What key issues will your agricultural operation face over the next 20 years? Are your concerns in line with other producers’ worries?
Farming has grown increasingly complex—and a recent farmer sentiment survey by Pinion sheds some light on key risks and challenges facing agricultural producers. Pinion recently surveyed farmers and ranchers about the key issues they foresee over the next two decades for their farm business and its place in the global food system. More than 40 producers responded. Here’s what they told us:
1. Labor challenges. Many respondents highlighted difficulties in finding and retaining skilled labor, exacerbated by increased labor costs, labor shortages and the aging farmer population. The need for new talent in farming as older generations retire is a significant concern. Many farms and agricultural businesses rely heavily on immigrant labor, which may become more difficult to secure in the next several years.
2. Regulatory and legal pressures. Increased regulation of agriculture, environmental regulations and higher taxation were frequently mentioned. These include specific issues like water management, herbicide/pesticide use and carbon credits. In addition, some farmers are managing and utilizing new conservation initiatives to improve agronomic and financial outcomes—as well as meet customer requests.
3. Technological advancements. The necessity and challenges of adopting new technologies and automation in farming practices were noted. This includes both the opportunities and risks associated with such transitions, such as dependency on technology and the need for skills to manage these new tools. While agriculture has undergone a continuous technological revolution, deciding when to adopt new technologies continues to be a key decision for many operations.
4. Economic viability. Concerns about the narrowing gap between production costs and profit margins, high input costs and the overall financial sustainability of farming operations were common. This includes the impact of global market conditions on local farming economics. Understanding true cost of production and maximizing market opportunities will be key to future survival.
5. Climate change and environmental concerns. Many responses included concerns about the impact of climate change on farming, such as extreme weather conditions, drought and the need for sustainable and environmentally friendly farming practices.
6. Global market dynamics. The impact of global markets and international competition, especially from countries like Brazil, and the effects of geopolitical tensions and potential trade disputes and tariffs were mentioned as factors that affect local farming economies.
7. Succession and interest in farming. Not all farms have a clear succession strategy. For some, the lack of interest from younger generations in pursuing agriculture as a career, coupled with a high percentage of current farmers nearing retirement, poses a significant challenge to the future of farming. Even farms with a clear successor will still face challenges to ensure that all parties are treated fairly, the transition is structured for success and family members are aligned.
8. Consumer perceptions and demands. Changing consumer demands, increased desire for traceability and negative perceptions of farming practices among the general public were highlighted. This also includes the need for better education and PR for agriculture.
9. Urbanization and land availability. Issues related to urban sprawl, land acquisition costs and the competition for land use between agricultural and urban development were noted. In some cases, this may provide a opportunity for some operations who can optimize their most valuable asset. In other cases, farms may find new social license pressures as urbanization encroaches on their operation.
10. Innovation and agility. The need for continuous adaptation to technological advancements, such as autonomous machinery, blockchain for traceability and the structural changes necessary to accommodate these technologies, were also significant themes.
Mitigate Risks to Improve Your Farm Health
For many operations that share these ongoing challenges, managing the multiple risks of an operation can feel daunting. There are ways to help mitigate these challenges and improve your farming operation. Here are some suggestions from Pinion experts:
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Don’t go it alone. The best operations typically embrace expert advice and guidance from peers. Consider joining a peer group or have an outside advisory board to gather more ideas and potential solutions.
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Watch finances like a hawk. The next several years may be some of the most challenging for many farming operations in years. Pinion experts can ensure you are able to capture the most value from the operation through farm management and marketing expertise. Additionally, government support programs can make a significant impact on profitability. Our farm program experts can ensure you are maximizing your potential for government support for your farm.
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Make good strategic choices. For some operations, challenges provide opportunity. Emerging revenue or growth opportunities are still likely for some operations. Get the expert advice you need to ensure you are positioning your operation for long-term success.
Reach out to a Pinion strategic ag advisor to position your operation for long-term growth, risk management, and success.
