 10-20 years, the leasing option may well prove the less disruptive model, avoiding a crushing depression in land prices owing to demand-supply imbalances in the land market.

What kind of farm operation might we see?

Think automation.

For one, those fun Google automated vehicles will probably be seen in farming operations long before you see them on US streets and highways.

Consider also the wiring of the field. Companies like CropX, with just three sensors on a given field, can reduce water consumption today by up to 30% through smart application of water based on plant dryness, as divined by the sensors. If that’s not sufficiently enticing as a market opportunity — consider, as Kukutai explained to the Digest, “you can have up to 15% crop yield loss through over-watering.”

Consider run-off, too. The more farmers water crops, the more that valuable nutrients run off the field and pose potential environmental stresses, that have to be remediated at some cost. Not to mention the cost of adding a nutrient load later in the season to replace the nutrients lost.

Much more than water-efficiency plays here.

When it comes to automation, you might consider that a revolution is right around the corner. From the advanced seed to seed drilling and no-till farming, to automated crop maintenance through sensors and drones, to automated harvesting systems. Many of these technologies are already in the market, some are arriving now, and with the cost of bandwidth and computing dropping, expect much more.

8-Slide Guide to PrecisionHawk

Take a look at PrecisionHawk, a tech company whose farm analytics are enhanced through drone technology. Today. See our 8-Slide Guide to PrecisionHawk, here.

precision-hawk-sm

8-Slide Guide to The Revolution in AgTech

The investors, the technologies, the prospects — all here.

The Have / Have-Not problem

When technologies are essential to the production of food, fiber, feed and bioenergy — as in the case of what is produced on farms around the globe, what happens should ownership of essential-to-compete technology falls into the hands of fewer and fewer technologists? Will wealth continue to be spread evenly across economies, or will technologists amass Tony Stark-like power and influence?

On the other hand, why care? Well, as Cosmopolitan editor Alfred Henry Lewis observed in 1906, “There are only nine meals between mankind and anarchy.”

The consequences for industrial biotechnology

Biomass — for most players in industrial biotech, whether they use sugars, oils or cellulose, biomass is the lifeblood of the industry. If there is a consolidation of supply — will that tip the balance of price control more towards the feedstock owners?

The consequences for GDP

Rising farm income through automation — why, that translates into high land values. Triggering, perhaps, a gigantic “wealth effect” impact for farmers and agricultural regions. Renaissance of high prices? Crisis du Jour of unstable commodity prices and instability of ownership prompted by speculators?

This week in the Digest

We’ll be looking at The Future of the Farm and the future of supply-chain and feedstock for industrial biotechnology, all this week in The Digest. Coming up

TUESDAY: UTOPIA? The Crop and Soil Technology Revolution — and what’s sizzling in drones, robotics and analytics?

WEDNESDAY: DYSTOPIA? The catastrophic fall in rural population that automation might bring — who votes for farmers when there are no farmers to vote?

THURSDAY: THE NEXT JOB CRISIS? As AgTech software-as-a-service deploys— will the farms of the future be managed by banks of servers, and low-cost, highly-skilled screen-based operators in India and China? What jobs will remain in the Farm Belt?

FRIDAY: WHO’LL STOP THE RAIN?  The Climate Change complication — what happens when the rain moves, as it already is moving? Are farms in the right places? Are cities? Are the rivers and lakes? Will rainfall turn to ceaseless flooding, even as the rivers we depend on turn to dust? If so, when, and then what?

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