With US inflation worsening, the research found that 80 percent of farmers now cite rising input costs as the biggest risk to profitability. These pressures are driving the adoption of new products and technologies to squeeze the most value from each acre. Fifty percent of small farmers are planning to use new yield increase products, and half of large farms, with more than 5,000 acres, are already using precision agriculture hardware such as drones.
Soaring supply chain costs are also weakening loyalties to traditional suppliers in a previously conservative industry, with one third of large farmers reporting brand loyalty is now a lower priority when selecting farm equipment.
Yet despite acceptance of agtech rising since the last survey, there are still barriers to adoption. Unclear returns on investment and poor experiences for growers continue to hinder farmers from scaling agtech. When it comes to buying new products and services, over 50 percent of farmers pinpoint customization of recommendations and adequate customer service as the biggest barriers to online purchasing.
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David Fiocco, Partner at McKinsey, says:
The farming sector is being buffeted by inflation, climate change and geopolitical conflict and is increasingly turning to new products and technologies to squeeze more value from every acre. Large farmers are spearheading the sector’s technological transformation from robotics to electrification, but they are increasingly being followed by small farmers.
