The future of farming is not going to revolve around higher yields.
There is a misconception out there that farmers are responsible for feeding the world. Maybe it comes from the broken-record references to the “doubling of food production by 2050 to feed 9 billion people”, or the changing consumer culture that demands to know who, exactly, grows food. Or maybe it’s just a desire to pass responsibility down to the source. But wherever we got this idea- it’s wrong.
The reality is that farmers are already growing more than enough calories to feed the world. And it’s likely that, with rapidly changing, global consumer preferences, the food we produce, and how we produce it, will need to change many times before the nine billionth human takes her first breath.
But if we discard this “grow more food” idea, where does that leave us? What should the goals of our agricultural pursuits be, and more importantly, where do we go next?
Let’s start with where we are. Right now, American farms are going through an unprecedented change. Commodity prices are at historic lows, multi-national businesses are continuing to consolidate (and raise prices), the average age of farmers is going up, and fewer and fewer farms stay in business with each passing year. American farms are facing tremendous pressure to “get bigger or get out” because of massive capital intensity and the millions of dollars on the balance sheet that are required to make even a meager annual income.
Without the “2050” narrative, higher yields don't need to have a part in this transition.
We’re looking to get from here; a risky, unfair, shrinking farm economy to a future where there are not only more farmers and more competition for their business, but where those farmers are also more secure and more willing and able to adapt to the changing demands of a global marketplace.
Obviously, yield will continue to be important, because in the broadest sense, more crop per acre is more income per acre, and more income per acre moves us closer to more secure and adaptive farmers. But in recent years especially, more yield leading to more income hasn't always panned out. As a matter of fact, over-emphasis on high yields might actually be hurting farm outcomes.
This is because for several years, even average yields in the US were extraordinarily high (175 bu/A for corn in 2016 shattered the previous record), and squeezing a few extra bushels from an acre of land often requires costly products or worse, bringing more marginal areas under production. Farmers face many trade-offs when making these kinds of decisions, but without access to objective information, the most cost-effective decision is often unclear. And cost-effectiveness, much more than yield, is the key.
Marketing materials from across the industry have, for years, preached that they can help farmers get higher yields. But unless you’re farming for trophies, paying $10, $20, or $50 an acre for products or services that reliably promise, at best, a few extra bushels, just doesn’t make good business sense. The ag industry, and ag technology in particular, will have to stop focusing on raising yields and start focusing on raising farm revenues and profits if they hope to stay relevant.
And the evidence is already starting to pile up. Research has shown that the biggest farms in the US don’t prioritize high yields, they prioritize profitability, indicating that farms that have been able to succeed and grow, even in this tough economy, have done so not with bin-busting yields, but with aggressive balance sheets that prioritize return on investment over braggability.
I’ve known many farmers who, despite being incredible at their jobs, think of themselves more as agronomists, environmentalist, or machinist than as entrepreneurs. Unfortunately, farmers of the future might not have the luxury to be just growers- they’ll also have to be savvy business people, which will mean making tough decisions about what’s worthwhile in terms of the bottom line. To inform these decisions, farmers will need access to the best information that’s available, and more importantly, they’ll have to act on it.
Does all of this mean that farmers can stop worrying about yields this year, next year, and for the next decade? Of course not. Your product, and how much of it you produce, matters. But the right decision might be to skip an in-season application or opt out of a seed treatment that doesn't offer enough ROI, even if it hurts your yields. The farmers who come out on top of today’s farm economy will be the ones who found a competitive advantage not by topping 300 bu/A corn, but by radically controlling input costs, optimizing every practice and decision, and finding new ways to add value to their products.
2017 is a good year for a new story. Farmers are not solely responsible for making sure no one goes hungry- that’s our job as a society. Farmers, like the rest of us, are responsible for being good at their jobs, for doing more with less, for turning soil and sunlight into opportunity. Getting caught up in feeding the world only distracts from the farmers’ true responsibility- to carry on one of humankind's most ancient and noble traditions by running the best damn farms they possibly can.
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The Voice of the Farmertells the story of modern day farming through a combination of candid quotes from farmers and analysis of real farm data covering of millions of acres.
The views expressed in this article are the author's alone and not those of Farmer's Business Network, Inc., its affiliates or members.