Just in time: Agribusiness meets AgTech

Meeting crisis with ingenuity

U.S. agriculture confronted an environmental crisis of unprecedented magnitude during the Dust Bowl of 1930 to c. 1940. Drought, windstorms, and topsoil loss decimated huge tracts of American farmland.¹ Farmers had to improve their land management practices and began using cultivation technologies that included crop rotation, strip farming, and contour plowing. New approaches to farming helped end a disaster then, and they will do the same, today.

Modern tools of AgTech

How can agribusiness respond most effectively? By shifting business models and adopting new solutions that address the problems of our times. The agricultural tools and technologies available now are mind-boggling in their scope and sophistication; they rival those of any high-tech operation.

These assets have the potential to increase profitability, stability, and efficiency of agribusiness ventures. They include (among others):

• GPS and satellite imaging
• Artificial intelligence (AI) and the Internet of Things (IoT)
• Machine learning, robotic automation, and remote sensor controls
• Sustainability in packaging

Benefits

Driven by the most advanced digital technologies, AgTech yields powerful, far-reaching advantages, such as:

Conserving water, restricting potential pollutants

Because of the remarkable precision of AgTech tools, farmers can apply minimal amounts of water, pesticide, and fertilizer only to specific areas – or even to selected, individual plants. This detailed, controlled approach allows for:

• Higher crop output
• Lower operating costs and food prices
• Less water, fertilizer, and pesticide use
• Decreased chemical runoff
• Improved livestock

Robotics for profit and efficiency

Robotics often partner with other AgTech tools, including remote sensors, drones, AI, and GPS. These tools help farmers accurately monitor and manage natural resources, like soil, water, and air.

Robotic technology also gives growers more control over crop and livestock welfare and production. In addition, it streamlines processing, distribution, and storage procedures, which results in:

• More efficiency and lower prices
• Better growing conditions, safer foods
• Minimized environmental impact²
• Uninterrupted, 24/7 service

AgTech and sustainable food packaging

AgTech emphasizes the practicality and profitability of transitioning to an economy rooted in clean energy and a minimal carbon footprint. Whether in the distribution, wholesale, or consumer markets, most foods are packaged in methods adapted for transportation, marketing purposes, or other needs. In lieu of traditional packaging materials that are not easily reused (including plastics), AgTech innovation is introducing:

• Biodegradable, plastic-free packaging for produce
• Processed food packaging that minimizes material use
• Compostable package that nourishes the soil rather than occupying space in landfills

By supporting a sustainable approach to packaging materials, agricultural and food processing operations can contribute to the success of their own enterprises as they win more customers and protect the environment.

The future of AgTech: By the numbers

In part because of the high demand for food amidst extraordinarily adverse circumstances, the outlook for AgTech implementation and profitability is bright. As of 2022, North America dominates the AgTech market with a 45% revenue share. Analysts attribute market growth to increasing government initiatives and incentives for agricultural expansion.

In 2023, the estimated global market size of AgTech will reach nearly $22 billion,³ and analysts project it to attain more than $43 billion by 2030 at a CAGR of 10.2%.⁴

Ready, set, where to start?

It’s clear that AgTech offers newer, better ways to cultivate, harvest, manage, store, and distribute your products. But not surprisingly, these money- and time-saving technologies can require substantial investment. In the interests of capital conservation and versatility, financing offers the best options for AgTech acquisition.

Vetting your finance source

Equipment financing helps you acquire the technology you need to realize a more sustainable business model. But financing can be more than a source of immediate, flexible funding. The right financial provider can help you leverage your assets and fine-tune (or even develop) your innovation strategy.

Here are some qualifications to check as you evaluate funding providers:

• AgTech experience plus knowledge of agribusiness assets
• A proven track record in lease structuring
• A clear understanding of your business
• A trusted, reliable source of capital
• A creative approach to big-picture opportunities

The dawn of a digital harvest

For agricultural enterprises ready for new, better ways of doing business, the future looks bright. A finance provider with proven AgTech experience can help you develop significant, sustainable growth.