Fertilizer International 522 Sept-Oct 2024
30 September 2024
What are farmers thinking?
“Farmers are responding to increasing weather and climate risks by innovating with new practices and novel products”
The International Fertilizer Association’s annual Global Markets Conference is an in-depth event for those tracking the market. This year’s two-day gathering in London in July lived up to its billing as a meeting of curious minds (Fertilizer International 521, p4).
For me, some of the most memorable insights came from David Fiocco of McKinsey & Company1 .
Ultimately, the fortunes of the upstream fertilizer industry are decided by our downstream customers – farmers – those faraway rural folk on the other side of the farm gate. We should therefore be thankful that McKinsey and a senior partner like David Fiocco make it their job to talk to growers globally – to find out exactly what farmers are thinking and what informs their buying decisions.
McKinsey does this through its annual global Farmers Insights Survey, now in its fifth year. The latest survey took place between January-March 2024 and questioned around 4,400 farmers across nine countries.
David handily summarised this year’s survey results for London conference delegates by communicating five key things McKinsey were hearing from farmers:
1. Increased input prices remain a top risk
Despite recent price declines, growers still believe that increases to input costs are the top risk to their profits – with extreme weather now a close second. Indeed, extreme weather and climate are the top risks for Latin American and European growers. Overall, farmers are increasingly concerned about the collective risks to their businesses from extreme weather events, commodity prices and worker shortages
2. Practices driving input efficiency are up
One highly encouraging survey finding is that practices such as variable rate fertilization and the use of biologicals, controlled-release fertilizers and stabilised fertilizers are on the rise, being driven by a desire to improve yields and reduce production costs. The top three reasons behind the adoption of these sustainable practices were highly commercial too: yield benefits, lower production costs and the generation of additional revenues.
3. More than one-third of farmers use biologicals
McKinsey found that the adoption rate for biologicals among growers globally is above one-third currently and rising. Some 90 percent of farmers expect to maintain or increase their spending on biological products such as biostimulants. What’s more, buying behaviour is largely independent of fertilizer price hikes, with almost two-thirds of growers saying will either maintain or increase their expenditure on biologicals, regardless of changes in crop protection and fertilizer prices.
4. Technology adoption rises
Nearly half of growers around the world are using technology in their operations, with adoption on the up. In this year’s survey, McKinsey has seen a roughly one-fifth increase in the percentage of growers adopting or willing to adopt technology. This is especially true where farm tech has an operational focus – such as variable rate fertilization.
5. Input distributors are soil health influencers
Farmers globally cited their input providers as key influencers when looking for recommendations on soil health, with these even being ranked as the top advisors in North America and Europe. Growers identify soil health as an increasingly important topic, McKinsey found, with input distributors consistently ranked as the key advisors on this topic.
One of the key takeaways for David Fiocco was the way in which farmers are responding to increasing weather and climate risks by innovating. McKinsey expects to see greater adoption of new practices and novel products in future, biologicals being one example, with a specific focus on improving soil health.
These findings chimes completely with my recent conversation with Ronald Clemens of ICL about the sustainability benefits of controlled-release fertilizers (see article on page 24).
One valuable piece of feedback from McKinsey’s informative survey is this: growers globally see their input providers as trusted advisors on soil health – a reputation this industry would be wise to build on.
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