Will agribusiness be a dynamic future industry?
Published March 24, 2022
One of the big questions about our economy is what industries will lead it in the future. If asked, most people would likely say technology, health care, finance, and maybe entertainment. Knowing the growing industries of the future is important for several reasons, but is especially significant for job seekers and the educational institutions that will train them.
What if I told you many futurists think a leading industry in upcoming decades will also be one of our oldest industries? Indeed, many predict that agribusiness will be among the dynamic leaders in the future economy.
Agribusiness is a broad industry that includes farming, the processing of farm output into usable products, and the delivery of those products to consumers. For decades I’ve been tracking the economic impact of agribusiness in North Carolina, and my latest measurements show its annual impact is approaching $100 billion.
There are three key questions about agribusiness’ future. First, what are the forces pushing agribusiness to change? Second, what specific changes will we see in agribusiness? Third, how will emerging changes in agribusiness affect North Carolina?
The forces pushing changes in agribusiness are based on one simple fact – food and nutrition are necessary for life; indeed, food and nutrition – including water – may very well be the first necessity for life. Therefore, it’s in the interest of our existence to improve the availability, cost, and nutritional value of food.
There have been improvements in each of these elements. Hunger in our country, defined as not having enough quantity of food, has dropped over 25% as a percent of the population in the last decade. Also, although there have been recent spikes in food prices due to the pandemic, spending on food as a percent of the average consumer’s disposable has been cut from 17% to 8% over the past sixty years.
There have also been improvements in the nutritional quality of food. Spoilage rates have plummeted with modern refrigeration methods. Numerous foods have been developed with higher nutritional values and fewer components that can lead to disease and poor health.
But there’s more to do, especially with the additional challenge that new issues are emerging. A big one is climate change. Climate change may lead to higher temperatures and more volatile weather, meaning a greater frequency of droughts and wet seasons. Weather has long been farmers’ biggest concern, and the concern may become larger.
Another issue is reduced land available for farming, especially in fast-growing states like North Carolina. Not only will there be less land for farmers, but in regions where the population is growing, the prices and costs for the remaining land will be higher.
A third challenge for our agribusiness industry is international competition. Farmers and other agribusiness firms have always had to compete with other farmers and firms around the world, but with improved transportation and faster flows of information the competition has become more intense.
The conclusion is that for agribusiness to meet the goals of improved accessibility, lower costs, and better nutrition, it will have to adapt, innovate, and – in some cases – completely re-make itself. Although this may sound daunting, it can also be exciting. Rather than a stale industry that continues to do what it’s always done, agribusiness will be dynamic, cutting-edge, and attractive to new ideas and workers seeking excitement.
Some of the future innovation in agribusiness will take place at universities. For example, the university where I worked for over four decades – North Carolina State University – recently created a new plant sciences facility and initiative. Among its goals are to develop inter-disciplinary research, education, and outreach to help improve crop yields, create new plant varieties that can cope with climate changes, pests, and other challenges, and to insure the long-run viability and growth of agribusiness in North Carolina. There are complementary efforts focused on the livestock component of the state’s agribusiness.
If successful, both the private and public work to spur innovation in agribusiness will pay-off not only financially, but also in meeting the three goals of accessibility, affordability, and health. With its historic background in agribusiness, the importance of the industry to the state economy, and the involvement of the state’s higher education institutions in the industry, North Carolina can be a leader in taking agribusiness to the next level.
At mid-century, will we look back at agribusiness as one of the most creative, innovative, and exiting industries of the 21st century? You decide!
Walden is a Reynolds Distinguished Professor Emeritus at North Carolina State University.