Climate and Tech Expected to Affect Ag Most This Year
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Every year before the ball drops in Times Square, it seems everyone wants to pull out a crystal ball and prophesize what the new year will bring. And the ag industry loves a good prophet.
Before 2023 became history, Forbes Magazine took its shot at predicting agriculture’s highlights for 2024. So before Father Time turns the predictions stale, I thought it might be insightful, or at least entertaining, to provide some color commentary on the article, which focused on the following five areas where change in agriculture could be the greatest.
1. Farmland Holds the Key to Carbon Management
No different from last year or the prior year, agriculture has a bull’s-eye on its back when it comes to carbon intensity. According to the USDA Economic Research Service, U.S. agricultural operations are responsible for 10.6% of the nation’s overall greenhouse gas emissions. Climate scientists and Al Gore have told us this for years now. Expect the barrage of white papers and warnings to continue in 2024.
The good news, according to the pundits, is it will become increasingly clear this year that farmland is the key to carbon management. By default, nature has been seen as the most scalable way to remove CO2 from the atmosphere. What is becoming more obvious to those outside the sphere of agriculture is that farmland is the best place to store it.
Look to see more announcements at the consumer packaged goods level regarding programs and collaboration across industries and sectors to foster regenerative practices at the production level. Companies such as Walmart, PepsiCo and General Mills are seeking programs able to scale such practices across millions of acres.
2. Alternative Proteins Will Recover From Their Sophomore Slump
Last year, the stock market and the population’s tastes soured on meatless burgers and chickpea chicken nuggets. Beyond Meat’s market cap plummeted from an all-time high of $14.2 billion to just more than $500 million at the turn of this year.
But don’t count out the alternative protein industry yet. Those quoted in the Forbes article anticipate 2024 to be a renaissance year for animal-based product substitutes.
The reason for such renewed hope is a tactical marketing change adopted by the second wave of alternative protein startups. Instead of taking full-blown consumer-ready products direct to the grocery store shelf and the fast food drive-through lane, they are focusing on selling alternative protein products as ingredients.
For example, the Every Company is touting that “the world’s first liquid egg made without the hen” could replace real eggs in thousands of processed food items. Rue the day these eggs find their way into my favorite lemon meringue pie.
3. Forget Counting Calories. Count Carbon
A new diet seems to be on the table every new year. This year, paring down the amount of carbon in your life may be as important as limiting your calories. Just like requirements for disclosing calories through food labels, the social, political and regulatory environment is forcing food companies to be fully transparent about their carbon footprints.
Instead of carbon credits, experts say carbon insets are needed to move the climate needle. With recently passed climate disclosure legislation, such as California’s SB 253, expect more food companies looking to measure, report and reduce their carbon emissions.
This switch will put pressure on producers as food companies off-load the burden of carbon reduction on them. Look for additional emphasis on cutting methane emissions from livestock through innovative feeds and carbon-capture techniques and improving soil health through biotech innovation, data and artificial intelligence.
4. Technology Will Make Ag More Hip and Exciting
Agriculture has long been characterized in literature, and even nursery rhymes, as boring and depressing—think Grapes of Wrath and Old MacDonald Had a Farm. Well, technology is continuing to turn this industry on its head.
Specialty crop operations’ use of automation will grow quickly as ag labor shortages persist. Meanwhile, the food prep industry is transforming as food- and medicine-focused companies take root. Think HelloFresh and Blue Apron meet your medical dietician. Companies such as ModifyHealth are tailoring chef-inspired medical meals to support consumers’ specific health needs, and companies such as Farmer’s Fridge allow you to select a green goddess salad or Thai noodle bowl instead of a Snickers bar from a vending machine.
5. Capital Investment in Ag Will Be Even More Deliberate and Disciplined
Once viewed as the hot new space for disruption, the ag tech sector is now weeding out the venture capital investors who entered it with hopes of quick wins. That culling really started in earnest two years ago and is predicted to continue this year.
But all is not gloom and doom in the ag startup arena. Investors see the market stabilizing and valuations returning to more realistic levels. Quality companies that are scaling, have good economic fundamentals and growing customer demand will likely find the capital they are seeking in 2024, but expect no more free lunches.
So there you have it. This recaps the Forbes take on agriculture in the new year: climate, carbon, technology, money and a world with eggs but no chickens.
If you think that’s weird, then just wait. The year has only begun. In agriculture, nearly anything can happen. Just wait a day.
