The next 10 years will bring a wave of change to the U.S. grain handling industry as global food demand rises and the ability to produce crops along with it.
Advanced traceability expectations, the closing connectivity gap, increasing global demand for protein, and pressure to produce more with less environmental impact are the leading trends to impact US grain handlers in the coming decade, according to the Future of Food Production, a whitepaper published by the Association of Equipment Manufacturers (AEM). It detailed more than a dozen trends driving food production in North America, revealing both challenges and opportunities throughout the food supply chain.
Progressive segments of the grain industry are investing in energy-efficient equipment and power, accounting software packages and mobile apps to stay ahead of these trends, but there are still gaps in adaptation to new processes and technologies in grain facilities across the country.
To avoid falling behind in a changing landscape, consider implementing or upgrading three critical elements: process automation capabilities, digital contract options and sustainability programs.
Begin automating as much as possible
As the global population is expected to increase 2.2 billion people by 2050, farmers will be tasked with growing roughly 70% more food than current levels. Meeting this challenge will require the downstream supply chain to handle greater capacities of grain despite a dwindling labor pool. Automation will become a necessity to sustain grain facility operations at higher throughputs.
Paul Katovich, CEO of Highline Grain Growers, based in Waterville, Washington, said the Pacific Northwest region is beginning to transition into the next era of grain facility automation, but it will take time.
“I would describe the Pacific Northwest as further behind the rest of the U.S. and probably the world,” Katovich said. “We’re on an aged infrastructure system that reflects the demographics of our agricultural producers and the challenges that are facing that age group, which is now an average of 60 years or older.”
In some cases, the speed of the automation and equipment at HighLine’s updated wheat handling facilities outpaces the producers' capabilities, but Katovich said that’s no reason to hold back progress.
“It means we’re in a transition zone,” Katovich said. “This is a good place to start automating operations management processes that are done manually or functions where one person is responsible for data entry, while another interfaces with a grower or a truck driver. With labor getting harder to find and the escalating minimum wage, the future will depend on more scale automation, digital communication, and the centralization of data into a software accounting system.”
Make a paperless pledge to kickstart electronic contract conversion
Over the next decade, there is enormous opportunity for agriculture to take advantage of the closing connectivity gap.
"As reliable internet access becomes more available, the leveraging of cutting-edge technologies becomes more practical, leading to a transformative shift in agriculture practices that drive productivity while conserving resources,” The Future of Food Production paper stated.
Increased access to broadband over the last few years motivated HighLine to pledge to go paperless in 2021, transitioning to digital contracts wherever possible.
Its former paper process was initially put in place to satisfy state regulations, which required records be kept for auditing purposes. After farmers dropped off a load of grain, a sample was taken to determine quality, and it could take up to a day before uploading the load’s weight and quality information into the computer system.
HighLine’s new electronic record system is powered by the Bushel smartphone app and information is uploaded nearly instantly, satisfying state regulatory requirements.
Despite the improved speed of paperless record keeping, Katovich said not every grower-member was ready to adapt the new technology.
“Anytime we go through a change to eliminate the waste of paper, for example, when we implemented direct deposit because of the inherent problems with mailing a five- or six-figure check, it's a time of transition for our patrons,” Katovich said.
During this transition, Katovich suggested simultaneously supporting the old and new processes, as long as they both can be sustained, and then having a conversation with the producer about why the new process was adopted.
“We are not completely transitioned yet, and for our reluctant adopters who prefer to do the same process they’ve always done, it comes down to having a conversation with someone they have a good relationship with,” Katovich said. “Whether that person is a station agent, or me or our CFO, we approach them through those strong relationships.”
Get serious about sustainability
Consumers are seeking heightened visibility into the environmental impact of the foods they eat and the companies that produce and handle their food. Restaurant and retail giants like McDonalds, Walmart and Starbucks have responded with corporate sustainability pledges, which may require suppler evaluations based on sustainability factors, like carbon emissions.
The Future of Food Production paper predicted growers could someday provide deep insights into how a food item was produced, including the use of pesticides and other inputs, carbon emissions from the growing process, labor wages, etc.
As a vital link in the farm-to-fork supply chain, an increasing number of grain processing companies are creating sustainable agriculture programs to address supply chain GHG emissions.
If developing a sustainability program sounds like a far leap forward, start small. It’s common to begin by stating what the organization can change to improve the three pillars of sustainability: Environment, Social, Governance (ESG).
“That’s why you’re starting to see discussion around ESG on the program at NGFA Annual Convention and it’s become a significant discussion for our executive committee,” Mike Seyfert, president & CEO of the National Grain and Feed Association (NGFA), said. “These discussions are around the questions ‘How do we [track supply chain emissions]?’ ‘Can we do it?’ and ‘Who pays for it?’”
“I'm not saying we’ve got the solutions, but we promote discussion to help our membership understand that these are the issues we need to start critically thinking about how this would impact their operation.”
Grain industry investment in sustainability, mobile tech and traceability will be key to meeting the future demand for food and feed. Just as disrupters of the past led to the way grain businesses operate today, these advances will shape the grain industry of the of the future.
HighLine Grain Growers’ Katovich summed up his regard for progress by saying, “I describe the land as not ours, but our turn,” he said. “The recognition that everything we use today was designed and built by someone who preceded us, and that we’re just stewards of it for this window in time. I challenge us all to do everything we can to make the land and our facilities better for the next generation.”
