Monthly Spotlight

Key customer insights for the next 18 months

As the new year begins, it's crucial to examine the trends that are likely to influence the agricultural landscape. This article explores opportunities and threats ag producers anticipate over the next 18 months. These findings are from AgWest’s AgTrends Survey, completed by 460 AgWest customers this fall.

Producers expect to face several significant challenges over this period. The top five threats identified by AgWest producers include rising input costs, drought, agricultural commodity downturns, declining consumer demand and severe weather events.

Top 10 expected threats to agricultural operations over the next 18 month

Source: AgWest AgTrends Survey.

To address these issues, many producers plan to enhance operational efficiency, reduce costs by pre-purchasing inputs and lowering debts, and diversify their operations. Notably, 68% plan to invest in new technology and 59% are considering implementing price risk management strategies such as hedging and crop insurance.

Top 10 actions to implement over the next 18 months

Source: AgWest AgTrends Survey.

The agricultural sector is poised to adapt and innovate in response to evolving market dynamics with several growth opportunities ahead for producers. Nearly half of respondents are likely to enter new markets, focusing on niche markets, exports, and direct-to-consumer channels. Consumer trends like local sourcing, trendy foods and beverages, and organic products are viewed as potential growth avenues.

In the long term, over two-thirds plan to expand their operations within the next five years. Nearly half of producers expect modest growth in their business. In the next decade, 50% of producers aim to transition their businesses to the next generation.

Projected business growth over the next 5 years

Source: AgWest AgTrends Survey.

The next 18 months will undoubtedly be a period of significant change for the agricultural industry. By staying informed and proactive, producers can navigate these challenges and take advantage of opportunities that lie ahead.

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