McKinsey: Latin America Sees Fastest Growth in AgTech Adoption from 2022 to 2024

McKinsey & Company has released its 2024 Global Farmers Survey, shedding light on how farmers worldwide are responding to increasing challenges such as input price hikes, extreme weather, and market volatility. Conducted in the first quarter of 2024, the survey gathered insights from 4,400 farmers across Europe, India, Latin America, and North America. The report highlights key trends in agricultural productivity, technology adoption, and sustainable practices.

Farmers remain focused on enhancing productivity, with a growing emphasis on sustainability and agtech. However, regional differences in profit expectations were stark. While 64% of North American farmers and 55% of European farmers expect lower profits in 2024, optimism is higher in Latin America and India, where 58% and 76% of farmers, respectively, predict improved profits in the next two years.

Sustainability practices are becoming increasingly important as farmers face rising weather-related risks. In regions like India, North America, and Latin America, sustainable farming is being used to improve yields, while in Europe, farmers are seeking new revenue streams through these practices.

The adoption of agtech, while growing, is slow and varies significantly by farm size. Larger farms are more likely to invest in technology due to the scale needed for a return on investment (ROI). Input costs remain a major concern, with 48% of respondents citing them as a risk to profitability, even as fertilizer prices have eased in the past year.

AgTech Adoption: Spotlight on Latin America

Operations-focused technology continues to see steady adoption globally, with Latin America experiencing significant growth. While North American farmers lead overall technology adoption, Latin America has shown the fastest expansion, with a ten-percentage-point increase from 2022 to 2024. Farmers in the region are increasingly turning to digital tools to improve operations, with yield monitoring emerging as a key use case. Nearly half of Latin American farmers (49%) are now using digital agronomy for yield monitoring, compared to 60% in North America.

Brazil, with its large farm sizes, is a notable leader in the region’s tech adoption. Larger farms are more likely to adopt agtech, driven by the scale required to achieve a positive ROI. While countries with bigger farm sizes, like the United States and Brazil, are at the forefront, Latin American farmers face fewer concerns about demonstrating ROI compared to their North American counterparts, indicating a strong potential for continued growth in agtech adoption.

Despite challenges such as high implementation and maintenance costs, Latin America remains well-positioned to capitalize on the operational benefits that agtech offers, especially with the region’s steady technological advances.

Read McKinsey’s report here.