A recent report from Boston Consulting Group (BCG) sheds light on the cautious approach many U.S. farmers are taking toward adopting new agricultural technologies. The study, which surveyed owners and managers of farms larger than 250 acres primarily producing corn, soy, wheat, or cotton, reveals that growers are increasingly inclined to repurchase existing technologies, such as auto-steer systems, rather than invest in newer innovations. This trend is largely driven by the financial pressures of low agricultural commodity prices and high interest rates, which have made farmers wary of taking risks on untested solutions.
The findings point to a significant challenge for agribusinesses looking to introduce new technologies to the market. The report emphasizes that understanding the unique needs and preferences of farmers is crucial to successfully promoting new agricultural products. BCG’s research highlights that traditional segmentation methods—such as categorizing farms by size, location, or crop type—are insufficient. Instead, the report suggests that age and the likelihood of a farm being passed down to the next generation are more revealing indicators of a farmer’s willingness to adopt new technology.
In the survey, auto-steer systems emerged as the most favored technology for repurchase in 2024, closely followed by farm management systems and slow-release inputs. Conversely, newer technologies like precision irrigation systems, autonomous farming equipment, and in-field sensors received lower repurchase rates. This discrepancy may be largely attributed to the relative novelty of these technologies in comparison to established tools like tractors, which farmers have long relied on.
For agribusinesses aiming to penetrate the market with innovative solutions, understanding the specific needs behind farmers’ purchasing decisions is paramount. The BCG report identifies key functional and emotional drivers influencing technology adoption. Functional needs included increased revenue, reliability, and low operating costs, while emotional needs encompassed saving time on labor-intensive tasks, caring for the soil, and maintaining a sense of control over farming operations. Interestingly, environmental considerations and financial incentives, such as tax breaks, ranked lower in importance among the surveyed farmers.
The implications of these findings are significant for agritech companies seeking to engage with farmers. As one agtech startup pointed out, farmers often lack the time and resources to experiment with unproven technologies that may take years to deliver results. This sentiment underscores the importance of building trust and demonstrating the reliability of new solutions before expecting widespread adoption.
BCG’s report segments farmers into seven distinct categories based on various factors, including their attitudes toward sustainable practices and their generational plans for the farm. This nuanced understanding of farmer demographics enables agribusinesses to tailor their marketing strategies and product offerings more effectively, fostering stronger connections with their target audience.
As the agricultural landscape evolves, the challenge for agritech firms will be to bridge the gap between innovation and the established practices that farmers are comfortable with. By aligning new technologies with the functional and emotional needs of growers, companies can enhance their chances of success in a market that is, at least for now, more inclined to stick with the tried and true.