The agribusiness sector includes a wide array of players including livestock and meat producers, farmers, egg producers, dairy farmers, timber producers, tobacco companies and food manufacturers and retail stores, to name a few.
Agribusiness is the planet’s oldest, largest, and most important sector. It is the business that enables the world to grow, trade and feed everyone, utilizing the planet’s finite resources. Agribusiness now employs half the world’s workforce, half the world’s assets, and close to half of contemporary consumer economy. The sector drives economic development, food security, trade, nutrition, natural resources, animal diversity, genetics, and economic, social and environmental priorities.
Agribusiness production has increased to match demand, but now both natural and contemporary methods at or near capacity. Severe limitations on future growth and productivity are increasing; they are evident in fossil fuel sources, an increasing array of natural resources (e.g. water, fertilizer), and agribusiness production and farming technology.
The Ag sector has achieved scale in the developed world, but this is not the case in developing countries. Lack of scale in developing economies will cause food commodity prices to continue to rise, and food security and safety will become increasingly uncertain for many countries.
Agribusiness represents nearly a third of almost every country’s gross national product, and yet fewer than 2% of agricultural employment opportunities are now on farms. Less than 2% of entering university students choose the sector as a career, and there is a growing shortage in the global supply of graduates to fill industry vacancies to meet future challenges. Improvements in education levels are directly connected to productivity.
The ever-increasing use of technology plays a role in four of the five top trends for 2017 according to The News From Cooperative Extension In Wisconsin. Artificial intelligence, a sharing and collaborative economy, big data, autonomous vehicles, and the role of women in agriculture are the big five. This use of technology and a changing workforce are driving changes in the farming landscape that can and have had a positive impact on the agriculture industry both in the US and across the world.
Concerning Big Data, there is a virtual tidal wave of information at our disposal. New mass data collection techniques are being developed at a rapid pace, adding to the growing science and business developing around data mining and data science. Nowadays referred to as the Internet of Things, pervasive systems collect information from a variety of sources. These sources include tractors connected to the Internet; air filters with an IP address that can send an email to the manufacturer to reorder; and instruments and sensors in produce to record sunlight, heat units, and pest problems. With the growth of technology, agribusiness has to find faster, more affordable and more reliable solutions to broadband, high-speed Internet, and mobile coverage.
The second trend – artificial intelligence driven by the massive amounts of data collected and continuing to be amassed. This information can be managed and used for early agricultural applications including pest control, programming processes or optimizing animal health or crop treatments and regimes.
The third trend – the development and marketing of autonomous vehicles, including cars, trucks, tractors, robots, and UAVs is building momentum and is anticipated to increase dramatically over the next few years. The biggest delay may not be the capabilities of the technology, but rather government regulation and proving the benefits to insurers.
The fourth trend – The rapid acceleration of the sharing/collaborative economy will influence the future of agriculture. According to The News From Cooperative Extension in Wisconsin, “In agriculture, we already have done some of this. In fact, we’ve done some if it for 100 years. Agriculture has been a leader in the cooperative business model. For example, with ag machinery, how can purchasing a $500,000 combine that only gets used a small fraction of the time in a given year be justified? Software platforms to enable and facilitate sharing transactions while maintaining data about trust and relationships can be used to offset the cost of equipment.”
The fifth trend shaping the future of agriculture is key changes and shifts in the workforce, specifically the role of women. The USDA’s 2015 Census of Agriculture showed that women as principal farm operators are making up a greater portion of the industry. They account for almost $15 billion in agricultural products in that year. “If you provide a man and a woman with equal access to resources in a developing country in Africa, or Central America, or parts of Asia – women will generate up to 30 percent more with the same resources, meaning a 30 percent greater return on investment,” according to The News From Cooperative Extension. “A number of business studies in the Americas point to this same trend. Fortune 500 companies in the upper 25 percent or upper quartile with participation by women on corporate Boards of Directors generate 42 percent greater return on sales and 53 percent greater return on equity.”
Allen Austin’s agribusiness executive search firm roots are centered in consumer products and agribusiness. In our earliest years, our clients included American Rice, Riviana Foods, Awrey Bakeries, Bunge Foods, C&M Meats, IBP Foods, Maple Leaf Bakeries, Country Fresh, Interstate Brands, Imperial Sugar, New World Pasta Co., Lund Food Holdings, Portuguese Baking Co., Superior Farms, Tetley U.S.A., Tyson Foods, Veryfine Products, Yve’s Veggie Cuisine and many more.