Impact of Tomorrow's Technology on Animal Agriculture
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This document discusses the impact of emerging technologies on the animal agriculture industry from a financier's perspective. It notes that population growth, income growth, and urbanization are increasing global demand for food by over 40% by 2030 and 70% by 2050. However, agricultural productivity growth is declining while arable land is limited. New technologies that can increase yields and production efficiency in a sustainable way will be necessary to meet rising demand. Factors like access to innovation, sufficient scale of adoption, dedicated supply chains, and technologies that improve profitability will influence which technologies are commercially viable. The implications for financiers include needing to identify commercially successful technologies, anticipating increased capital and working capital needs from adoption, and managing risks that emerge
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Impact of Tomorrow's Technology on Animal Agriculture
- 1. Financial Perspective: Impact of Tomorrow's Technology Trends and Developments on Animal Agriculture Deborah Perkins Rabobank International April 2013
- 2. Contents Section 1: Section 2: Section 3: Key Drivers Behind Technology Developments Factors Affecting Uptake of Technology Implications from a Financier’s Perspective 3
- 3. Demand for agricultural commodities is increasing Population Growth Income Growth Urbanization World population growing at 1.1%p.a. Concentrated on emerging economies Global income has been improving mostly in emerging markets Urbanization leading to westernization of diet and demand for higher value added foods 4 Food Demand Additional Demand Food production to grow over 40% by 2030 and over 70% by 2050 Bio-fuels increasing the demand for sugarcane, grains and oilseeds
- 4. Source: USDASource: USDA Source: USDA Source: USDA World corn yield % change, 5 yr moving avg World wheat yield % change, 5 yr moving avg World soybean yield % change, 5 yr moving avg World rice yield % change, 5 yr moving avg While productivity growth is in decline -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0% 1% 1% 2% 2% 3% 3% 4% 4% 5% 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
- 5. Land is availability is limited - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 4,200,000 4,300,000 4,400,000 4,500,000 4,600,000 4,700,000 4,800,000 4,900,000 5,000,000 1960 1970 1980 1990 2000 2007 Thousandhectares Agricultural land area Agricultural land area per capita World Agricultural Land per Capita
- 6. 7 Globalization and trade are both increasing
- 7. 8 Food safety has become increasingly important
- 8. Weather events have a significant impact
- 9. Sustainability is a key business driver
- 11. Access to innovation is necessary for adoption Public R&D spending by region
- 12. Sufficient scale is necessary to be able to access technology 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 <500 500-2,000 >2,000 Numberoffarms,'000 Farm size, Acres 1997 2002 2007
- 13. Dedicated supply chains are changing the way farmers access technology • Source: Rabobank, 2013
- 14. The value proposition is about adding value rather than chasing price • Source: Rabobank, 2013
- 15. 16 Changing consumer demands impact which technologies will be adopted Safety Environment & ethicsLocal vs Organics Time Value for money Quality Experience & emotion Health & Wellness
- 16. Technologies with a positive impact on profitability will be attractive to players all along the chain
- 17. 18 Implications
- 18. What does it mean? • Pick the winners • Capital expenditure • Increased working capital requirements • Risk management
- 19. Rabobank International… “The financial link in the global food chain”™
Editor's Notes
- We’ve moved from an era of surplus to an era of scarcity. This changes the way commodity traders and food manufacturers and retailers think about future supply and their corporate strategies to secure competitiveness and sustainability.
- Investments – taking tech to developing regionsJV to get access to tech in developed countriesMkt access – sometimes prevents use of technologies that accepted in US
- Same sexed semenFeeding strategiesMinimal till planting techniquesDrought resistant varietiesRegulationsImpact of weather events more severe with lack of stock cushion – climate change elevates importance of innovation in bioscience and crop protection
- SolarDigestorsWater management
- <5 of farms account for over 50% of value ag production
- Dedicated supply chains allow all F&A companies to increase control of supply to manage pressure and complexityThey depend on closer cooperation from one end of the chain to the other, longer-term supply agreements, and a focus on adding value
- GM feedHormones and anitbioticsRbst in milk/dairy