Elysabeth Alfano is the CEO of VegTech™ Invest, an Advisor to a food innovation ETF. She is a consultant to multi-national companies focused on sustainability and an Advisor to C-Suite interested in understanding the growth and whitespaces in the food industry. She is also the host of the podcasts The Plantbased Business Hour and Upside & Impact: Investing for Change.
In a recent episode of the Upside & Impact: Investing for Change podcast, former Deputy Under Secretary for the USDA, Sanah Baig, provided an in-depth look at the current state of American farming and the economic realities shaping its future. As impact investors, we at VegTech Invest see both challenges and opportunities in this evolving agricultural landscape, particularly as it relates to sustainability, food security, and the role of innovation in shaping the sector’s future.
For decades, the image of the American farmer has remained a nostalgic fixture in the national consciousness—small, family-owned operations, passing down generational wisdom, and serving as the backbone of the US economy. However, the reality of modern farming tells a different story—one of increasing consolidation, economic pressure, and a shifting power dynamic.
The American farmer today: A system under pressure
The USDA’s 2022 Census of Agriculture reveals several critical trends that redefine our understanding of American farming.
- Declining Farmland: The U.S. lost 20 million acres of farmland between 2017 and 2022, equivalent to the size of Maine. This land is often converted to commercial real estate, permanently removing it from agricultural use.
- Aging Workforce: The average age of farmers has risen to 58.1 years, with over one-third of farmers now aged 65 or older.
- Gender Shift: Women now account for 36% of all farmers, and nearly 58% of farms have at least one female decision-maker.
- Financial Pressures: 84% of farm families rely on off-farm income, and over 50% of farmers operate at a loss when relying solely on farm income.
These statistics highlight a significant issue: the traditional family farm model is under immense pressure, while corporate and large-scale operations continue to expand. The top 8-10% of farms now generate 90% of all farm income, leaving smaller operators struggling to stay afloat.
Baig explains this further in a clip from the interview here:
The role of innovation and investment in agriculture
The USDA, under the Biden administration, has invested billions into programs aimed at bolstering sustainable food systems, strengthening rural economies, and encouraging regenerative agriculture. This presents a unique opportunity for investors to engage with the agricultural sector in transformative ways:
- Climate-Smart Agriculture: With over $3 billion allocated to the USDA’s Climate Smart Commodities program, farmers are being incentivized to adopt carbon-sequestering practices. The ability of farms to capture carbon in soil positions them as key players in climate change mitigation.
- Regenerative and Precision Agriculture: Precision agriculture technologies, such as AI-driven irrigation and soil health monitoring, are gaining traction as efficient solutions to maximize yield while reducing resource consumption.
- Alternative Proteins and Bio-Based Economies: The USDA’s research arm has historically funded innovations in food technology, including the early development of pea protein extraction techniques used in products like Beyond Meat. With rising consumer demand for alternative proteins and Biden’s bioeconomy strategy, this sector remains a strong investment prospect.
- Food and Nutrition Security: Programs such as SunBucks, a new permanent food entitlement initiative, are helping address food insecurity while creating more stable demand for diversified food production.
Investment takeaways: A new agricultural economy
For investors, the current agricultural transition represents both a risk and an opportunity. The financial headwinds facing small farmers suggest that business-as-usual investment strategies—favoring large agribusiness and commodity crops—may no longer be the most profitable long-term play. Instead, opportunities lie in:
- Regenerative agriculture investment funds that support climate-smart farming.
- AgTech startups focused on precision farming and AI-driven solutions.
- Alternative protein companies that align with USDA-backed bioeconomy goals.
- Sustainable farmland investment funds that focus on soil health and water conservation.
American farming is at a crossroads. The financial pressures and structural shifts outlined by Baig underscore the need for a new approach—one that balances economic resilience, environmental sustainability, and food security. As impact investors, we have a responsibility to deploy capital in ways that not only generate returns but also create a more equitable and sustainable food system. The choices we make today will define the future of agriculture for generations to come.
Listen to the full audio podcast here. Watch the full video interview here.
