|
Change is a word the ag industry – and the world – are hearing a
lot lately. What trends will shape business in the next decade?
Lowell Catlett, Dean of New Mexico State University’s College of
Agriculture and Consumer Sciences – and often a consultant to
Fortune 500 companies and the U.S. government about futurist
issues – enjoys speculating on that answer.
He addressed the American National Cattlewomen (ANCW) at the the
Cattle Industry Convention in late January and offered up some
of his predictions. Catlett talked about the changing consumer
demographics and noted, “We are losing the World War II
generation where food was viewed as survivability.”
How will that impact food trends of the future?
Catlett notes that today Baby Boomers are the generation that
dominates. He explains that “boomers” grew up influenced by love
and acceptance, and thus he says, “They want different things
[than the previous World War II generation], and that’s
powerful.”
For the food marketplace Catlett said this means there are great
opportunities to be different to satisfy consumer demands – from
natural and organic to niche markets.
Additionally, Catlett said the biggest factor to recognize is
that “people afford what they want at every income level.” For
instance, among boomers he says surveys indicate that they won’t
give up dining out despite the current economic downturn.
How should the beef industry adapt to this changing
demographic?
His advice to beef producers is to remember that “The customer
is king – in the beef business and any other business.” With
that, he reiterates that people afford what they want. That
means consumers will pay extra above standard commodity prices
for beef that is segmented into targeted markets. Applying that
in marketing, he says if you listen to the consumers and see
opportunities, it can be powerful and there is money to be made.
As examples, he says the world is filled with many different
food opportunities… “The world likes beef. It likes organic beef
and it likes non-antibiotic beef. It likes beef from happy cows.
Whatever you can deliver, people want what they can afford. It’s
more than about calories. It’s about entertainment. Go produce
it.”
Lastly, he poses the question, do you want to sell beef or filet
mignon? To that point, Catlett concludes, “Don’t sell products
and services; sell people what they want.”
What other trends does Catlett see influencing consumers?
Catlett says he sees several trends on the horizon that could
greatly impact the way agriculture advances. Foremost is health.
Catlett believes that the future of ag commodities from corn and
soybeans to beef is going to be about health for both humans and
animals. He says this isn’t about adding genes, but better
understanding the genes that are already inherently there
through DNA mapping and the like.
Second, he anticipates that future generations will embrace the
green movement even more. He points out urban efforts to have
“gardens” on rooftops and says we’ll see more and more of this
to grow food, provide bird habitat and improve air quality.
Additionally he believes food identification and traceback is a
certainty, and of food ID of meat and grain, he says, “Smart
companies are already doing it.”
What does he see for energy and electricity issues?
Cattlet believes there will be a continuing future for biofuels.
While oil will remain, he says, corn and soybeans will still be
used for biofuel, and he adds, “We need diversified energy so we
don’t get the drastic spikes in energy costs.” But he also sees
more different feedstocks being used for biofuels in the future
as well.
Regarding electricity, Catlett anticipates that more alternative
sources will become commonplace. As examples, he predicts that
farmers will use onsite methane and wind generators to power
their own farms. Enough will be produced that it can also be
sold into the power grid, he says.
What are others seeing in the crystal ball for ag’s future?
While no one knows what the future holds for sure, there are
some pretty good educated guesses being offered up. Corn and
Soybean Digest magazine included a list of comments made at the
National Agricultural Bankers Conference on what to expect by
the year 2025. Predictions included:
David Kohl, professor emeritus at Virginia Tech, said:
By 2020, organic farming will hit 20%; whereas today it’s only
8%.
Roger Sturdevant, Bank of the West, Fresno, CA:
Lots of land in California will go fallow because there won’t be
enough water.
An increasing loss of the labor force.
Dairy farmers will become energy-neutral because they’ll provide
energy from manure.
Dennis Everson, First Dakota National Bank at Yankton, SD,
anticipates:
Lifestyle farmers will be gone because generation X and Y are
interested in living, not working. They won’t want to work on a
hobby farm at the end of their work day.
Lack of youth in ag will cause investors from Wall Street to
step in.
From Brian Little, RBC Royal Bank, Toronto, Canada:
Estate planning will be front and center.
Few bankers will have grown up on a farm.
Cash flow will be king.
Plan for more food safety and labeling.
Instead of farmers borrowing $10 million, they’ll be borrowing
$100 million.
|
