Farming has always been a challenging profession, but today’s farmers face a unique set of pressures that demand a shift in thinking.
Gone are the days when simply maximizing crop volume was enough to ensure success. A new imperative is clear: farm for value, not just volume.
Let’s face it, farmers around the world are masters of adaptation. They’ve always focused on what they can control amidst unpredictable circumstances. And, as we enter the 2025 growing season, so must we — whether farmer, supply chain partner, or investor. This approach is more crucial than ever as the agricultural sector navigates through turbulent times. Farmers have traditionally zeroed in on things like input costs, quality, and farming practices to optimize productivity. Row crop farmers are constrained by the commodity value of their crop, and therefore the road to success is productivity while optimizing inputs. While these factors remain important, they’re no longer enough to guarantee profitability in the face of declining commodity prices and shrinking margins.
The situation looks even more challenging as we look ahead to 2025. According to economic projections, net farm income is expected to fall to its lowest level in nearly a decade, with a forecasted decline of 15%-20% from 2024 levels. This steep drop highlights the urgent need for farmers to find new ways to create and capture value from their crops.
The Challenge is uncovering some fascinating possibilities. We’re seeing advancements in fermentation technologies that could create bio-based alternatives to petrochemicals. There’s work being done on thermo-catalytic processes to develop drop-in replacements for industrial materials. And let’s not forget about the efforts to reduce the carbon intensity of corn production, which could significantly boost its value in increasingly carbon-conscious markets.
But here’s the thing: this isn’t just about corn. The model of innovation and collaboration we’re seeing here has the potential to transform the entire agricultural sector. By leveraging the collective power of grower associations and partnering with forward-thinking investors, farmers across all crops can drive industry-wide value growth.
As we look to the future, it’s clear that farming for value will require a multifaceted approach. We’re talking about embracing new technologies, fostering partnerships across the value chain, and adapting to market demands for sustainable, high-value products. It’s a big shift, but it’s an exciting one.
According to the new research report on the "AI in Agriculture Market by Technology - Global Forecast to 2025", the market is expected to grow by 22.5% to reach $2.6bn by 2025 from $518.7m in 2017. Agriculture, currently one of the world’s least digitised major industries, is expected to go through a transformation as data acquisition, agricultural robotics and analytic companies grow.
The rapid growth of the AI in agriculture market can be attributed to various factors, including the growing demand for agricultural production owing to the increasing population, rising adoption of information management systems and new, advanced technologies for improving crop productivity.
Small Scale Farming is the Answer to feeding the world
Machine learning-enabled solutions are being significantly adopted by agricultural organisations and farmers to enhance farm productivity and to gain a competitive edge in business operations.
Moreover, in the coming years, the application of machine learning and computer vision in various agricultural practices is expected to rise exponentially.
Nonetheless, all is not doom and gloom as the weather outlook has turned positive with forecasts so far indicating that El Nino is strongly transitioning to La Nina which bodes well for the 2024/25 crop season.
This coupled with strong grain and oilseed prices, and with potentially lower input costs particularly fertilisers will encourage producers to increase plantings in the next season. Further, SA’s consumer inflation is trending on the downside within the SARB’s targeted range.
Market expectations indicate a potential downturn in the interest cycle with rate cuts starting from the second half of 2024 into 2025. All these are positive developments for agriculture machinery sales in the year ahead.
Still, from a consumer perspective, South Africa is not in a crisis regarding supplies of grains and oilseed. With that said, there are upside risks to white maize prices, especially considering the potentially ample demand from the Southern Africa region later in the year and into the first quarter of 2025 when their domestic supplies are depleted.
Farming in Africa is poised for significant growth and transformation by 2025. The continent has made substantial progress in increasing agricultural productivity, with the sector growing faster in Africa than anywhere else in the world since 2000 ¹.
Key Areas of Focus
- Ending Hunger: Africa aims to end hunger by 2025, as per the Malabo Declaration commitments ¹
- Agricultural Productivity: Labor productivity in agriculture has risen by 50%, while land productivity has doubled .
- Intra-African Trade: Intra-African agricultural trade has increased by 175% from $5.4 billion to $14.9 billion between 2003 and 2021 ¹
- Digitalization: Digital tools and services are being used to fast-track rural transformation and wellbeing ².
Challenges and Opportunities
Despite progress, challenges persist, including:
- Limited Public Investment: Most African countries have not met the Malabo target of investing 10% of their national budgets in agriculture .
- Climate Change: The impact of climate change on Africa's largely rain-fed agricultural sector deepens the growing food crisis
To address these challenges, organizations like the Food and Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD) are working to promote sustainable agricultural practices, support smallholder farmers, and enhance intra-African trade
Initiatives and Strategies
- Farm Africa Strategy 2021-2025: Aims to support one million smallholder farmers by 2025 .
- African Leaders' Commitment: To end hunger by 2025 through investments in agriculture
- Technology and Innovation: Leveraging technology to boost agricultural productivity and resilience .
Overall, farming in Africa is expected to continue growing and transforming, driven by investments, innovation, and a focus on sustainability.
CRA MEDIA - International
