Farm of the Future

Perspectives

Farm of the Future

Agribusiness Bulletin

Innovation and technology is imperative for Australian farmers. This article is about building farms of the future.

The Agribusiness Bulletin

The Agribusiness Bulletin focuses on national and local industry, as well as cross-industry insights and trends. This includes some of the drivers we expect to shape the future of the industry and potential challenges that may arise.

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Farm of the Future

Henry Ford, who himself grew up on a farm outside of Detroit, believed that at the turn of last century only five percent of a farmer’s effort was of value. He espoused the virtues of mechanisation and wrote “the moment the farmer considers themselves an industrialist … farming will be considered among the least hazardous and most profitable of occupations” (Ford, H & Crowther, S (1922) My Life & Work, Doubleday).

In the past century there have been huge strides made in production techniques, with many aspects of a modern farming mechanised beyond what Ford could have imagined. But with an expected surge in demand for Australian commodities from a growing Asian middle class, farmers will have to improve production methods to ensure that this opportunity does not pass us by.

Improved technology and yields are linked

Click here for Australian wheat yields: 1905-2014 (kg/ha) (10 year rolling average)

The innovation imperative is further compounded for Australian farmers due to a number of factors. Over the past 25 years producers have faced a progressively worsening business environment, where on farm costs and debt levels have drastically outpaced changes in both inflation and farm cash income. Along with this we see an aging and shrinking agricultural workforce and, as can be drawn from the 1947 data (below), an affirmation of many old timers’ opinions that they don’t breed (farming) kids like they used to.

The Australian agricultural workforce has been aging and shrinking

Click here for Australian agricultural workforce analysis

Over the past 25 years input costs and debt levels have outpaced both CPI and cash incomes

Click here for on-farm operation factor indexes (1990 base year)

ITEM

DESCRIPTION

Crop and pasture chemicals ($)

Expenditure on crop and pasture chemicals during the survey year.

Fertiliser ($)

Expenditure on fertilisers and soil conditioners during the survey year.

Farm business debt at 30 June ($)

Total farm business debt at the 30th June.

Farm cash income ($)

Farm cash income is the difference between total cash receipts and total cash costs.

Wages for hired labor ($)

Wages paid to casual and permanent labour. Excludes amounts paid to contractors such as shearers and wool classers.

CPI

Australian Consumer Price Index

In the face of these obstacles farmers are turning to technology and any thought that those who work the land are resisting this change are mistaken. People are often surprised when they realise the level of technological complexity that is currently commercially available. Self-driving tractors have been navigating paddocks for over a decade and NASA satellite imagery is used to forecast grain yields months in advance of harvest.

But such technologies are just the tip of a wedge that is driving into every facet of primary production, demanding producers reassess the equipment and information and the way that they are utilised in their operations. Catalysed by the pressures of demand and knowledge that the increased usage of farm inputs with current production practices is not sustainable, on-farm technologies will continue to intensify, and much like the processing power of your mobile phone, it will be at an exponential rate.

The farm of the future will be one where technology has been used to remove the human bottleneck, one where ability of the farmer to precisely control machinery or capture, remember and apply information is no longer a constraint on production. Decisions will be made upon the intelligent and consistent application of integrated technology with information not synthesised at the herd or paddock level, but by the millimetre and gene.

Removing the human bottleneck

Click here for more on removing the human bottleneck

The four components, production, monitoring, synthesis and decision support, are all fundamental requirements of the farm of the future. And much like a barrel’s ability to hold water is limited by the shortest stave, so is the farm’s productivity restricted by the weakest framework component. Without monitoring information your actions your decisions do not improve, if you cannot store your information you cannot use it to make better decisions and precision equipment needs decision support to convert the information to actions that results in increased relative productivity.

So whether you are a farmer looking to make sense of emerging technological opportunities, an investor or financier wondering whether the investment case is acceptable or just an interested observer, stay tuned for future articles examining how the pieces of the puzzle fit together. Amongst other things we will see why agriculture is forecast to account for 80% of civilian drones, why on earth a pedometer would be relevant to bovine conception rates and how the integrated application of technology to Improve Decisions and Automate Actions will enhance the ability of Australian farmers be able to sustainably capitalise on the opportunities of the Asian century.

Author

Dan Kierath

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