What are farmers thinking about ag tech during COVID-19?
Many of the world’s leading industries are grinding to a halt as governments across the globe attempt to thwart the further spread of COVID-19. Industries that involve bringing large numbers of people together physically are bearing the brunt, including sporting events, restaurants, education, and tourism. But there are a few that have been deemed essential to everyday life, including healthcare, emergency services, food manufacturing, and farming.
In uncertain times, there are a few things that are certain; farmers will soon be planting new crops in the Northern Hemisphere and harvesting in the South, livestock will continue to eat and produce offspring, and people will continue to eat. How these different activities come to bear might be different, but they cannot be canceled altogether like a conference or a college football game.
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As farmers face new and in some cases unprecedented challenges, how will their approach to technology use and adoption change? And what role can technology play as farmers grapple with the new realities of a socially-distanced and economically struggling world?
Planting during financial uncertainty
As with people working in other industries, farmers are also contending with a lack of childcare in the wake of school closures, concern for and looking after high-risk family members, or a dip in household income from losing off-farm jobs in other industries. Labor shortages are another shared challenge across multiple industries with farming being no exception.
On top of this, producers are facing a volatile market for their goods — check out how just some ag commodity prices have changed in the past month here — and an uncertain financial future.
Illinois farmer Steve Pitstick and his family business partners are roughly two weeks from the start of the ever-important planting season. The rent has been paid, the seed purchased, and plans made. As with many farming families, plans for the next season often start when they set the combine down after harvest. The family-run operation produces feed-grade corn and soy across 12,000 acres. Pitstick says the pandemic has had little impact on his day-to-day operations, other than stocking up on parts he may need during planting and spending more time at home.
The family is firm in its decision to proceed with planting-as-usual, but many producers are either reducing their planned output for this year or halting production altogether due to uncertainties about future demand during the pandemic. Changing course just weeks before planting is no easy feat, but with indications about where demand and therefore pricing is moving for certain commodities — plummeting corn prices on the back of low ethanol demand due to the glut of fuel from the transport industry is a clear example — it’s a serious consideration for those who can be nimble.
And, while these decisions might not be felt for a while, Pitstick argues that the sudden fluctuations in supply and demand will ripple out for months to come. He uses pork chops as an example:
“[The U.S.] got really efficient with our supply chain, knowing how many pork chops were getting eaten each week and how many pigs were needed to be raised to achieve that,” Pitstick explains. “But there’s a 10- to 11-month period between breeding and when that pig goes to market. Right now, the freezers are full because people aren’t eating out anymore, school meals aren’t being served, etc. People don’t eat chicken wings or short ribs at home. But because people are halting production to cope with the oversupply, there will eventually be a hole in the food system, and things will be in short supply.”
Low-cost and cost-saving are key
Asking farmers like Pitstick whether they plan to keep purchasing new ag tech tools almost seems silly after this exchange. The family describe themselves as early adopters of ag tech, implementing innovations starting back in the 1990s. Yet, now he has little interest in exploring new gadgets, and discretionary spending is out of the question including everything from new tractor tires to the latest gadgets.
“Depending on how the economy shakes out, there’s no room for extras and unproven technology. We are just doing the bare minimum now like autosteer because it has a definite ROI [return on investment]. All the new stuff is fluffy and I can farm without it. We can all revert back to the old days really fast, and that may be what we have to do to financially survive this situation.”
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For farmers who are still keeping an eye on potential technologies to facilitate their operations, low-cost tools that are easy to use will likely garner the most attention, according to Pat Rogers, a South Carolina commodities farmer and founder of agriculture social networking site AgFuse.
“I’m not sure that the coronavirus outbreak moves the needle one way or the other regarding farmers’ attitudes toward AgTech,” Rogers told AFN. “I do sense that there is heightened concern over things like supply chain issues and potential labor issues because of the virus. In that regard, the adoption of productivity, organization, and information-gathering tools could potentially accelerate.”
As Thomas Edison said, however, “Opportunity is missed by most people because it is dressed in overalls and looks like work.”
For some start-ups, the pressures that COVID-19 brings to farm production could be the perfect opportunity for technology to shine, particularly if there’s a cost savings.
“There could be some benefits in some cases where it solidifies itself on the farm,” Shane Thomas, an agronomist and columnist who currently works for Farmers Edge, tells AFN. “There may be more scrutiny where the technology is adopted and whether it will be actively and aggressively used vs. technologies that are adopted under a ‘we will give it a try and see how it goes’ mentality. An example might be sensor technology like moisture probes, which have an upfront cost, but its effective use could save further dollars in-season through irrigation management or top-dressing decisions.”
For small farmers, technology meets opportunity
While commodity-scale farmers brace for uncertainty, some small farmers are seeing an unexpected silver lining amid the chaos. As grocery store shelves are being emptied faster than they can replenish and supply chains hit with countless delays or outright stoppages, local farmers have found themselves uniquely poised to feed the hungry masses.
“They are now seeing a spike in demand and need to meet it,” Dan Miller, founder and CEO of sustainable farming investment platform Steward told AFN. “The type of farm that we support on our platform is a diversified operation that sells direct-to-consumer. That’s what everyone wants now. High-quality farm products sourced directly from the farmer. We helped one of our farmers set up an e-commerce platform last week. There are a lot of operational systems that are needed now to help them manage the high volume. Not all farms are ready for that.”
As well as connecting investors with small-scale farms, Steward also provides business coaching for farmers on its platform, which has become more important than ever for farmers who want to harness COVID-19’s invigoration of interest in local food. Many small-scale farmers who direct market locally rely on interpersonal relationships to market and sell products; farmers’ markets are a prime example. The sudden need to meet consumers’ demand for e-commerce options has left many scrambling for solutions. For less tech-savvy farmers, this creates serious headaches.
But for those willing to jump on the digital bandwagon, the opportunity to capture increased sales, attract new customers, and convert one-off buyers to long-term buyers is attractive.
“Before COVID-19, we were starting to lean toward incorporating more technology into our systems,” Amy Eckert of Fisheye Farms, a diversified farming operation in Chicago tells AFN. “However, for the past two weeks, the majority of our sales have been to individual households through our Friday Farmstand, so the most appealing technology to us has been getting the online store up and running. It will make our lives easier to be able to pre-pack peoples’ orders, have them pick it up, and not have to fuss with lines, accepting cash, etc.”
Good advice well taken
As any established e-commerce player will tell you, however, building a food business over the internet is not akin to a Field of Dreams “If you build it, they will come” ethos. One only has to skim the meal kit space’s graveyard to know that logistics, operational costs, and consumer churn are formidable foes.
“Advice that I would give to farmers launching e-commerce platforms is to have diversity,” Paul Greives, founder and VP of sales and marketing at southern California pastured poultry company Pasture Bird, tells AFN. Although some of the business’s wholesale accounts like restaurants and corporate cafeterias dried up, its butcher shops, meal prep companies, and online grocery outlets are soaring. And some of his direct-to-consumer farmer colleagues are reporting up to fivefold increases in sales.
Building a diversified sales channel like that was advice well-taken.
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“When we were first entering the business, the vice president of Newport Meats George Yueh told me, ‘It’s better to hit 100 singles than one big home run.’ Even though it’s a slower way to go, we’ve really benefited from that advice, building resilience through a diversity of sales channels. It’s funny because it’s really similar to what we preach when building pasture health as well. Huge monocrops are subject to all sorts of bacteria, pests, disease – but the rainforest is resilient.”
“The farmer has to be an optimist or he wouldn’t still be a farmer.” — Will Rogers
Tom Oswald, a farmer and host of the United Soybean Board’s Tech Toolshed, reminds AFN that farmers were already facing low prices, an onslaught of catastrophic weather events during 2019, and trade wars. There wasn’t a lot of room for investing in cutting-edge technology before COVID-19.
But the old tropes about farmers’ work ethics, stubbornness, and ingenuity are more fact than fiction. With a dismal financial future ahead, farmers are going to have to dig deep within their existing operations, which may include exploring existing agtech tools that have been left unexplored to date.
“I would suggest that the pandemic is going to show us how we can use the tools that we already have,” Oswald explained. “I think it’s increasing awareness of some of the tech we have but haven’t really deployed yet. My personal philosophy is that innovative people can’t help but be innovative. It’s in their blood. Like how farmers will figure out a way to get the crop in the ground.”
Editor’s Note: The author of this article is Lauren Stine. This story originally appeared in AgFunderNews.
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