Tech and The Farm

Crop yields are heavily dependent on the weather, but they are heavily dependent on technology too. We can’t expect to feed the world without advancement in genetics in the seed business. ($MON, $POT) Over the past fifty years, there have been great advances in seed genetics, increasing crop yields, and increasing the resistance crops have to pests.

The current goal is to get production to 300 bushels per acre ($ZC_F, $ZW_F, $ZS_F, $CME).

These tech developments have given rise to an anti-tech farm movement. Groups are spreading rumors that somehow, genetically modified corn or soybeans will kill you. Of course, crops genetically mutated over the years due to the randomness of pollination. But that matters little to the Luddites protesting advancement in farm technology.

We cannot possibly feed the world without increasing the amount of industrial science in farming.

I wonder what they say about the new technology that allows farmers to plow and harvest their fields without people. ($ADM, $BG, $JD) Tractors are have been going high tech for years, but this takes it to a new level.

The first steps toward high tech tractors were logistics. Tractors had sophisticated computer programs that told the farmer how to plant the field. This allowed for narrower rows, and more yield per acre. Now, farm companies are taking military drone technology and applying it to farming. The next time you see a tractor in a field, see if someone is actually driving it.

“Kinze, with the help of Massachusetts-based Jaybridge Robotics, is developing two products aimed at easing the time and labor crunch farmers can face. The drone technologies can seem almost ghost-like as a tractor crosses a field with no one in the cab.
Kinze’s autonomous planter would determine the most efficient route to plant a field and then do the sowing without a driver. A system of sensors ensures the tractor doesn’t run into any unexpected obstacles such as a fence post or stray farm animal. The technology has become feasible to incorporate into agriculture because of its growing use in automobiles, where it has driven down costs.”

Eventually the entire farm will be automated. This will drive down costs, and less labor will be required for production. This trend will cross all parts of the farming industry ($SFD, $TYS, $HOR). Meat and vegetable production will be automated as much as row crop production will be. It’s not hard to fathom a day when a drone, not a low skilled laborer, will be picking fruit and vegetables from fields($FDP, $K, $GIS).

These lower costs will affect income statements and balance sheets across the entire food industry and food chain. When you start to really look at it, it is amazing how many ancillary industries are affected. Keep an eye on technology trends-many of them will find their way onto your plate.

As we used to say when we got bullish in the Hog Pit, “People got to eat.”


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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