🚜McKinsey Global Farmer Insights 2024

McKinsey Global Farmers Insights, 'Vaccinating plants', a revolution in fencing, an electronic Cherry

October 27, 2024

It does not matter how slowly you go as long as you do not stop.

Confucius

In today’s edition:

Report:
McKinsey Global Farmer Insights 2024

Industry Insights:
- How ‘vaccinating’ plants could reduce pesticide use and secure global food supplies
- One innovation that will revolutionize how we think about fencing
- Electronic Cherries

Enterprise
-Capital raises
-Partnerships
-New product

5 Recommended reads

REPORT
McKinsey Global Farmer Insights 2024

The agricultural sector is experiencing significant transformation amid mounting challenges, creating both urgency and opportunity for technology adoption. Recent McKinsey research, surveying 4,400 farmers across major agricultural regions, reveals a complex landscape where traditional challenges intersect with technological solutions.

Current Market Context

Input costs remain the primary concern (48% of farmers, down from 63% in 2022), but extreme weather events are rapidly emerging as an equal challenge. This shift is strategically significant as it:

  • Drives demand for predictive technologies and resilient farming solutions

  • Creates opportunities for integrated risk management platforms

  • Accelerates adoption of precision agriculture technologies

Commodity price volatility, particularly in North America, has emerged as a critical third factor, leading to:

  • Increased demand for hedging tools and market intelligence

  • Greater focus on operational efficiency

  • Enhanced interest in cost-reduction technologies

1. Regional Technology Implementation

  • North America demonstrates leadership with 61% digital agronomy adoption and 51% precision agriculture hardware utilization

  • Latin American markets show robust growth in precision agriculture, particularly in Brazil

  • European adoption lags, with only 27% implementation of yield monitoring technologies

  • Emerging markets like India and Mexico display increasing interest in basic digital tools

Strategic Significance: These regional variations create differentiated opportunities for:

  • Market-specific product development

  • Targeted investment strategies

  • Customized implementation approaches

Considerations and Scale Economics

Farm size significantly influences technology adoption rates:

  • Large operations (3,500+ acres in U.S., 3,700+ acres in Brazil) achieve better ROI on tech investments

  • Smaller European farms (averaging 450 acres) struggle with technology cost justification

  • 53% of North American farmers cite ROI uncertainty as a primary adoption barrier

2. Technology Adoption Landscape

Digital Agronomy (Leading Edge)

Current State:

  • U.S. leads with 61% adoption

  • Yield monitoring dominates in North America (60%) and Latin America (49%)

  • European focus on disease management (28%)

Implementation Strategy:

  1. Scale-based solution development

    • Large operations (>2,500 acres): Comprehensive integrated platforms

    • Medium operations: Modular, scalable solutions

    • Small operations (<450 acres): Cost-effective, focused tools

  2. ROI-Driven Adoption

    • Clear metrics and benchmarks

    • Documented success cases

    • Performance guarantees where feasible

Precision Agriculture Evolution

  • Hardware adoption at 51% in U.S.

  • Sprayer section controllers showing strong cross-regional adoption:

    • North America: 78%

    • Latin America: 75%

    • European Union: 49%

Market Development Priorities:

  1. Technology Integration

    • Seamless data flow between systems

    • Unified control platforms

    • Mobile-first interfaces

  2. Scale Economics

    • Shared equipment models for smaller farms

    • Tiered service offerings

    • Flexible pricing structures

3. Sustainable Technology Integration

The convergence of sustainability and technology presents significant opportunities:

  • Precision application technologies reducing input costs while improving environmental outcomes

  • Rising adoption of biocontrols and bionutrients, particularly in Brazil

  • Limited but growing interest in carbon program technologies

Current Adoption:

  • Variable rate applications: 40%

  • Bionutrients: 31%

  • Biocontrols: 20%

  • Carbon programs: 12%

Strategic Development Areas:

  1. Sustainability Solutions

    • Carbon market enablement

    • Biological product integration

    • Resource optimization tools

  2. Market Development

    • Education and awareness programs

    • ROI demonstration

    • Implementation support

4. Digital Transformation

Channel Evolution:

  • Traditional preference for in-person initial purchases

  • Growing acceptance of digital repurchasing

  • Regional variations in digital engagement

Strategic Approach:

  1. Omnichannel Strategy

    • Integrated digital/personal service models

    • Data-driven decision support

    • Automated reordering systems

  2. Regional Adaptation

    • Market-specific digital solutions

    • Local partnership development

    • Cultural consideration in interface design

Strategic Recommendations

Key focus areas should include:

  1. Scale-Adapted Solutions

    • Development of cost-effective solutions for smaller operations

    • Scalable technologies for large enterprise farms

    • Regional-specific technology adaptations

  2. ROI Enhancement

    • Clear demonstration of financial returns

    • Integration of multiple value streams

    • Risk mitigation through technology adoption

  3. Market Development

    • Educational initiatives to accelerate adoption

    • Partnership models for technology deployment

    • Financial solutions to enable broader implementation

INDUSTRY INSIGHTS
How ‘vaccinating’ plants could reduce pesticide use and secure global food supplies - Frontiers

As climate change reshapes global agriculture, securing food supplies has never been more urgent. Our heavy reliance on pesticides is increasingly unsustainable. Pests are evolving to resist them, and the environmental costs—carbon emissions and biodiversity loss—are mounting. That’s where induced resistance comes in, offering a sustainable alternative by using plants’ natural immune systems to fend off threats.

Pesticides have enabled large-scale farming but come with serious downsides: they harm human health, wildlife, and the environment, and pests are becoming more resistant. Induced resistance, essentially "vaccinating" plants by triggering their immune systems, helps them defend against a broader range of pests and pathogens. It’s faster than traditional breeding and harder for pests to outmaneuver.

While induced resistance isn’t a standalone solution, it plays a critical role in integrated pest management strategies. For instance, defense priming activates a plant’s defenses after mild stress, making it more resilient to future attacks. Some of these protective effects can even be passed down to future generations, offering longer-term crop resilience.

The potential benefits go beyond pest control—induced resistance could also improve food quality and nutrition. But to make this a reality, we need more real-world research to scale these methods from lab to field. Governments, researchers, and industry leaders must collaborate to bridge the gap between discovery and practical application.

As Professor Brigitte Mauch-Mani from the University of Neuchâtel puts it, “Induced resistance is complex, requiring tailored approaches for each crop and environment. But with the right support, it could be a game-changer for sustainable agriculture.”

induced resistance offers a unique opportunity to back innovations that reduce pesticide use, promote healthier crops, and align with the growing demand for sustainable food systems. It’s an investment in agriculture’s future and in a healthier planet.

No more fencing for livestock

U.S. ranchers spend significant time and money building and maintaining fences, but that could change with the rise of "virtual fencing" (VF) technology. This innovative system uses smart collars to herd and monitor livestock, and it’s gaining traction in the U.S. thanks to support from the Natural Resources Conservation Service (NRCS), a division of the USDA, which now offers funding to help farmers implement VF projects.

Virtual fencing works similarly to geofencing systems used for dogs. Smart collars on livestock send a warning sound when animals approach a virtual boundary. If they move closer, a mild electric shock is delivered. Ranchers report that it takes anywhere from a single attempt to about ten days for livestock to recognize the auditory warning and stay within the set boundaries.

This technology offers unprecedented flexibility for managing herds. Ranchers can create virtual barriers anywhere—around water sources, solar farms, or wind turbines—and move fence lines with the touch of a button via a mobile app. In emergencies like fires or floods, VF can quickly redirect livestock to safety, eliminating concerns about damaged fences.

Additionally, VF systems provide real-time tracking of livestock. The collars monitor each animal’s location and behavior, helping ranchers detect issues like illness or injury based on unusual movement patterns or separation from the herd.

However, VF isn't without challenges. The cost is significant, with collars from companies like Nofence costing $329 per cow and $229 for goats and sheep, plus a monthly subscription fee. Battery life, often powered by solar, can also be an issue in areas with limited sunlight.

Despite these challenges, several companies—including Vence, eShepherd, and Corral Technologies—are trialing VF across the U.S., with growing interest from ranchers. The NRCS is offering financial support for VF projects, with the first application deadlines expected by November 2024 and contracts funded in March 2025. More information here.

Electronic Cherries

INTA(National Agricultural Technology Institute, Argentina) of has developed an electronic cherry to improve the quality of Argentina's exported cherries. In 2024, the country exported 7,210 tons of cherries to markets like Europe, the U.S., and China, with an average price of $4 per kilo. This innovative technology tracks the impacts fruits endure during packaging and transport, helping reduce surface damage, known as "pitting," which lowers the fruit's commercial value.

The electronic cherry, created by INTA’s team, is the same size and weight as a real cherry and follows the same process as the fruit, detecting where impacts occur. According to studies, impacts can cause losses ranging from 10% to 40% of cherries in packaging plants. With this technology, losses could be reduced by up to 50%, saving about $720,000.

The prototype features improvements like a Bluetooth transmitter and rechargeable battery, allowing for direct connection to mobile devices. It also includes an accelerometer to more accurately measure impacts. The electronic cherry has generated significant interest, even from Chilean producers, and promises to optimize packaging and transportation processes, reducing waste and economic losses.

ENTERPRISE

Syngenta Crop Protection and Taranis Partner to Drive AI-Powered Agronomy Solutions.

Purpose: Improve farm productivity, streamline sustainable practices, and support U.S. farmers in data-driven decision-making for long-term farm profitability.

Vestaron Corporation Announces Strategic Collaboration with ADM for Production of Peptide-Based Crop Protection Products

Purpose: Meet growing demand for sustainable crop protection through Amd’s manufacturing capacity

Carbon Robotics raises USD$70M for its AI-Powered LaserWeeder

Purpose: Expand manufacturing in eastern Washington, Roll out new software and hardware products and Support growth in eastern and southern Europe, as well as the Asia pacific region.

FarmDroid Secures €10.5M Investment for Global Expansion

Purpose: Support the global expansion of farmdroid’s autonomous solar-powered robots.

Agtonomy Closes Series A Round Reaching $32.8M

Purpose: The funding will help Agtonomy expand its team, scale operations, and grow its pilot program for autonomous equipment in agriculture.

Verdant Robotics Unveils a new product, the 2025 Sharpshooter

Purpose: To reduce chemical inputs by over 96% and hand-weeding costs by 65% through its Bullseye Aim & Apply Technology.

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