Technology Banking
Growth | 2 minute read

Ag robotics approaches adoption tipping point

What comes first, the robot or the grower willing to test it?

Today’s growers are caught between a rock and a hard place — rising labor costs, uncertainty about finding sufficient workers to plant and harvest crops, and increasingly tight profit margins. They’re not strangers to technology — but they’re overwhelmed by the variety and cost of products being introduced.

An Alpha Brown survey cited in Ag Funder News indicated that 27% of more than 3,000 growers are currently considering purchasing a machine to help with harvesting.1 Wintergreen Research predicts the market for agricultural robots will grow to $27.1 billion by 2023.2

According to Kenneth Scott Zuckerberg, Sector Manager for AgriFood Technology and Packaged Food at Wells Fargo Food & Agribusiness Industry Advisors, “farm labor is a major pain point in California, both from the standpoint of availability and affordability. Robotic technologies already exist where machines can sense and selectively spray herbicide to kill weeds, allowing farm workers to instead focus on other more productive task.” In the near future, growers who use robotics to automate everything from planting and weeding to harvesting and packaging will have a competitive advantage over those who still rely on manual labor.

27% of more than 3000 growers are considering purchasing a machine to help with harvesting.

Yet many growers are waiting for technologies to mature and become more affordable before they make major investments.

Robotics startups face challenges, too

Unlike manufacturing applications, agricultural robotics need to operate in varying soils, at varying elevations, in varying light conditions and on varying crops. Robotics developers have to do extensive testing in order to build a viable product. The challenge for many startups is finding growers willing to test the technology — and the testing may require several growing seasons.

In addition, robotics developers must attract investors until they can demonstrate a solution that can scale from 100 acres to hundreds of thousands of acres.

Working to bridge the divide

"We have an interest in accelerating market penetration of agricultural robotics and automation,” says Matt Servatius, managing director and head of Wells Fargo’s Cleantech Banking.

"Our customers rely on technology to grow their operations and profitability so we’re interested in doing what we can to speed those products to market. We’re also deeply committed to clean, sustainable technologies that will help feed the world’s rapidly growing population."

As the largest agricultural lender in the nation, Wells Fargo’s AgTech team can provide deep insights into the challenges facing every member of the supply chain from growers and suppliers to equipment manufacturers, food processers, retailers and consumers.

Wells Fargo is committed to building and sustaining an AgTech ecosystem where startups, investors and end-users can connect, collaborate and grow.

Disclosures
  1. Alpha Brown Source: https://agfundernews.com/harvesting-robotics-market-early-adopters-report.html
  2. Wintergreen Research source: https://www.prnewswire.com/news-releases/agricultural-robots-market-report-2017---expected-to-reach-271-billion-by-2023---research-and-markets-300454126.html
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The opinions expressed in this document are general in nature and not intended to provide specific advice or recommendations for any individual or association. Contact your banker, attorney, accountant or tax advisor with regard to your individual situation. The opinions of the author do not necessarily reflect those of Wells Fargo Capital Finance or any other Wells Fargo entity.

The information in this report is for educational purposes only and should not be used or construed as financial advice or a recommendation to participate any strategy mentioned herein. Wells Fargo does not guarantee that the information supplied is complete, undertake to advise you of any change in its opinion, or make any guarantees of future results obtained from its use. The concepts discussed in the paper require the assistance of qualified legal counsel and tax advisors, and investors should consult their own attorneys and tax advisors with respect to their own situations.

  1. Silicon Valley Top 150 2017 Silicon Valley Top 150 Public Technology Companies Rankings by Annual Revenue

Disclosures

Securities Products:

Not Insured by FDIC or any Federal Government Agency

May Lose Value

Not a Deposit of or Guaranteed by a Bank or Any Bank Affiliate

© 2019 Wells Fargo Bank, N.A. All rights reserved. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Deposits held in non-U.S. branches are not FDIC insured.

Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, and Wells Fargo Bank, N.A. Wells Fargo Securities, LLC and Wells Fargo Prime Services, LLC are distinct entities from affiliated banks and thrifts.

© 2019 Wells Fargo Asset Management (WFAM) is a trade name used by the asset management businesses of Wells Fargo & Company. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Managed Account Services and Wells Fargo Funds. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the funds. The funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA, an affiliate of Wells Fargo & Company. Neither Wells Fargo Funds Distributor nor Wells Fargo Funds Management holds fund shareholder accounts or assets. This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

© 2019 Wells Fargo Capital Finance. All rights reserved. Products and services require credit approval. Wells Fargo Capital Finance is the trade name for certain asset-based lending services, senior secured lending services, accounts receivable and purchase order finance services, and channel finance services of Wells Fargo & Company and its subsidiaries.

Wells Fargo & Company conducts business outside the U.S. through various companies, including duly authorized and regulated subsidiaries and affiliates in Asia, Canada, and Latin America. In Europe, banking services are provided through Wells Fargo Bank International (WFBI), directly regulated by the Central Bank of Ireland, and Wells Fargo Bank, N.A. London Branch, authorized by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. All products and services may not be available in all countries. Each situation needs to be evaluated individually and is subject to local regulatory requirements.

We provide links to external websites for convenience. Wells Fargo does not endorse and is not responsible for their content, links, privacy or securities policies.

Important notice regarding use of cookies: By continuing to use this site, you agree to our use of cookies as described in our Digital Privacy and Cookies Policy.

The opinions expressed in this document are general in nature and not intended to provide specific advice or recommendations for any individual or association. Contact your banker, attorney, accountant or tax advisor with regard to your individual situation. The opinions of the author do not necessarily reflect those of Wells Fargo Capital Finance or any other Wells Fargo entity.

The information in this report is for educational purposes only and should not be used or construed as financial advice or a recommendation to participate any strategy mentioned herein. Wells Fargo does not guarantee that the information supplied is complete, undertake to advise you of any change in its opinion, or make any guarantees of future results obtained from its use. The concepts discussed in the paper require the assistance of qualified legal counsel and tax advisors, and investors should consult their own attorneys and tax advisors with respect to their own situations.

  1. 2017 Silicon Valley Top 150 Public Technology Companies Rankings by Annual Revenue.