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Trading Lessons

The Glory Days for U.S. Farms are Far From Over

Companies / Agricultural Commodities Jun 25, 2012 - 11:14 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleMichael A. Robinson writes: Many Americans view farming as one of the last bastions of low tech.

It's not hard to see why. These days you can use your tablet computer for a video chat session while your car parks itself.

How on earth could crops ever compete with that?


Well, as it turns out, there's some pretty cool stuff going on out at the farm, too.

Today's tech-centric farms use remote sensors that "talk" to satellites. They have robots milking the dairy cows. They even rely on unmanned planes that can fly over their fields to help create 3D maps and improve crop output.

Welcome to the future of U.S. farming...

There's a lot going on in the field of precision farming.

All this activity makes me optimistic that high-tech can solve one of the most pressing concerns of our time: feeding the world.

Then again, we are living in the Era of Radical Change. An endless stream of high-tech breakthroughs will greatly improve life for millions of people over the next few years.

I put farming at the top of the list for a very good reason - it clearly defies the "food crisis" doomsayers out there who predict the world will soon outgrow its resources.

They claim that, with population slated to grow from the current six billion to 10 billion by the end of this century, we'll simply run out of food.

I've been hearing these predictions since I was in high school. (And that was a long time ago.) But in actual fact, high-tech has helped farmers greatly increase output for livestock and crops over the last few decades.

The industry is poised to adopt a wide range of cutting-edge high tech that will prove a further boon to farming.

Fact is, this spending occurs at what is already a great time for the sector. U.S. ag exports are booming.

For the fiscal year 2012 that ends this month, exports will total $134.5 billion. You can pretty much bank on that estimate - it comes from the USDA. Consider that in fiscal 2007, U.S. farm exports stood at only $82.2 billion. That means we've seen five-year export growth of 63%.

There's a lot of money to be made in high-tech ag.

Now wonder these hungry startups want in on the action...

1) Precision Pest Control

First, let's look at two startup firms in Indiana.

Allegro Dynamics and Spensa Technologies have teamed up to provide an advanced insect-tracking system.

They designed the secure website Mytraps.com to help farmers make better, more streamlined pest-management decisions. Users enter data from a computer (or they can use their smart phones to connect wirelessly). Using this online platform, a grower can collect data about how insects are affecting every single crop across multiple fields.

This program shows the power of visual planning. It includes aerial field images from satellite photos. These get placed over insect data from exact field locations. In this way, growers can track how pest populations are growing or shrinking over time, to see how well a pesticide is working to eradicate them.

2) Web-Based Data Analysis

Meanwhile, small-cap leader Raven Industries Inc. (NASDAQ:RAVN) is well steeped in high-tech farm products, too.

As I see it, Raven is one of the reasons why the U.S. ag industry will continue to do well even if the economy tanks again. This company is a leader in providing secure web-based data farmers need to improve yields.

Its ag division brings in $143 million in yearly sales, thanks to some innovative products.

Take Raven's Slingshot Field Hub. It helps make farmers far more tech savvy by connecting every acre of their land to a virtual tech toolbox. The system allows farmers to view and control their data for machines, workers, and projects. It is designed to work on any mobile device and any mobile carrier.

Then there are Raven's field computers. They deliver a dizzying array of uses. These include auto steering for equipment, GPS-guided planter controls, mapping, yield monitoring, and wireless communications.

Raven also offers the Sidekick. This is a direct chemical-injection device that provides more precise control for applying insecticides and liquid fertilizer. There's no need to pre-mix chemicals in a tank. This product makes using farm chemicals more precise, safer - and cheaper, too.

3) Robotic Milking Systems

We're still in the early stages of this next field. But I believe we will soon hit the tipping point for mass adoption at U.S. dairy farms.

Robotic milkers have already become common overseas. Ag products firm Lely pioneered the technology and says it has sold more than 12,500 such machines in the past 20 years. (Even now, they're milking hundreds of thousands of cows around the world). Based in the Netherlands, this privately held firm hopes to increase sales in the United States in the next few years.

Industry experts say only a handful of our farms had adopted the robotic-milking technology just three years ago. But with the economy's rebound, more farms are using them (though solid sales data doesn't exist).

In 2011, Lely showed off its robotic milkers at a dairy expo in Madison, Wisc. It was the first public viewing of the firm's Astronaut A4 milking system. According to the company, this machine gives more freedom to the cow (and eliminates stress for the animal) and more control to the farmer, with more milk as a result.

Clearly, the glory days for U.S. farms are far from over.

With all this cutting-edge high tech, our farms will remain success stories for decades to come. And that's why I predict they will produce more than enough food to feed the future.

P.S. If you want to find a way to profit from the next generation of tech breakthroughs, Michael's Era of Radical Change newsletter is a great place to start.

And you can't beat the price. You can get it free by clicking here.

Source :http://moneymorning.com/2012/06/25/glory-days-for-u-s-farms-are-far-from-over/

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