Agriculture and the food chain represent approximately 20% of the United States GNP. In many countries the agrarian sector is even larger.
We believe the following macro trends will have a significant impact on agribusiness firms in the future:
- Many commodities can be produced cheaply in developing countries and American agriculture will only remain competitive through continued innovation and productivity improvements.
- High global demand for commodities will create periodic scarcities in a number of important food crops. The agricultural and energy sectors will increasingly compete for water and food crops.
- Technological advancements in both biotechnology and information retrieval will drive productivity.
- Identity preservation systems from food production to final consumption will be the most important factor in food safety.
- Farm inputs such as water, labor and chemicals will fall under increasing scrutiny and restrictions. Labor shortages will increase.
- Agribusinesses will invest heavily in more efficient water and energy systems and pollution control technologies.
- Nutrition, freshness and sustainable production systems including locally sourced food will increasingly drive consumer interest.