Survey Says…AgTech

Oct 4, 2022

The growing unpredictability in agriculture—which was already unpredictable, let’s be honest—is pushing producers to new products and technologies, according to a new McKinsey survey.

McKinsey surveyed 1,300 row crop and specialty producers in May to understand how they’re handling current issues.

They found that producers have cautious optimism about the future (expecting to maintain or increase profitability) but will change purchasing behaviors and embrace innovation to manage volatility.

Predictability predicament: Supply chain disruptions, geopolitical uncertainty, climate change, labor challenges, and rising input costs are all pressuring producers—with 80% of farmers pointing to input costs as the biggest profitability disruptor.

Large farms (over 5K acres) are most likely to take steps to manage volatility. They’re using tools like earlier input purchasing, forward selling, and financial hedging.

AgTech trend: About 50% of farmers expect to use a new yield-improvement product. Grower acceptance of AgTech has risen in the last two years. Large farmers trend toward technology that helps with marketing, like tools that can help trade crops. Small farmers are more likely to adopt tech that can increase yield.

Supplier side: “I can’t wait to try and adopt another complex technology with an unclear return on investment,” said no farmer, ever.

McKinsey recommends suppliers use data, analysis, and omnichannel approaches. Programs should be designed to make it easy for farmers to try new products, or offer personalized approaches with dynamic sales strategies.

Monetizing sustainable practices and simplifying sustainability programs will also be attractive to farmers.