Top Trends & Challenges for Agriculture in 2021
FLM Harvest is fortunate to have a talented Board of Advisors filled with industry veterans who provide strategic input to our agency and support our work with clients. We appreciate their distinct perspectives on the trends and challenges facing American agriculture and the U.S. food system.
While 2020 turned out to be anything but predictable, American farmers and ranchers may look back with pride at how they responded to the pandemic’s many challenges. Throughout many obstacles, they remained resilient and dedicated to keeping America fueled, fed and clothed.
Since COVID-19 will continue to impact our lives, we invited members of our Board of Advisors to weigh in on what they think will be the top trends, challenges and opportunities for the food and agriculture industries in 2021.
Global demand will impact farm profitability and change how products are marketed.
According to former Kroger executive Bill Boehm, the most significant trend that will impact American agriculture is global nationalism. That means a continued struggle for affordable labor and access to world markets. Cost of goods like aluminum and steel will rise, challenging farm profitability.
Danita Rodibaugh, Indiana pork producer and past U.S. Meat Export Federation chair, agreed that on-farm profitability is strained when exports don’t go as planned. In 2020, when China lagged on phase one trade agreement purchases, the price forecast was at or below the cost of production, forcing producers to make tough decisions. When China started buying and working toward the purchase agreements, prices rebounded significantly, allowing for a modest rebound in profitability.
“We need to continue to push for development of diversified markets globally, while taking advantage of present opportunities. Our commitment to producing safe, high-quality food sustainably is the gateway to global growth. We have commodity organizations, collaborations and public-private partnerships that need to continue the push to develop broader opportunities for profitability,” explained Rodibaugh.
Heightened focus on the food supply chain will drive improvement and transparency.
A key learning that came out of the initial shock of COVID-19 is how quickly food chain disruptions can impact daily lives. While farmers, companies and distributors all quickly pivoted to address challenges, the pandemic shined a harsh light on opportunities for improvement that will continue to be addressed in 2021.
“Implementing additional safety measures, new certifications, flexibility with shipments and deliveries as new issues pop up overnight will add costs to food production that will likely be passed on to customers,” said Gregg Halverson, former president/CEO of Black Gold Farms. “However, with innovation and transparency, hopefully we can mitigate the negative impacts.”
Rodibaugh supports this idea and sees it as an opportunity to help people learn about our food system.
“The spotlight has become even brighter on agriculture, food processing and distribution during COVID. This presents an opportunity (for our industries) to continue to share the sustainable story of food production,” explained Rodibaugh.
Interest in plant-based protein alternatives may drive more animal welfare conversations.
The continued investment in plant-based alternatives to meat and dairy may heighten sensitivities around animal production and its influence on climate change.
“Even though the introduction of new options may not alter consumer sales of meat products significantly in the short term, I believe it will influence the discussion on meat production and processing, heightening animal welfare discussions in 2021,” said Marianne Smith-Edge, nutrition expert and founder of AgriNutrition Edge.
Food and CPG businesses will double down on environmental stories.
In the same vein as animal welfare, conversations around sustainability, climate change and regenerative agriculture will continue to pique consumer interest and shape buying habits. In response, food and ag organizations will put more emphasis on sharing their unique environmental practices to set them apart.
“The pandemic has reinforced the importance of sustainable eating in the minds of consumers based on various recent consumer studies. Taste, price, healthfulness and convenience remain the top priorities for influencing consumer food purchases but environmental sustainability continues to climb. Value-based eating is reflected in Gen Z purchasing habits and will continue to influence the food value chain from ag to CPG companies to retail,” explained Smith-Edge.
Virtual cost cutting could hurt business growth.
There’s no doubt that working from home, cutting travel and holding more meetings virtually have helped companies reduce costs. However, strategic planning and sales expert David Parker worries that some may take it too far in the short term by reducing their sales force. This is a big mistake in his mind, especially for organizations targeting growth.
“Cutting costs that hurt an organization’s ability to take care of customers’ needs is a recipe for disaster,” Parker said.
Despite potential roadblocks, these experts also believe the industry has what it takes to meet any challenges that arise by focusing on positive outcomes and working together.
“I believe the ag community will indeed rise up to meet the challenges. Additional regulation and reporting will be a given, and it will be up to our industry to deliver based on financial feasibility,” Halverson said. “Innovation and new ways of doing business will be imperative.”