Growers will need to continue to improve yields as more countries move into a food deficit, according to David Jones, chairman of Plant Impact.
He said the best thing for returns in the agritech industry was high prices for growers. Looking ahead to 2025, Mr Jones expected support for corn and soybean prices as Chinese demand continued to rise.
He was ‘very bullish’ on China.
“China imports 80mt of soybean from overseas to feed the world’s largest pig herd,” he said.
“That takes 30 million hectares which is larger than the UK.”
And a growing middle class will continue to increase demand for pig meat in the country.
“If we look at their neighbour Taiwan, they eat 25 per cent more pig meat.”
He added more countries would be moving into a ‘food deficit’ as populations grew with big exporters such as the US and Brazil profiting.
China may also underpin corn returns as it moves away from subsidising its own industry. While high stocks would initially mitigate the impact of reduced production, it would then need to import.
Corn ethanol caused prices to spike in 2011, taking a large amount of US corn. But Mr Jones predicted this would be a ‘one off’ as increased yields would ‘dilute’ the percentage of corn used.
He predicted there would be further collaboration of farms which would be good for the agritech industry.
“Big enterprises have the capacity to hire experts. Big farms buy better,” he said.
“In the US farm demographics, 60 per cent of farmers are over 55.”
But he said there were not always people there to inherit these farms which would drive collaboration and younger people, who have grown up in the ‘digital age’ taking over farms would be more likely to utilise technology as they look to improve their yields.
He also predicted the combining of big companies would finish after the current round of mergers happened.
“I think the big four are going to have less of an appetite to snap up smaller companies. They will work more collaboratively,” he added.