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News

Emerging Trends in Agriculture

12/07/2024 - Madeleine Royère-Koonings - 2024 WPTC congress

From the keynote presentation made by Ryan Avery from Bayer Vegetable Seeds during the World Processing Tomato Congress in Budapest in June 2024 during the session “The Future of Food”

Ryan Avery has been in he agriculture industry for 15 years. He is the Global Head of Processing for Bayer Vegetable Seeds. His background in Agriculture has spanned a variety of responsibility in row crops, digital, crop protection, and fruit and vegetables. He is responsible for the identification, development and execution of strategic initiatives for the Processing business at Bayer Vegetable Seeds.
In 2019, he received his MBA from St Louis University with a focus on International Business. He currently resides in St Louis with his wife, Shauna.

"Imagine yourself in the shoes of a new farmer. The blue skies, the green field in front of you. The optimism and excitement as you prepare for your first season. You carefully invested in seeds, equipment, to make your first crop a successful one.

You prepare as best you can and accept that not everything is in your control. However, the world is rapidly changing and new challenges are emerging. For you, the new farmer, today's knowledge and tools won’t be enough for you to thrive.
You face challenges like never before. Climate change, geopolitical uncertainty, less land, and a changing landscape of tools and regulations to understand.
You do have hope, though. Awareness of these issues and support available for farmers is high. Technology is potent and ever evolving. Farmers may have access to even greater tools in the future.
What information, what tools would you give yourself? How could we best support you on this journey? To start with, you need knowledge of the emerging trends in agriculture.

Setting Expectations
The future of agriculture is a highly complicated topic, and I am humbled by the opportunity to share my thoughts. These are my thoughts alone.
Predicting the future is impossible so I have chosen to highlight emerging trends in agriculture (please note these trends are not just limited to Processing tomatoes and not all trends are presented)
These emerging trends are somewhat easier to predict since they’re happening now. They are also trends that are actionable, we can help support, accelerate, or potentially mitigate.
My intent today is to share my thoughts, to start discussion, and to (hopefully) inspire us to keep the farmer in mind as we think about the future.
Looking at the agenda for this week’s event, there are many credible experts here today who are going in depth on these topics, and I am excited to continue learning from them and each of you.

I have highlighted 5 trends here that are emerging:

Climate Change and Water Scarcity
Reduced Land Area and Industry Consolidation
Changing Consumer Attitudes & Preferences
Labor availability and Automation
New Technologies

Climate Change and Water Scarcity

The world is warming and 2023 was the warmest year on record since preindustrial times. This slide is from 2023 but when I was looking at it, in 2024, April 2024 was the warmest month on record globally.
The impact of this warming has yet to be fully understood but the implications are becoming clearer.

Climate Change is well-documented as leading to an increase in extreme weather such as droughts, more rain, rising temperatures further from the equator, and greater extremes in the normal variance of weather.

For our new farmer this has a lot of implications. It might mean that where seed is produced may change due to a changing climate.
For us as consumers this means where food is produced may change too.
As crops and zones change for production these new biozones mean new disease tolerances will be needed while current diseases continue to evolve
A good example of this is downy mildew – new races continue to evolve and we must continue supplying farmers with disease resistant (or tolerant) packages to help them be successful.

Temperature changes are already impacting important measures of soil health such as soil moisture availability (which is heavily influenced by precipitation patterns) and the salinity of soil.

Water scarcity and water availability should now be two of the main drivers of decision-making when making economic decisions about where to grow a certain crop or even what to grow.
We have seen evidence that groundwater is being removed from areas impacted by drought faster than it can be replaced.
Water access has steadily decreased in the areas with rich agricultural potential and agriculture faces increasing scrutiny on the amount of water used to produce food, fuel, and fiber.
Attempts at creating policies and regulations for water use are in place, evolving, or emerging.
This complicated framework of regulations and ever-evolving consumer opinion is going to challenge our new farmer and our industry to adapt.
These challenging and unpredictable environmental conditions are driving an increase in protected agriculture to mitigate or remove the stresses of open field production. So there are opportunities to address climate change and water scarcity, such as protected agriculture.

Protected agriculture can also help improve the predictability of yields and lead to less waste.
While protected agriculture won’t entirely replace open field production, we believe it will be a lever to either produce higher value products or enable new market opportunities.
Some of these new markets will be enabled by China and India’s investment and focus in protected and high value agriculture.
We have to note that protected agriculture does not make sense everywhere. It is very expensive to establish, and our new farmer may not have the means or the ability to establish the infrastructure required.

Data generation
As an industry we need to ask ourselves, what can we test for and what information does our new farmer need to be successful?
We can use data to test and recommend varieties, planting dates, water use (volumes and timing) and resilience in low water environments.
Additionally, simulations of abiotic and biotic factors (such as creating a digital crop twin) are a powerful way to assess climate impacts while being able to adjust for certain variables.
These simulations can help us predict the impact of climate stress on things like yield, biomass, growing environment/location, etc. And the data we generate can be used to generate an adaptation strategy for impacted crops

As an example at Bayer, we are looking at water deficit trials in Processing Tomatoes to proactively build knowledge to equip our growers and our advancement process to be more effective.

Policy impacts (i.e. push towards sustainable solutions)
We need to advocate for legislation and tools that allow our farmer to have access to required inputs, such as water, or new technology in a timely manner.
Sustainability and regenerative agriculture principles should also improve our farmer’s share of value, not put more pressure on their incomes.
There is more pressure than ever on farmers to implement and be able to share data on their sustainability footprint and farmers should be incentivized for this extra effort, not punished for it.

Gene editing accelerates or gains importance as environmental stresses grow and the urgency to bring new solutions to our farmer increases.

We see the need to improve plants globally but are mindful that gene editing is not the only solution available. Gene editing can support efforts in breeding.

Key takeaways on Climate Change and Water Scarcity:

Climate change is accelerating, leading to greater frequency and intensity of extreme weather events.
Water scarcity will impact growing decisions and conditions in a significant portion of the world.
These emerging trends represent an opportunity to use data, policy, and technology to support our new farmer.

Reduced Land Area and Industry Consolidation

To visualize how small the land footprint supporting all agriculture is, I’d like you to visualize the Earth as an Apple.
If we quarter the earth, ¾ is covered in water. ¼ is land.
Out of that ¼, only half, so 1/8^th, is available for agriculture. And of that, only ¼ of that, so 1/32^nd , is viable for agriculture.
So we only have 1/32^nd of the Earth, less than 5’ deep of the top soil to produce all of the food the world needs.

This is being compounded by things like urban sprawl, the growing global population, and the demand for housing. These are all reducing the already finite amount of available farmland and water.
This fierce competition for land will accelerate the need for efficiency and improved productivity on every acre or hectare.
Processing tomatoes are a positive example of our ability to produce more with less but there is more work to be done across crops.

Processing tomatoes in California: an example of producing more with less

Growing more with less is an example of true sustainability in action. Since the 1960s, we are using 64% less land and improving productivity by 274%.

The number of farms has in the United States has decreased by 3.75 million (66.4% of all operations) since 1950 and the University of Colorado Boulder is projecting the number of farms globally to decrease by 50%!
Input costs to the farm have steadily increased over time (with a sharp spike due to inflation in recent years) and the lack of increased value capture on the farm has led to a decrease in farm incomes.
According to the USDA, In 2023, net farm income is forecast to have decreased by 18.9 percent relative to 2022 and is expected to further decrease by 27.1 percent in 2024.

The result of the higher costs and flat to decreasing farm income, is that scale is needed to maintain profitability. And this squeeze on farmer’s profitability can result in a shift to more profitable crops, more profitable geographies (where input costs may be cheaper), or entirely out of business.
How can we help our farmers address reduced land area and industry consolidation?

Thinking in systems is going to be an important component,
We can help our new farmer improve efficiency and reduce risk through the following areas:
·       Breed varieties for and/or select for climate and weather resilience
·       Managing/mitigating stressors and using technology like gene editing to improve native traits
·       Proactively addressing changing standability and sustainability requirements to meet customer needs and improve system effectiveness
It's important to think in systems and not rely on only one component to solve problems.

What our new farmer needs to know about the trends of Reduced Land Area and Industry Consolidation:

The availability of arable land for agriculture will continue to decrease over time as population grows.
There are positive examples of growing more with less land (particularly in Processing Tomatoes).
Farm incomes and the number of farms have decreased over time as costs rise.
These emerging trends represent an opportunity to proactively evaluate the systems in place today to improve efficiency and minimize potential risks.

Changing Consumer Attitudes & Preferences

The food industry is changing.
Here’s a quick overview of how market dynamics are changing, and what risks and opportunities we need to consider.
We believe food production cost will continue to increase, energy prices will remain higher, climate change is accelerating and becoming less predictable.
Food security is top of the agenda in many countries, and all are planning to expand local production, to reduce reliance on imported seed.
Robotic harvesting and autonomous growing is gaining traction, especially in the protected environment. These high investments will lead to even faster consolidation.
Consumers are more and more demanding, as they are spending an increasing part of their income on food and energy. More and more consumers are willing to pay “sustainability premiums,” and consider personalized health and wellness, including food as medicine products.
However, as a result of food price inflation, vegetable consumption has shrunk everywhere.

There is demonstrated consumer demand for products with more appeal.
Flavor can sell and be the differentiator but willingness to pay for a product can be a challenge. Not all markets are created equal in this regard either. Discretionary incomes are going to differ by the market.
Retailers want produce with more appeal to differentiate themselves from their competitors.
High quality fresh produce is the first thing we see in a market and it creates appeal for consumers.
E-commerce is an interesting trend that is gaining momentum. Consumers using online shopping platforms for food delivery are prioritizing convenience.
In this area, freshness and shelf life are the key factors for success.
Nutrition and sustainability are a “luxury” in this category.

Consumers desire for transparency, food safety is growing but other trends may be more impactful.
Consumer expectations for food have increased to be healthy, environmentally responsible, and sustainable.
Education is required here but data alone has not been sufficient due to the emotion surrounding food.
There is a trend in the consumer segment for health-conscious consumers looking for health and wellbeing through food. The value is growing here but so are the production costs.
High quality produce will service this market and potentially allow for both price and value growth.

Huge opportunity

We also need to evaluate those who influence our consumers.
These new players are different than the traditional seed companies.
The First category are the Gene Editing technology providers. We expect gene editing to grow in importance as the technology gains acceptance and as it becomes cheaper.
A second category are the Consortia, where companies, institutions and capital providers join forces, to solve a particular challenge in breeding, or to provide brand new technology solutions. We see an increase in the amount of people willing to build consortia.
A third category, are the Supertech Online Giants. With more understanding of agriculture, these online vegetable seed & solutions providers, will become powerful players.

What does this mean for us as industry and what does it mean for our new farmer?
As more and more consumer insights & data are collected, the produce market is shifting from a commodity mass market, to a hyper-personalized micro market.
Food brands, retail- and foodservice brands alike, will expand their portfolio of plant-based items with unique benefits for consumers and for planet earth.
Food & Beverage companies, as well as retailers, are more and more investing, in Fruit and Vegetable controlled Environment production and R&D.
As an example, Walmart invested $400 Million in the indoor vertical farming company called Plenty.
Driscolls then partnered with Plenty to bring the most flavorful berries to the market.
So there are opportunities to address changing attitudes and preferences.

Education of consumers impacts everything that matters to our farmer: including purchasing decisions, policies, and economics.
Lack of consumer education likely leads to stronger opinions.
It’s very difficult to assess these trends with consumer attitudes and preferences. I recommend keeping an eye on places like California. California is a positive indicator of trends and is also predictive of long term behaviors and policy. So what happens in California eventually makes it way to the rest of the United States. We see this same ability to create trends in New York too.
We have an opportunity to support regenerative farming as a positive for the farmer.

What our new farmer needs to know about Changing Consumer Attitudes & Preferences:

Market dynamics are changing as multinationals, governments, and consumers focus on the methods and means of production.
Consumers are looking for healthier choices and may be willing to pay a premium for higher value produce that meets their new demands.
New players and new means of addressing these new opportunities will be entering the market.
Efforts to educate consumers will be important to new value creation. We can leverage insights from places like California to help our new farmer stay ahead of the trends.

Labor availability and Automation

Climate change is going to have a major impact on productivity. Between 1986 and 2005 labor productivity decreased 12% as temperatures rose. And if we model out the rise in future temperatures we can expect labor and productivity to decrease in these areas. There is going to be less labor available in the future.

Farming is no different in this regard and with the rising cost and scarcity of labor, automation will only grow in importance.
Population growth isn’t enough to support the need for labor due to declining birth rates in major agricultural producers. It will be a major impact on places like China, Japan and other large markets.

Digital technology represents an interesting way to address the trend of labor scarcity and automation. Because certain jobs (thought work/menial work) may disappear in this space.
Digital technologies can scale quickly if farm economics allow or if we can demonstrate a tangible benefit such as boosting production.
Grower investment in technology that can reduce risk is also an interesting area to explore.
Technology that reduces investment risk by predicting outcomes/yields can provide a positive ROI.

The farmer maintains relationships and spends time on value added tasks. Machines improve efficiency and predictability.
Growers have many competing demands on their time and many competing demands for their resources. Simple, effective, and scalable technology will be the drivers for adoption in automation
We must demonstrate the value of automation in managing a crop efficiently. We discussed the challenges with profitability on farm – how does automation and technology help a grower maintain the incomes required to stay in business?

New technologies

We can think of digital tools, gene editing and generative AI.
Digital technology is all around us and farming is no different. What’s different on the farm is the impact of digital hasn’t been fully realized. There is a need for speed to bring new products to the market to gain competitive advantage and allow for differentiation as a producer.
Improving the amount of nutrition that can be produced per sq foot and per liter of water becomes the new benchmark for the future.
Novel technologies for Fruits & Vegetable production are being developed and entering the market.

Digital has the opportunity to make a positive impact for our new farmer because delivering traditional (that is, seed or crop protection products) innovation takes longer. The difference in global regulatory systems and the pressure on these traditional products is opening the door for technology to improve the value equation for our farmer today.
Improving digital capability will also help with efficiently manufacturing supply and monitoring inventories to have the same quality and consistency while fulfilling needs year round. Digital can directly support on-farm operations.

Predicting harvest and creating recipes for cultivation will allow our new farmer to manage variability in field and to adapt based on the information collected. In digital, we collect so much information today but wisdom and insight are lacking. Digital can and will help us make decisions to optimize efficiency and economic benefit for farmer.

Generative AI has the potential to be incredibly disruptive and powerful for our new farmer – taking us to a place we’ve never been.
Here’s an example of today's reality compared to the future benefit of Gen AI:
Today, a farmer must ask their agronomic advisor a series of detailed questions about a product’s characteristics, performance under specific conditions, and application rates.
This advisor or sales person then searches online, sends text messages, gathers info from multiple sources, and puts together a response, while the farmer waits hours or days for urgently needed information.
In the future, Generative AI can significantly accelerate this process, making better information more quickly and readily available.

This information must be vetted by qualified agronomists and the AI tool must be trained to be more effective.
Generative AI should not replace the agronomic advisor or sales person, it should enhance their capabilities. These Generative AI systems can bring value to farmers while augmenting and supporting people who work with farmers today. This should significantly improve efficiency in day-to-day agronomic operations.

The moment the agronomic advisor gets a phone call, their attention is fully focussed. Generative AI can be on a hundred thousand phone calls at once with that farmer or any farmers and correctly support their needs. The perception of Generative AI is that it was often more as the Terminator kind: fully autonomous, it replaces humans. The potential for Generative AI is much more intriguing, think Ironman, think about something that enhances your capabilities. It is synergistic with you and improve your potential. That will fundamentally change how we work and how we work on farm.

Gene editing has been referenced several times but may be one of the most important ways to ensure that our new farmer is successful in the future.
We see the need to improve plants globally but are mindful that gene editing is not the only solution required.
Gene editing can support efforts in breeding, by speeding up the innovation process. And product concepts with desired phenotypes to be designed in silico – i.e., by means of computer simulation – predicting also their performance in different environments.
Seeds are then created using a state-of-the-art genome editing toolbox that writes and assembles the necessary genomic variation for improved crops.
In doing so we will be able to effectively “design” a unique genome editing pipeline and accelerate the delivery of crops with beneficial traits for farmers, consumers and the planet.
As expertise and confidence in gene editing grows, we see a trend towards gene editing becoming cheaper and more accessible.

What our new fa?rmer needs to know about New technologies:

Climate change (particularly water scarcity) is a major driving force for the adoption of new technology. We don’t believe climate change can be stopped.
Gene editing can improve innovation and speed to market with new and necessary technology that benefits the farmer and the consumer.
Generative AI can enhance our capacities like never before.
It will also take a true system to address all of these challenges. Any single technology or product will not be as effective as the combined and coordinated system that can be delivered on farm. This ecosystem of tools working together to maximize value represents a huge opportunity.

Our journey comes to a close.
Our new farmer is now better equipped to understand the changing world.
Your first harvest is a successful one because you were able to anticipate and adapt to the emerging trends in agriculture and it’s up to provide as many tools as possible to help equip our new farmer for success now and in the future."

Source: Bayer, World Processing Tomato Congress (2024, Budapest)

Slides shown during the presentation:

Ryan Avery The future of Food

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Bayer - Crop Science

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