Farming is an increasingly automated industry. Its goal is to cut costs and increase efficiency, especially regarding mundane tasks, to grow more labor-intensive crops. Emerging technologies make planting, mowing, harvesting, and livestock production more efficient. Companies in this industry sell to farmers with large-scale operations and directly to consumers for their at-home gardens and land. The industry is in the sensitive SPDR Industrials (XLI) sector.
Today, the industry is one of the most vital in the world. As of March 2023, the average farmer feeds 165 people, up from only 20 people 60 years ago.1 Over 40% of land in the US is agricultural, producing 40% of all the world’s crops.
Recent innovations include seeders, drones, and tractors. Agricultural seeders accurately plant seeds of varying types over large land areas, boosting crop yields and quality. Drones are also efficient at land surveying, mapping, applying fertilizers and pesticides, and detailing crop health. Similarly, tractors are useful for various activities, such as plowing and cultivating.
Forestry’s automation boom includes automated felling heads and log loaders, which efficiently saw trees and safely process wood. Bulldozers make for easy demolition in construction, and excavators provide faster and more efficient earthmoving operations. The industry’s innovative developments also include drip irrigation, indoor vertical farming, precision agriculture, and scarecrows that shoot green lasers to deter birds from pillaging crops.2
Revenue in the industry can be seasonal, but technology helps the companies stay afloat during long periods of unfavorable weather or disease outbreaks. Agriculture comprises 11% of the US workforce.1 For those interested in expanding their portfolios to include innovative farming technologies, First State holds a significant position in farming automation stocks Deere & Co (DE) and Caterpillar (CAT). For a free consultation with experienced financial advisors, contact us at (918) 492-1361.
Sources
1The Barbecue Lab: Agriculture Statistics, March 2023
2Mass Challenge: Agriculture Innovation: 10 Tech Trends to Watch in 2023
This overview is for informational purposes only and is not a recommendation. It should not be the sole deciding factor in making an investment. Investing is a risk and, as with all risks, a positive return is not guaranteed. Past performance does not indicate future results.