In its biennial survey conducted between April and June, McKinsey collected input from 5,500 farmers in 10 countries. The backdrop: after a multiyear slump that squeezed budgets, the sector is flashing its strongest recovery signals in years as commodity prices firm up, trade flows shift and equipment orders pick up, lifting cautious optimism that the long downturn may be easing.
After years of pulling back on purchases, growers want tools that help plan and manage operations day to day. McKinsey says farmers, particularly in the Americas, are adopting AI quickly for routine decisions. By the firm's count, 17% of farmers globally are already using generative AI in their work, placing it among agriculture's fastest risers.
The report ties tight budgets to input costs that have stayed high and volatile since profitability last peaked in 2021-22, including labor, land, equipment, financing and fertilizer. "These forces - combined with local policy uncertainty, increasingly unpredictable weather and labor shortages - are making farm-level decisions harder and riskier," said David Fiocco, a senior partner at McKinsey. While AI gains traction, other tools remain niche on farms, with only limited uptake for robotics, electric-powered machinery, and sustainability software.
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Higher costs contributed to a 24 percentage point drop in spending intent for this year. In lean times, more than a third of growers point to fertilizer as the first line item to trim. One area bucking the pullback: biological crop inputs. As McKinsey puts it, "More than half of specialty crop farmers now use at least one biological."
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