Page 15 - Farm and Food Policy Strategies for 2040 Series

“We will see the retailer asserting more and more pressure on how farms are run. When you ask
consumers who they trust more – food companies or farmers, 58% say the farmer. But the farmer
seems to be losing more and more control,” Sciotto adds.

Markets: Commodity prices have been relatively low, but that hasn’t stopped farmers in many
parts of the world from increasing production. As the global population continues to grow,
analysts estimate that we’ll need a 70% increase in the food supply.

“South America is likely to become the breadbasket of the future. American farmers are in a
tougher competitive environment as markets shift and new players emerge stronger to meet
global demand,” says Sciotto.

Government: The farm bill has historically played an important role in providing support for
many farmers and rural areas through commodity programs, crop insurance, conservation, and
rural development. The Congressional Budget Office projects the 2018 Farm Bill will cost
$428B over the next 5 years.

However, other aspects of government policy, like trade and monetary policy, can also put
operations at risk. As a result of the trade war, the value of total U.S. agricultural exports in 2019
is expected to fall to $141.5 billion, down $1.9 billion from 2018, according to the Department of
Agriculture’s (USDA) latest projections.

In addition to ongoing concerns about trade, labor and regulatory reform continue to be top
issues. Most growers believe federal regulations have generally been harmful to agriculture,
according to Aimpoint Research.

Sciotto says all six of these trends are converging and the speed is accelerating. “It’s putting a lot
of pressure on farmers and on traditional institutions of agriculture.”

“We have to acknowledge as an industry that we are going to serve a bifurcated market.
We are going to have large, sophisticated vertically-integrated operations run by high
business IQ farmers and we are also going to have small, direct-to-consumer operations
serving their niche.”

Sciotto says agribusinesses who serve traditional agriculture will have to move faster and add
value.

“The concept of one-size-fits-all is fading in farm channels. The farms of the future will be
diverse, have different needs and will look to their vendors and suppliers to provide tailored
solutions and to be constantly innovating.”

www.Agri-Pulse.com 13