Agricultural consolidation essentially involves the merging of smaller farms and product expertise into larger ones, which – on its face – appears to present benefits such as economies of scale and efficiencies across both vertical and horizontal sector supply chains. However, these consolidation trends over the past few decades have actually presented myriad problems which, through private-public partnerships embracing technological innovation, can now be effectively addressed and remedied.
Now, despite consolidation generally lowering costs of capital and raising knowledge investment opportunities for larger farms benefiting from more resources, the better food supply chain data and analytics providers can actually help mid-tier farmers stay competitive. Data ‘democratizes’ what’s otherwise been reserved for larger Ag operations while meeting the USDA’s responses to an Executive Order to limit collusive practices and level the playing field. Price discovery and logistical transparency measures improvement across livestock and crop subsectors while blockage of retail mergers improves competition.
USDA also launched a $100M loan guarantee program making available nearly $1B in funds to back private investment in strengthening food supply chain infrastructure through more rural farming competition, partly by teaching growers how to use data to inform their marketing decisions.