By Alicia Barkley
Associate Product Manage
Agri-tech companies have long been users of robotics, but this technology now combined with artificial intelligence is even more vital for the future of the food industry.
Reimagining Farming From the Start
Farmers are always striving to find ways to operate and cultivate their lands seamlessly. From the invention of plows thousands of years ago to the reaper in 1831, to the center-pivot irrigation system in 1940, farmers have been using machines and forms of artificial intelligence (AI) to transform the way they farm with just a fraction of the labor.
These days, despite AI and robotics being the “talk of the town,” many may be unaware of how the food industry is using AI and robotics.
The VanEck Future of Food ETF (YUMY) focuses on investing in companies engaged in Agri-Food technology (agri-tech) and innovation. This encompasses industries and companies involved in new environmentally sustainable agriculture products and services.
YUMY invests in some of the key players in the industry, such as Bucher Industries AG1, which invented production pumps for tractor hydraulic systems in the 1920s and has since continued to create on-trend solutions for machines. Another example is Kubota Corp2, which produced the first horizontal, liquid-cooled kerosene engine for agricultural use in 1922. Their engines have evolved over time and the company has paved its way to carbon neutrality.
Technological Improvements in the Present
Current agricultural inventions, heavily influenced by AI and robotics, are necessary to feed the 8 billion people on the planet today more efficiently. Farmers are tasked with using modern-day technology to maximize yields – cue in drones!
Drones have emerged as innovative tools for precision farming. They allow farmers to assess and monitor their crops and livestock from far away and make decisions to improve their harvests and maintain efficiency. With their ability to capture high-resolution images of vast areas and supply attention to where it is needed, drones can detect diseases, pests, and manage irrigation resources. Trimble Inc.’s3 creation of the Trimble UX5 Aerial Imaging Solution (drone) over a decade ago has been integral in setting the standard of collecting data with photogrammetric accuracy regardless of weather conditions.
While drones have been integral to precision farming, other inventions fueled by AI and/or robotics have been setting the stage for the future:
- Deere & Co.4 created See & Spray™ Ultimate, an artificial intelligence machine that uses robotics, cameras, and extremely fast graphics to target and spray weeds. Jahmy Hindman, Chief Technology Officer of Deere & Co., said, “It’s the ability to create, in software and through electronic and mechanical devices, the human sense of sight, and then act on it.” The machine uses 36 cameras that are connected to tractors to distinguish a weed from a crop and determine whether to spray herbicide or not.
- Kuhn Group, a subsidiary of Bucher Industries AG, offers agricultural machinery that utilizes robotics. Their AUROCK seed drills have standard and optional features such as VISTAFLOW. This is a smart tramlining valve fitted to a distributor head of a tractor that monitors seeds that are passed through seeding tubes. The valve controls the rhythm and timing of the seed flow in each row.
- Lindsay Corp5 has been revolutionizing agricultural irrigation since 1955. They created the Zimmatic® pivot systems and most recently, the FieldNet®, which manages irrigation systems remotely, providing recommendations and control needed to maximize yields in any climate or terrain, anytime and from anywhere.
As we continue to use AI and robotics to improve the food industry, we need to prepare for the future. What will the future of food technology look like?
The Future of Food Technology
Farmers’ dependency on AI and robotics will increase monumentally as the number of mouths to feed on the planet is estimated to increase to 10 billion by 2050. Additionally, global warming and climatic disruptions will force unprepared farmers to exit the business.
Within the agri-tech industry, the future of food will focus on innovations, some of which are outlined below, and all of which are necessary to prepare for the future.
Examples of companies held in YUMY that focus on innovative trends for the future:
|Internet of Things (IoT)||Deere, Kubota, John Bean Technologies Corp (JBT) (1.73% of net assets as of 05/31/23)|
|Smart & Precision Farming||Corteva Inc. (CTVA) (5.37% of net assets as of 05/31/23)|
|Vertical Farming||AppHarvest Inc. (APPH) (0.55% of net assets as of 05/31/23)|
|Robotics & Automation/Drones||Deere, John Bean|
|Smart Water Management||Trimble Inc. (TRMB) (2.46% of net assets as of 05/31/2023)|
|Biotechnology||Benson Hill Inc. (BHIL) (0.51% of net assets as of 05/31/2023)|
All securities mentioned have been held within the VanEck Future of Food ETF (YUMY) since its inception. They have proven track records of focusing on innovation and using some form of AI and robotics to streamline agri-food technology.
Sources: Bellis, Mary. “American Farm Machinery and Technology Changes from 1776–1990.” ThoughtCo, Feb. 6, 2021.
Innovation News Network, “The evolution of agricultural technology,” July 8, 2020.
Originally published by VanEck on June 30, 2023.
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1 Bucher Industries AG (BUCN): 2.74% of net assets as of 05/31/23.
2 Kubota Corp (6326): 2.02% of net assets as of 05/31/23.
3 Trimble Inc. (TRMB): 2.46% of net assets as of 05/31/23.
4 Deere & Co. (DE): 5.27 % of net assets as of 05/31/23.
5 Lindsay Corp (LNN): 2.38% of net assets as of 05/31/23.
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