By Mark R. Smith, Contributing Writer
Scanning the horizon of the agriculture industry, to some observers, might seem repetitive or perhaps a bit mundane. After all, the volatility of the weather in various regions are hardly anything new, nor are the more recent related supply chain, inflationary and labor issues.
However, with a deeper gaze, they’ll also see how technology is improving output, companies are using their wits to create new markets and how the ensuing innovation can have some big payoffs as the industry continues to navigate a difficult economy.
Offering a world view on agriculture was Jay Garner, president of Atlanta-based Garner Economics and board past chair of the Site Selectors Guild, who discussed the growing importance of the climate angle.
“Ireland is considering the slaughter of more than 200,000 cows to meet European Union carbon goals,” Garner said, “so any business that is green-oriented and trying to achieve the unrealistic goal of net zero carbon goals may follow that kind of activist public policy direction in agriculture.”
On that note, he pointed out what’s jumping off of the retail shelves. “Anything plant-based (Beyond Burgers, anyone?) is getting more shelf space than it did just a few years ago,” said Garner, “but in the U.S., it’s not outselling traditional meat and poultry.”
It sounds like consumers are washing down that plant-based meat with non-alcoholic drinks that are much healthier and adult beverages that may have a new kick.
“We’re seeing far fewer sugary drinks and more infused waters, as well as an increase in small batch liquors, like bourbon, vodka, rum,” etc. “They cost more, but consumers are buying craft products,” he said, also noting that “Sales are down for all of the mainline beers, such as Budweiser, Coors and Miller Lite.”
Overall, “Not much has changed in the last year related to food and beverage trends, but the green push is getting much more amplified because green policies are driving it,” said Garner, “whether in the U.S. or the E.U.”
What’s the story today in agriculture? From the perspective of Charlie Walker, site selection lead for Madison, Wisc.-based Diligent Selection, if comes down to one word.
“Water,” said Walker. “Improving water management and finding ready sites that have modern and abundant water and treatment facilities for agricultural operations is becoming more difficult. That’s among the top issues when developing the utility site matrix.”
Walker also addressed the second most common item in the agriculture location identification process: labor. “There is a huge need for reliable labor up and down the supply chain, beginning on the farms and flowing through in transportation logistics and processing,” he said.
However, a plan to move forward is gaining traction. “The trend today is addressing both of those issues through innovation. Concerning water management, for instance, that can mean using more advanced sensors and biotechnology, such as superabsorbent seeds,” he said. “These types of innovations are being developed, are more acceptable and are being deployed on the input side.”
Today, innovation and Artificial Intelligence often go hand-in-hand. “AI is starting to play a central role,” said Walker. “It’s now being used to detect water leaks and pump malfunctions, as well as improving preventative maintenance schedules and water source issues; it also assists in identifying available water, logistics and labor input costs. And growers are using it to help monitor crop moisture, fertilizer needs and livestock health.”
With the increasing deployment of high-speed Internet into rural areas, the use of AI will only continue to rise. “Many farms use technology, but those that have unreliable (or no) Internet are forced to call an expensive service technician to diagnose an equipment problem,” he said, “but AI diagnostic actions reduce costs, save time and improve the bottom line.”
The union of AI and agriculture is getting stronger, with another example being indoor crop production, or vertical farming. Walker pointed out that Time100 recently cited a company called Plenty that selected a facility in Central Virginia to grow strawberries, and called it “a leader” in that sector.
Still, Walker used the word “innovation” with a caveat. “The industry tends to lag on using new technologies, mainly because it spends a longer time on research and development, when compared to an industry like advanced manufacturing, for instance,” he said. “Vertical farming is still in its infancy, in part because it’s so capital intensive. Still, I think it will continue to grow in popularity domestically.”
That’s because such operations “can also be built in the cities where labor is more readily available. They also result in bringing product closer to the consumer, reducing transportation costs and improving a company’s sustainability goals,” he said. “Furthermore, it provides communities that are heavy into placemaking with opportunities for their renewal projects or addressing food desert issues.”
Along that vein, “Communities are collaborating and positioning themselves,” said Walker, “to help companies reach their carbon reduction goals.” To do so, they’re “expanding and modernizing their waste treatment plants, and providing incentives to expanding companies that upgrade their technologies to better manage their water resources.”
Skin the Cat(fish)
While Garner and Walker took world and national views of trends in the agriculture industry, respectively, many businesses have to act locally, or at least regionally. “For instance, in the mid-Atlantic, we’re concerned about nutrients getting into the Chesapeake Bay,” said Kevin Atticks, secretary for the Maryland Department of Agriculture. “Therefore, farmers are looking for innovative ways to grow the best crops with the least amount of fertilizer. It saves them money and helps the Bay.”
Speaking of money, more of the region’s farmers are taking the value-added approach to selling their specialties by offering on-site experiences such as musical events, picking crops and presenting corn mazes via agri-tourism; or by using the harvest they have normally sold as is to make new products, such as turning milk into ice cream, tomatoes into pasta sauce and rye into whiskey.
“That combined approach is gaining momentum, because the public wants more experiences as we work out of the pandemic, as well as information about where their food is coming from,” said Atticks. “If they can do both at once, that’s ‘agri-tainment.’”
He also noted observing a greater focus on genetics, notably with drought-tolerant crops.
“We’ve been in a drought in the mid-Atlantic, the severity of which varies. Therefore, farmers have to be more sensitive to what varieties they plant and follow the trend lines of recent years,” Atticks said, adding that “Perennial growers and orchardists, for instance, also have to think decades into the future about what crops can be successful in such conditions.”
The topic of genetics also relates to poultry and beef, with the use of such techniques as marbling (which concerns the fat ratio of the meat) for the producer to attain the highest quality. “That matters now,” he said, noting the increasingly discerning public. “They used to just buy what was offered. Now, they often opt for certain characteristics.”
Circling back to the Bay, Atticks talked about how Maryland’s issue of the invasive Blue Catfish could result in a new market that could inexpensively feed many of the region’s residents who are struggling to keep food on the table.
“They’re multiplying faster than we can eat them,” he said. “However, that could be a good thing because we have watermen ready to catch whatever we can sell.”
Speaking of new ways to feed the hungry, Darren Jarboe, principal agent and assistant director at the University of Maryland’s College of Agriculture and Natural Resources, noted how the pandemic inspired governments to set up and bolster food resiliency councils, food banks, etc., with diverse boards to get a variety of foods into their local systems.
“That’s hard. The large food service companies are well set up to do just that without much local input,” said Jarboe, “but when there isn’t a big enough payoff, they don’t do it.”
That’s where the councils come in. “They’re working on policy changes, such as subsidizing better refrigeration and supporting aggregation to create a bigger product pool,” he said. “That will help local farmers work with companies like Sysco and US Foods.”
With climate change another looming issue, Jarboe wonders if the industry can help mitigate developing issues. “One topic discussed is cattle,” he said, echoing Garner. “They give off greenhouse gases in their digestive processes and scientists are working to improve that situation.”
Another finer point in the climate change arena is crop production. “Crops sequester carbon in the soil, but anytime you till soil, it gives off carbon, so farmers have been adopting ‘no till’ practices,” he said. “Today, all they need is a pathway for planting the seed; they try to leave the remnants of the previous crop on the soil of their field” to serve that purpose.
With farmers regularly investing in their equipment, he also noted the growing emphasis on technological advances. “There is great interest in analyzing data from the field to better manage crop production,” said Jarboe, also citing dealing with droughts via plant genetics with more efficient use by the plant.
“Traditionally plant breeders have focused on yield as the main driver,” he said. “Now, they’re also thinking about water efficiency and other traits.”
These changes all point to consumers taking a more macro view of the ag market. “Post-COVID-19, more people understand that agricultural production is a cornerstone of the larger, globalized food system,” said Trey Malone, assistant professor at the University of Arkansas, Fayetteville. “That has renewed interest in developing policies promoting more efficient production to build a more resilient, sustainable system.”
As for the state of the industry, “That depends on the crop we’re discussing and the place we’re discussing,” said Malone. “We’re all on edge as we wait for Farm Bill deliberations to progress, as that bill will determine much of the future direction of the industry.”
Even after the difficulties experienced during the shutdown with the supply chain, “international trade is a large part of the conversation right now, as is sustainability,” he said, while also acknowledging the sparse labor market.
However, despite its difficulties, Malone is among those observers who think the industry “is more exciting now than ever. Agri-food technology companies are constantly making headlines,” he said. “The industry is becoming more inclusive, and there is renewed interest in working toward more robust supply chains that support U.S. producers.”
Carter Williams’ take on heightened integration in the industry had much to do with sectors working together for the common good “between [the use of] farmer’s ingredients, with companies and retailers.”
Williams, CEO and managing director of iSelect, in St. Louis, said Fairlife, the producer of ultra-filtered milk, “is a good example. The dairy industry has had multiple problems, but the company’s milk co-op came up with a technology to filter its milk in a different way. That resulted in new market.”
So today, more farmers “are thinking of how they process their milk and make the best of it,” said Williams. “They thought that they couldn’t make money any other way. But as the public has become more demanding, the food companies have become more innovative.”
That approach sounds as good as making money by eating invasive catfish and feeding the hungry in the process. He said there could be a huge benefit as that trend continues.
“Bad food had been the norm,” he said, “and farmers had always delivered products to their clients within a super-efficient supply chain. But we’re starting to see a shift that may become a wave, or even a tsunami, of more affordable food for the masses.”
After more than three years of a world focus on COVID-19, “Right now, the biggest pandemic in the world is diabetes because the public has bought so much unhealthy food for decades,” Williams said. “As a result, our country has spent $1.9 trillion with the cost of health care, lost lives and lost productivity.
“However,” he said, “now people want higher quality food at affordable prices. If farmers and consumer product goods companies produce healthier offerings and the prices go down, then we can spend that money on food that is good for us and live to 100 ― without diabetes.”
But then comes the nearly $2 trillion question: “How do we bring down the prices?” But know that “We all have cell phones, computers and TVs that used to be expensive,” said Williams, “but the prices came down and are now affordable. That’s innovation.”
Agriculture, health care and food/consumer products companies “need to work to make it happen,” said Williams. “That’s the same entrepreneurial force that drove Silicon Valley. We should start seeing companies come out of the woodwork in the agriculture industry, just like we saw with the Internet companies in the ’90s.”