In 1982, John Naisbitt wrote a book, Megatrends, Ten New Directions Rransforming Our Lives. Naisbitt also published another book in 2000 called Megatrends 2000.
These books and the accompanying videos were widely used in management training to help managers learn to think outside the box.
The OSU Extension Dairy Excel Team used them in our Managing For Success human resources management workshops for dairy managers.
Megatrends. Recently, Mike Brubaker, managing director of the Agricultural Issues Forum, published a list of 12 Megatrends in Agriculture.
These predictions are based on historic trends and the current state of affairs in agricultural technology, markets, the world economy and the environment.
They serve as a kind of road map into the future, a template which can help you see how your farming operation should change in years to come.
I will list Brubaker’s megatrends and provide an in-depth discussion of the implications of some of them.
Perhaps you can use these to guide decision-making or planning for the future of your operation.
Megatrend 1. Continued Consolidation at all levels of agriculture.
According to Brubaker, the trend toward reduced time to farm an acre will continue and will be accompanied by a continuing trend toward larger farms and fewer farmers.
Consolidation in banking, farm equipment, and crop science firms is expected to continue as well.
As an example, there were 13 crop chemical firms in 1990, covering 80 percent of the pesticide market. By 2002 there were only six.
Megatrend 2. Increasing governmental and regulatory influence.
Brubaker says increased demand for traceability from the farm to consumer will increase record keeping requirements for farmers.
He thinks these burdensome and costly record keeping requirements and country-of-origin labeling (COOL) could backfire in consumer confidence with the result being poorer international demand for U.S. food exports.
Brubaker also thinks pressure to reduce payment limits to farmers will continue.
He thinks this trend may result in artificial fragmentation of large operations, resulting in no measurable effect on farms (except possibly reduced global competitiveness), but resulting in increased fortunes for attorneys and accountants.
Megatrend 3. Rizing impact of globalization on local markets.
Brubaker says the WTO process will result in migration of fruit, vegetable (and possibly livestock) production to Latin America, China and Southeast Asia.
We should expect to see more competition in livestock production from South America, Eastern Europe, and the former U.S.S.R.
Additional pressure on livestock production will come from U.S. urbanization, environmental and social pressures.
These changes will result in changes in our transportation infrastructure, increased freight rates and changes in local basis patterns.
It will also result in more consistent export demand and shortages.
Megatrend 4. Continued development of niche markets.
As you have already seen, genetic engineering will result in crops with traits such as higher starch for ethanol plants, higher oil content for soybean processors, and other special traits such as medicinal properties.
At the same time, organic foods and non-GM crops for human food use will continue to grow as niche markets.
There will be increased opportunities for preprocessing of crops for use in refining and manufacturing of biofuels, biochemicals and bioproducts.
Megatrend 5. Continued technology advances.
Better technology and more foolproof seeds and chemicals will narrow the gap between poorest and best products available to farmers.
Perfection of GPS-guided steering will lead to around-the-clock field operations and continue to in crease the amount of acreage a single producer will be able to manage.
The result will be consortium farms and shuttle farming to apply expensive equipment and management skills over more acres and a longer planting and harvesting season.
Megatrend 6. Increasing capital/financial pressures.
Competition for deposits among banks will cause them to seek the safest, best-returning deposits.
So, banks will place more emphasis on good performance among their borrowers in return to assets, and return to equity (management ability).
Banks will compete for the best performers and be increasingly hesitant to place new loans with poorer mangers.
Another source of financial pressure will be the need to adopt the increasing benefits of precision farming technology.
Megatrend 7. Increasing focus on animal welfare.
The humane society and most responsible farm managers are concerned about animal welfare - sparing animals from physical pain and suffering.
The livestock industry promotes animal welfare for both economic and moral reasons.
But, when concern for animal welfare mutates into a demand for animal rights we have a huge problem.
We have already seen this happen in Europe and it is starting in the U.S., where some retailers are dictating more “humane” production practices that have no basis in animal performance.
Unless this trend can be reversed, the animal welfare issue could combine with environmental opposition to drive animal agriculture (and the jobs and grain markets that go with it) out of the U.S. altogether.
I think that would raise even more questions about food safety than having animal agriculture stay here.
Megatrend 8. Greater demand for environmental stewardship.
Taxpayers increasingly are demanding something in return for farm subsidies.
Expect tougher environmental standards for confined animal feeding operations (CAFOs).
Traceability will require that a product be traced back to its farm of origin, and also that records be kept on how it was produced, what chemicals were applied, what rates, etc.
A positive aspect of this trend could be carbon sequestration credits (payments based on the amount of carbon dioxide a crop absorbs as a way to fight global warming) for farms.
Another positive result of this trend will be an increased environmental awareness among environmentalists that biotechnology offers the best hope of saving rain forests, wetlands, and other natural habitat by making it easier to feed the increasing world population on existing farmland.
Megatrend 9. Job-creating rural development.
Agricultural gross domestic product (GDP) as a percent of total GDP is shrinking , even in rural counties. It fell from 17 percent to 4 percent between 1974 and 1999.
The need to create good-paying jobs for small and medium farmers is driving heavy emphasis on rural development.
Expect more emphasis on bringing about a biobased revolution because of proven benefits in human health, the environment, the rural economy, and increased energy independence.
Another major development will be offering broadband Internet access in rural America so farm families can participate in exploding growth in telecommunications jobs and home-based business opportunities.
Megatrend 10. Increasing emphasis on food safety.
Food safety has become a growth industry for trial lawyers who want to tap into the “deep pockets” of food retailers, after the woman spilled coffee that was “too hot” and won millions from McDonalds.
Since Sept. 11, the possibility of domestic terrorism in the food chain has added another risk factor. Traceability will be a way to limit an increasing number of recalls.
A positive benefit, on the other hand, will be less risk of pesticide residue and less incidence of natural molds and toxins in foods.
Megatrend 11. Increasing role of ag energy production.
The U.S. government has set a goal of replacing 30 percent of energy use with biofuels by 2030. This will create a new market for a billion tons of biomass (mostly low-value crop and processing wastes).
Section 9002 of Title IX of the 2002 Farm Bill requires all federal agencies to purchase biobased alternatives to petroleum based products as long as they are competitive in cost, availability and performance.
Megatrend 12. Increasing public scrutiny/pressure on ag policy.
Critics of U.S. ag policy are changing tactics.
Instead of charging that policy is merely ineffective at stemming the loss of family farmers, they are now siding with the WTO bloc of countries alleging that U.S. and EU farm subsidies are immoral because they discourage agriculture in third world countries and make them dependent on U.S. food aid.
The Environmental Working Group will probably continue to publish program payments by name to embarrass producers and generate a perception that farm programs are corporate welfare.
There have been other embarrassing incidents publicized by environmentalists and animal rights groups trying to portray farmers as polluters and animal abusers.
But, the facts are on your side. Today’s farms are more attentive to soil erosion and water pollution.
Today’s farm animals are better cared for in terms of health, shelter and nutrition than many of the world’s poorest people.
We need to continue to tell this positive story to everyone who will listen.
What it means. What do these trends tell you as a farmer? I think the message is that you can expect continued change in the way you do business.
The changes will come faster than ever before and they likely could be more dramatic and challenging than before.
You cannot expect to do things the way you did five years ago. Information and keeping current on new developments in your industry will be more important than ever.
The changes will create opportunities as well as making unprofitable some of the things you did before.
The future will belong to those who can take advantage of these opportunities and manage the risk of change.
(The author is an agricultural extension agent in Columbiana County. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)