If we believe only the things that are easy to believe, the future is going to take us by surprise. At least, that’s the line I took when I moderated a panel of farm leaders last month, where our job was to imagine farming in 2020.
Here are just three predictions, with a word of explanation first. If you could go back to the year 2000 and predict how this past decade has turned out — if you talked about the prices of 2008 and the way the roller coaster keeps going, and if you predicted self-steer and smart phones — you would have thought you were dreaming.
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If 2010 was unbelievable 10 years ago, think how much more unbelievable 2020 will be. There won’t only be evolutionary changes by then, there will be unforeseen step changes too.
#1: Change will get faster. In 2001, 1.8 per cent of Canada’s farms grossed over $1 million and produced 35 per cent of total receipts. By 2006, they had doubled, producing 40 per cent of receipts, and the juggernaut keeps going. It doesn’t mean every farm must become a million-dollar farm or else — I don’t believe that at all. But it does mean more of these large farms will be trying to grow even faster, impacting the growth and marketing plans of more farmers in more localities. If you think there’s competition for land now, just wait.
#2: Despite rising farm incomes, nonfarm income will make up a much bigger share of farm net income in 2020 than it does today. In fact, the way you manage your off-farm income will make a huge difference to your ability to sustain and grow your farm. Those investments will grow in part because farmers will have good years when they have income to invest, but they will also grow because farm pricing will be incredibly volatile, and farmers will divert part of their income to smooth out the ride. As well, because of their increasing business and financial sophistication, farmers will get even better at identifying off-farm business opportunities, whether that’s putting up an apartment complex in town or building a processing plant.
#3: The farmer’s share of the consumer food dollar will quickly rise through the growth of value chains and contracting opportunities. I know there are doubters out there. Sometimes I’m one of them. But the research from other sectors is that the power points in any value chain are the beginning and the end. In the past, the farmers got squeezed. In future, it’s going to be the middleman.
There are lots of other predictions to make for 2020. How about the downsizing of farm equipment as agriculture moves to more robotics instead of brute force? Still, the predictions above are enough to suggest it’s going to be a heck of ride.
It’s a great time to be young. Drop me a line at [email protected], or call me at 519-674-1449. Are we getting it right?
