Global Farmer Insights 2024

Farmers cite increased price of inputs, extreme weather events, and volatile commodity prices as the top three risks to profitability in the next two years. Having input prices and extreme weather events as the top two risks is consistent with our 2022 survey, but the gap between the two has closed considerably, given that farmers have experienced a greater number of extreme weather events (only seven percentage points now separate the two risks). Volatile commodity prices are a newly added risk not previously included in our survey.

Input prices remain the top concern, with 48 percent of farmers noting price increases as the main risk to profits, compared with 63 percent in 2022. Despite a general decrease in costs for fertilizer and the active ingredients for crop protection over the past year,¹Based on McKinsey analysis of data from the US Department of Agriculture and the Chicago Mercantile Exchange. farmers report an average perceived increase in overall costs of 13 percent in the same time frame. They continue to worry about the price of inputs such as fertilizer, which has the highest perceived inflation in the past 12 months: 24 percent of growers reported that prices have risen more than 20 percent in the past year. Perceived increases in labor (14 percent) and crop protection (13 percent) costs follow.

Extreme weather events are the second top concern overall and have increased in relevance by six percentage points since 2022. In Europe and Latin America, they have become the top concern. This change in sentiment may reflect the impact of events such as El Niño in 2023, which resulted in widespread droughts, flooding, and temperature fluctuations around the world. Growers who think that extreme weather is a top risk said they spend about 30 percent more on agricultural purchases than their counterparts and were about 50 percent more likely to say they are planning to buy or lease more land over the next two years. This may reflect additional spending on related products, such as crop insurance, as well as farmers preparing for geographic shifts in land suitable for production.

Volatile commodity prices are the third major risk to profits that farmers cited. Thirty percent of farmers, mainly in North America, viewed it as one of the top risks. Farmers who said they think commodity price volatility is a top risk are three times more likely to use hedges and are more likely (72 percent versus 47 percent) to use crop insurance as they strive to protect themselves from this risk.

Despite the risks they face globally, farmers also see opportunity to capture profit in the coming years. When surveyed, farmers said the top three opportunities to increase their profits in the next two years were improved yields, higher crop prices, and lower prices for inputs. To capture these opportunities, farmers anticipate taking three main actions: trying new yield-increase products, trying new crop-protection products, and purchasing innovative equipment, products, or technology. Most farmers around the world said trying new yield-increase products was their top priority to increase profits, but the proportion of farmers planning to take this action differed around the world. For example, farmers in North America were nearly twice as likely as farmers in Europe to try new yield-increase products.

Farmers in India and Latin America have a more positive outlook regarding future profits compared with farmers in Europe and North America. In North America and Europe, most farmers expected profits this year to be lower (64 percent and 55 percent, respectively); less than 15 percent expect an increase in profit in the next two years.

In North America, the proportion of farmers expecting lower profits over the next two years has risen by 16 percentage points compared with 2022, while in Europe, this figure has increased by six percentage points. In contrast, optimism prevails in Latin America and India, where more than half of the farmers (58 percent and 76 percent, respectively) expect higher profits in the next two years, up from 42 percent and 37 percent in 2022.

Supply and demand dynamics may be shaping farmers’ outlook on future profits. In the United States, prices of corn and soybeans have been declining due to a large global harvest, a drop in export sales, and substantial amounts of crop in storage.²Sergio Alvarado et al., “Americas corn and soybean prices hit multi-year lows amid favorable crop prospects,” S&P Global, August 20, 2024; Heather Schlitz, “USDA increases US corn production estimate, cuts stocks,” Reuters, July 12, 2024. In Europe, the price of wheat has decreased by about 40 percent since 2022, with farmers expressing concern about increased imports from Ukraine.³“Cereal statistics,” European Commission, accessed October 1, 2024; Luiza Ilie, “EU to step up checks to ease farmers’ fears about Ukrainian grain flows – commissioner,” Reuters, March 1, 2024. This pressure on prices, along with recent increased production costs, may be contributing to farmers’ negative expectation of future profits.

In India, rice is the dominant commodity. Farmers there have seen a record increase in prices despite government restrictions on rice exports, which were aimed at easing domestic prices and which dramatically increased global prices.⁴IFPRI Blog, “After a year, India’s rice export restrictions continue to fuel high prices,” blog entry by Joseph Glauber and Abdullah Mamun, July 29, 2024. This likely contributes to the overall positive outlook on future profits among Indian farmers. 

In 2023, Brazilian farmers endured crop failures, a drop in commodity prices, and intensification of droughts and floods. But when surveyed at the beginning of 2024, farmers said they anticipated better results in the coming two years, probably influenced by the growing importance of corn exports to China.⁵IFPRI Blog, “After a year, India’s rice export restrictions continue to fuel high prices,” blog entry by Joseph Glauber and Abdullah Mamun, July 29, 2024. However, events that occurred after the survey was in the field—mainly wildfires in the leading sugarcane- and soybean-producing regions—may have altered Brazilian farmers’ perspectives about profitability in the near future.

When it comes to which sustainability practices farmers are implementing, the leading practices are crop rotations (68 percent), reduced or no tillage (56 percent), and variable rate spraying or fertilization (40 percent). Generally, India and Mexico lag behind adoption of sustainable practices compared with Argentina, Brazil, Europe, and North America.

There is low willingness to adopt individual sustainable practices in the next two years among farmers who are currently not using that specific practice (less than 10 percent of farmers for most practices). The exceptions are Argentina, where 12 percent of farmers expressed willingness to adopt variable rate spraying or fertilization and to use biologicals; in India, 14 percent of farmers expressed willingness to practice crop rotation.

Adoption of biocontrols and bionutrients as sustainability-oriented soil health practices has been growing globally.⁶Biocontrols include microorganisms and biochemicals typically used to control plant stressors such as weeds and insects. Biofertilizers and biostimulants, usually referred to as bionutrients, are natural substances that enhance soil quality. Some 31 percent of farmers are using bionutrients, while 20 percent are using biocontrols. The main reasons farmers said they adopt bionutrients is for improving yield, soil quality, and soil health. Farmers adopt biocontrols primarily as a means of achieving a lower overall pest management cost per acre and better efficacy compared with only applying the traditional crop protection protocols.

Farmers in Brazil are leaders in the use of both bionutrients and biocontrols. Farmers’ high use of bionutrients (64 percent) is grounded in the historical adoption of inoculants, which has been supported by the government. For example, the Brazilian Agriculture Research Corporation (Embrapa) developed inoculants and new co-inoculation techniques and ran educational programs to raise soy farmers’ awareness about their effectiveness. In recent years, government support (for example, Programa Nacional de Bioinsumos and Plano ABC) and high prices of fertilizers have accelerated the adoption of other bionutrients. For biocontrols, difficulty in controlling specific nematodes and diseases with traditional chemicals drives the 61 percent adoption among Brazilian farmers.

About 90 percent of farmers using biologicals said they expect to maintain or increase spending on bio-based products. Some 63 percent will maintain or increase spending on biologicals regardless of changes in crop protection and fertilizer prices, suggesting a resilient market. Farmers are not adopting biologicals as a substitute to traditional protocols: interviews with farmers found that they use biologicals to supplement existing fertilizer and crop protection protocols rather than replace them because the combined protocols improve yield.

Across all regions, the percentage of farmers who said they are currently participating in carbon programs is low—just 12 percent compared to 54 percent who have heard of carbon programs but are not participating. Low adoption of carbon programs is likely due to lack of clear incentives and awareness. Even in the United States, which recorded a fast increase in carbon program adoption (a seven-percentage-point rise from 2022 to 2024), ROI is still perceived as not high enough by about 60 percent of farmers.⁷“Voice of the US farmer 2023–24: Farmers seek path to scale sustainably,” McKinsey, April 9, 2024. On average, these farmers expect economic incentives of about $35 an acre to participate.

In some countries, farmers’ lack of knowledge about carbon programs is an additional important barrier to adoption. For example, in India and Mexico, about 90 percent and 60 percent of farmers, respectively, have never heard about these programs.

Farmers continue to adopt technology, albeit at a slow pace. The survey found a three-percentage-point increase since 2022 in the number of farmers using or willing to adopt at least one new digital technology to improve operations. North American farmers lead adoption of technology, while Latin America experienced the fastest growth (a ten-percentage-point increase from 2022 to 2024).

Farmers globally are more inclined to adopt new technologies that directly improve operations. The United States has the highest adoption of operations-focused technology, with 61 percent adoption of digital agronomy, 51 percent adoption of precision agriculture hardware, and 38 percent adoption of remote-sensing technologies. Digital agronomy and precision agriculture hardware are the top two leading technologies around the world.

In the United States, agriculture technology (agtech) adoption is correlated with farm size; large farms (more than 2,500 acres) are 45 percent more likely to adopt agtech than are small farms (less than 100 acres). This is likely due to the scale needed for a positive ROI in agtech.

Use cases of these technologies vary by region. For digital agronomy, yield monitoring and optimization is the most widely applied use case. In North America and Latin America, yield monitoring is the top digital agronomy technology, with 60 percent and 49 percent of farmers, respectively, saying they use it. On the other hand, yield monitoring in Europe is much more limited, with 27 percent of farmers using it. Disease management is the most common use case, with 28 percent adoption.

Adoption of digital agronomy use cases is higher among row farmers than it is among specialty growers. Some 56 percent of row growers use digital agronomy for yield monitoring, compared with 40 percent of specialty farmers. However, an exception is the use of digital agronomy for irrigation applications, where specialty farmers have higher adoption rates.

Major pain points for the adoption of agtech globally are unclear ROI and high implementation and maintenance costs. In North America, 53 percent of farmers said they are very concerned about having a clearly demonstrated ROI before investing in agtech, compared with 26 percent and 25 percent of farmers in Europe and Latin America, respectively.

In a similar vein, a third of farmers in Europe said they cannot justify investing in agtech because their farms lack the scale to make full use of it. In our survey sample, European farms are about 450 acres, as compared with about 3,500 acres in the United States and about 3,700 acres in Brazil.

Farmers globally view input distributors as the main influence when purchasing agriculture products; farmers say that distributors shape their decision making on managing soil health. Integrated distributors are the top advisers to farmers in Europe and North America.

Family and neighbors are another key influence on farmers’ decisions—a top three reason globally. In India in particular, most farmers (75 percent) said they are likely to take advice from family and neighbors on matters regarding soil health, while 24 to 35 percent of farmers elsewhere said they would do the same. In Latin America, agronomists employed by farmers are the top influence, especially in Brazil, where use of an agronomist is ingrained in the traditional ways of farming. On the other hand, in India, farmers have smaller farms and typically rely on local government resources.

The majority of growers continue to prefer in-person interactions and use digital as a complementary channel for specific steps of the purchasing journey. However, despite many years of investment in digital technology from incumbents and start-ups, farmers have not significantly shifted toward e-commerce purchases. The preference for in-person purchases is especially prominent for closing first-time transactions.

Growers in Latin America say they are more open to digital interactions for repurchases and for support than in other regions. Behind high digital adoption rates is the avid use of instant messaging platforms (such as WhatsApp), which enable person-to-person interactions. These methods underpin digital repurchase and service; meanwhile, use of self-service platforms tends to stay relatively consistent throughout the purchasing journey. In India, a very low percentage of farmers (less than 10 percent) prefer digital interactions throughout their purchasing journey.