The video above is eye opening if you don’t understand modern farmers. When I traded, we had a fair amount of traders on the floor that grew up on a farm. They’d be the first to tell you farmers are quick to adopt new technology when it makes them more productive. When I traded lean hogs and we were bullish we used to say, “People gotta eat”.
People like to think farmers are backward hayseeds. Nothing is further from the truth. I was at a pitch competition once in a rural area of Illinois and someone actually wondered if farmers had cell technology or not.
I know about the farm to table movement. I am totally familiar with it. My first angel investment back in 2006 was in Tallgrass Beef. My wife loves organic farms and has voluntarily worked on some of them. I am a big fan of the raw milk movement. I think that small food production and small farms can be incredibly creative and do things that large farms can’t.
There is an immovable object though. People have to eat. Ideally, the cheaper access to food the better. American food costs used to consume a considerable portion of the American budget. With technological advances, that has changed. There is no one starving in America anymore.
We have seen technology invade all occupations but in the next ten years it will invade farming like never before. Sensors, drones, chips implanted in livestock, autonomous tractors and autonomous delivery systems and artificial intelligence will allow operations to be smoother and better decisions to be made. That should drive the cost of food down further.
Farmers also access markets and manage risk using technology. As algorithms become commoditized, farmers can use them to help them trade options, futures and lock in profits. We are starting to see some unbundling of centralized marketplaces as farmers get bigger. It’s early in the game, but blockchain might have a lot to say about the unbundling of centralized marketplaces.
This is a reason why it’s important to get cutting edge technology pipes out to rural areas. Not only are the kids in rural areas getting left behind because it makes learning in school tougher, but the business of farming is slower.
Personally, I would like to see the subsidy swamp drained in Washington DC. All the subsidies and rules around growing food screw up the marketplace. What gets planted and how much of what gets planted is out of whack with real demand. Our diets get messed up because government standards have nothing to do with a lot of the science and everything to do wth the lobbying. Innovation would happen faster without subsidies. Realistically, that will never happen though. It’s unfortunate.