Agriculture is on the cusp of new growth, now that advancements in AI, robotics, nanotechnology and autonomous driving vehicles are showing potential to make many farming applications more targeted and more efficient. Farmers, in their continuous quest to boost margins and raise productivity, will be swift to adopt early, particularly when these innovations show demonstrative improvements that make them worth the investment. This coming wave of technological expansion over the next five years presents new opportunities in equipment ag lending and leasing.
Farmers have a long track record of innovation
A producer’s commitment to conservative, proven practices conceals how quickly they’ve ramped up their productivity in the past 70+ years by harnessing innovations in farming practices and new technologies that helped them get more done in less time. Between 1948 and 2017, farm production tripled without adding acreage and labor, according to the U.S. Department of Agriculture.
That’s because when data makes a strong case for a new gadget or implement, that’s reason enough to invest in new technologies. Because in the end, farmers are seeking to nudge their margin upward. If an innovation reduces labor and inputs while raising productivity to the point where it offsets annual loan costs, farmers will use it. In other words, as soon as it makes their operation more profitable, they’ll be ready to sign on.
In the meantime, here’s a look at some of the innovations to watch for that will play an increasingly important role in ag practices and equipment, particularly for row crops but to some extent permanent plantings.
What does AI do? By deploying machine learning and Internet of Things (IoT) sensors, the AI system analyzes data in real-time, and makes data-based recommendations aimed at best-time plantings, reducing inputs and maximizing crop yields. This data can be collected from in-ground sensors in various locations in the field, from data-collecting drones that navigate over fields to roving robots rolling among the plants. Farmers and growers gain an unprecedented level of intelligence to quickly calculate these multiple data sets and provide intelligent recommendations for targeted applications of fertilizers, insecticides and water to save inputs and maximize crop productivity. Data can be stored and analyzed to make increasingly precise recommendations year over year, giving growers and farmers the intelligence to optimize production even in the toughest growing seasons.
Market analysis shows AI will become more widespread in the coming years. Spending on AI solutions in ag is predicted to grow to $4 billion in 2026, with a compound annual growth rate of 25.5%, according to Markets&Markets.
Small, nimble and durable robotic vehicles can unlock access to row crops, granting an up-close look at the progress and conditions of individual plants.
One possible application is equipping robots with cameras and scanning technology to collect data on growth and plant conditions. These roving bots can also deliver targeted applications of nutrients and insecticides so individual plants get exactly what they need to thrive and produce.
Robotics also have exciting innovations for permanent plantings, as they are becoming increasingly capable of identifying and picking ripe produce.
A big upside to robotic technology is these devices can stay operational for 24 hours a day. As improvements to battery systems continue, so will throughput as bots gain the ability to stay out in the field longer, with briefer charging sessions.
Ultra-small nanosensors can one day be implanted in crops to diagnose disease, enhance the plant’s ability to absorb nutrients and monitor soil quality. Nanodevices might even be sprayed directly onto produce to slow ripening, improving the distribution cycle and reducing food waste.
Driverless autonomous tractors can eliminate hours of sitting in the cab and steering. This allows farmers to monitor progress from a tablet or smartphone — freeing up time to work on more strategic tasks.
Ready, set … grow with Agri-Access
We’ll soon be arriving in an exciting era for farmers and growers. As these advanced devices, robots and vehicles become accessible in the market, you’ll want to be ready to meet the new borrowing and leasing needs of your customers, who will be eager to get started in leveling up their production to become more competitive in the market.
The overarching question for your financial institution is whether your equipment loan packages offer the high-dollar lending limits, long lending terms and competitive interest rates that are attractive to farmers and growers.
A partnership with Agri-Access may be the answer to meet these needs, by helping you grow your lending portfolio and providing helpful solutions from our professional team. Our lending solutions empower you to build equipment lending and leasing packages that let your ag lending options grow and evolve with your customers’ needs.
Learn more about our solutions to help you better service your ag clients. Connect with one of our relationship managers to get the conversation started.