Agribusiness of the future | Grand Forks Herald | Grand Forks, North Dakota

By: Jonathan Knutson, Agweek
Full Article: http://www.grandforksherald.com/event/article/id/231255/group/homepage/

Guy Useldinger of GKT Farms combines a field of spring wheat in August 2011 on the south edge of Grand Forks. Herald photo by Eric Hylden.

Change is the only constant in Northern Plains agriculture. Every year, week and hour bring new challenges and new opportunities to area farmers and agribusinesses.

But sometimes the demands of the moment prevent agriculturalists from thinking about the long-term, big-picture outlook for area ag.

What does the future hold for agriculture on the Northern Plains? Agweek asked a number of officials in North Dakota, South Dakota, Minnesota and Montana what they think area ag will be like in 2022.

“Ten years is not that far away,” said Andrew Swenson, farm management specialist with the North Dakota State University Extension Service. “Unless rational reasons can be identified that would alter existing trends, one must assume that those trends will continue for another decade.”

“You can’t predict the future, but you can certainly look at trends,” said Randy L. Englund, executive director of the South Dakota Wheat Commission.

Among the officials, there’s general agreement on several things:

- Technology will become increasingly sophisticated and farmers and ranchers will increasingly take advantage.

- Family farmers still will have a role, though smaller operations far from big markets most likely will be squeezed.

- Treating the soil and environment properly will remain essential.

Below are written comments Agweek received from the ag officials. Their responses were edited because of space considerations. Besides Swenson and Englund, other officials who responded were:

- Jodie Anderson, executive director, South Dakota Cattlemen’s Association;

- Woody Barth, president, North Dakota Farmer’s Union;

- Jeff Hamre, executive director, North Dakota Soybean Growers Association;

- Doyle Johannes, president, North Dakota Farm Bureau.

- Tom Lilja, executive director, North Dakota Corn Growers Association;

- Alan Merrill, president, Montana Farmers Union;

- Meredith Redlin, chairperson, Dakota Rural Action;

- Dan Svedarsky, director, Center for Sustainability at the University of Minnesota-Crookston; research biologist, Northwest Research and Outreach Center;

- Scott VanderWal, president, South Dakota Farm Bureau.

Advancing tech

Swenson: The major theme in agriculture has been technology and economies of size. Over the last 100-plus years, the increasing capacity of machinery has replaced labor. The result is fewer and larger farms.

We may be approaching a limit to the size of machines because of limits in the transportation system. However, new technologies will continue at a rapid pace as input companies compete with innovative products. Producers will improve efficiencies with further adoption of precision agriculture and new seed traits.

Englund:A major trend that concerns the wheat industry is declining wheat acres and production in the North and South Dakota and the entire U.S. Much of this is the result of dramatic differences in yield growth trends between wheat, corn and soybeans. Yield advances in corn and soybeans can be attributed to the private investment in genetic research and biotechnology.

Recently, there is increased emphasis on development of transgenic wheat. Biotechnology will make a significant contribution to changing the competitiveness equation by increasing wheat yields.

Lilja:There has been a huge investment in trait integration into corn that has been largely positive. What frustrates farmers the most is the steep price increases for these products; 2014 will lead the way as an interesting year as some of these technologies come off patent. Our export markets, which account for 20 percent of corn annually, could be in jeopardy if a means for maintaining international regulatory approval post-patent are not found.

The Corn Belt will continue to move north and west and the real opportunities in the next 10 years will be getting average to good returns on marginal ground. GPS and other modern informational systems will aid our producers in this opportunity. The low-cost producer will always win and there will be far more of them (both large and small) on the Northern Plains than in the heart of the Corn Belt in 2022.

Anderson: Over the past 10 years, I’ve witnessed agriculture change dramatically in South Dakota. Areas that were once primarily pasture used for livestock production have been converted to tillable acres now used for crop production. Technology has played a big role in this transition as drought-resistant crop varieties have become prevalent.

Likewise, livestock producers are implementing new technologies from electronic animal identification to using ultrasound technology for pregnancy testing.

VanderWal: The old saying “You ain’t seen nothing yet” applies well. Even 15 years ago, very few people thought we would be using auto-steer, variable-rate application of seed and other inputs and controlling center pivot irrigators with cell phones. The ability for a combine operator to remotely control a tractor pulling a grain cart is now also available. Efficiency in terms of time, crop inputs and energy usage is improved greatly by the electronic technology we have available.

Market changes

Englund: While these advances appear more beneficial to larger farms, it may provide opportunity for niche markets, whether it be nonbiotech grain or perhaps a bio-engineered wheat with specific end-use quality characteristics or human health benefits.

There is also a growing trend among U.S. millers to contract with farmers to grow designated varieties to improve milling economics and functional properties essential in meeting processing and customer needs.

Barth: Diversity and specialized production for specific market desires will become commonplace, but we will never lose commodity production for the masses as food and energy demands will need to be met.

Additional niche markets will continue to open up across the world. Our affiliated cooperatives such as Dakota Pride Cooperative will be able to supply end-market products to consumers in the United States and around the world.

Product identification from place of production to market will be desired and premiums will be paid to those who accept the extra work to track their production.

Hamre: I see more biofuel production, from not only our major crops and their byproducts, but also more uses from those crops being developed and less from historical fuel resources. The expansion of diverse crops that are extremely high in oils that grow on nontraditional farm lands will also be promoted in countries with little or no field production as we now know it.

Johannes: One of the biggest questions facing the future of agriculture is the financial stability of economies around the world. With the global economy we deal with in agricultural exports, unstable financial concerns can totally disrupt the movement of food and fiber around the world.

If the earning power of the working class people in developing countries (Asia) continues to improve, there will undoubtedly be increased demand by them to improve the quality and quantity of their diet.

Family farms

Merrill: While crop and livestock production today remains largely in the hands of independent farmers and ranchers, producers could face a fork in the path they are traveling: Corporate farms could dominate or rising input costs could encourage a move to organic farming and more locally grown food being available for purchase by Montanans.

Swenson: In 10 years, more crop production will be contracted because both producers and food companies wish to reduce their risk. Also, more nonfarming landowners will employ farm management firms and more acreage will likely be custom farmed.

The most limiting factor in small-scale or niche agriculture is gross revenue. It is difficult to generate the income necessary to provide for ever-escalating health care and other family living expenses. It can be done, but not by everyone. It requires dedication, expertise, flexibility and often some combination of frugalness in living costs and nonfarm income.

Anderson: While the average age of farmers and ranchers continues to creep up, it also seems more young people are actively pursuing careers in production agriculture and bringing with them an affinity for implementing changes that utilize the new technologies available.

Redlin: Neither the trend toward increasing farm consolidation nor the trend toward very small-scale, direct marketing show any indication of disappearing in the next 10 years.

However, both are driven by different forces. Agricultural consolidation, which brings increasing farm size and greater reliance on industrial processes, continues to be driven through expansion of the agri-technology sector and the ongoing need for economies of scale.

Organic commodity production, as well as farm direct sales through farmers markets, farm-based processing and specialty production of meats, fruits and vegetables, is driven by a strong and growing consumer movement, which variously draws on health, energy and biodiversity values for its strength.

Perhaps the biggest concern in the next 10 years, however, will be the tenuous situation of mid-sized agriculture and, consequently, of the social and economic viability of our small towns, particularly in low-population areas. These farms and communities are not ideally situated to be promoted by either trend, sadly.

The economics of transport to market, access to inputs and increasing costs place mid-sized farms at greater risk in the industrial trend as they don’t have either ideal economies of scale nor do they have financial return from farm price supports equivalent to that of their larger counterparts.

Small-scale and specialty production relies on adequate consumer market size for development and efficient transportation to keep food and product costs affordable. Many of our mid-sized farms are in remote areas that lack population density or infrastructure development for suitable access to those markets.

Stewardship

Englund: We are seeing society placing greater expectations on agriculture to address concerns about climate change, increasing energy costs, input costs, conservation, food safety, health and nutrition. We will need to increase productivity to meet future nutritional needs while decreasing impacts on the environment, including water, soil, habitat, air quality and climate emissions, and land use.

Merrill: With changes in climate, the crops of today will evolve, and we’ll see an increased emphasis on building healthy soils, the use of biochar and pulse crops that are plowed under to take advantage of naturally grown nitrogen.

Svedarsky: As a wildlife ecologist guided by sustainability considerations in the broad sense, when I consider the future of agriculture and related land use in 2022, I think long term. What will conditions be in 3022?

That’s what sustainability is all about: “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

Increasingly, the land resource has to be viewed more holistically as a multifunctional landscape providing not only food and fiber, but healthy watersheds providing clean water for drinking and recreation, wetlands, forests, brushlands and grasslands for wildlife habitat, biofuels, pollinators and carbon traps.

VanderWal: The agriculture industry will continue to take seriously our moral and ethical obligation to do our best to take care of the land and animals entrusted to us. Efforts to produce more with less will continue at a feverish pace in light of the need to roughly double crop yields by 2050 in order to feed the projected 9 billion people who will inhabit the earth by then. Land area available for growing crops and animals will continue to decrease, so increasing efficiency is the only way to meet this goal.