Agricultural industry is given a lot of attention to boost agriculture production and the economy of the country. Due to the growing need for food, the worldwide agricultural business has seen a significant change from conventional to modern farming practices, such as variable rate technology (VRT). Increasing average farm size and raising agricultural input costs are the key driving factors that make food producers adopt variable rate technology (VRT). A farm's operating expenses are called input costs, and they include the initial investments required to start producing. These include products such as fertilizer, pesticides, seeds, and other supplies used in production.
Read Report Overview: Variable Rate Technology Market
The global variable rate technology market was valued at $2.02 billion in 2021, and it is expected to grow with a CAGR of 20.28% during the forecast period 2022-2027 to reach $6.09 billion by 2027. The growth in the global variable rate technology market is expected to be driven by increasing demand for agricultural output and decreasing labor force in the agriculture industry.
Many VRT software start-ups are entering the market with low-cost pricing models, making map-based VRT technology available to smallholder farmers as well. For instance, OneSoil is a startup in the variable rate technology market. The company aims to develop technologies that will be accessible to small to large-scale farm producers. OneSoil offers a Scouting mobile app for field monitoring and an online application that assists in calculating fertilizers for variable rate applications. These applications are available for free download and usage, making them a valuable resource for farmers that don’t have access to specialized onboard computers and other equipment.
The gap between the U.S. and other global countries in the pace of adoption of other precision agricultural technologies is relatively narrow. However, in the case of variable rate technology, the adoption rate is around 14.1%. Therefore, the global variable rate technology market players have room for growth across the U.S. and other global countries during the forecast period.
As per the World Bank data, the employment percentage in agriculture decreased by around 13% during 2000-2019. The steep decrease in the agricultural labor population has to be replaced with an efficient technological solution to bridge the supply and demand gap in the agricultural industry. Reducing the agricultural workforce and increasing labor costs is expected to bring more space for automation in the agriculture industry and, thus, the demand for variable rate technology.
Variable rate fertilization (VRF), variable rate seeding (VRS), variable rate irrigation (VRI), variable rate crop protection chemical (VRC), and others are some application segments in the global variable rate technology market.
During the projected period, VRF is anticipated to have a dominant market share in the global variable rate technology market. North America, South America, and China are likely to have high CAGR growth in VRF, as these countries are focusing on avoiding excessive fertilization to retain soil fertility. VRS is predicted to acquire incremental market share in the global variable rate technology market from 2021 to 2027 due to its rising adoption to offset growing agricultural seed costs.
Global Variable Rate Technology Market (by Technology)
The input for variable rate controller is feasible by adopting either of the two technologies, i.e., map-based and sensor-based technology. The map-based technology is expected to hold dominating market share in the global variable rate technology market during the forecast period. This is mainly due to inexpensive initial investment costs (compared to sensor-based technology) and reliable results from using numerous data sources to create the prescription map.
Global Variable Rate Technology Market (by Region)
North America and Europe are expected to register the highest demand for variable rate technology during the forecast period. Variable rate technology is anticipated to grow rapidly in these regions because of rising agricultural input costs, particularly fertilizer costs, and growing average field size. Growing average field size or small farm consolidation would pave the way for VRT deployment by shortening the VRT payback time due to large-scale farm productivity.
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Competitive Landscape
The global variable rate technology market is highly consolidated, with a small number of dominant established players and a smaller number of rising start-ups. The market participants compete based on product offerings, price, innovative solutions, and service customization. When it comes to product offerings, the players on the market are offering solutions that may meet the needs of various crop kinds and uses. In terms of pricing, due to the long lifespan and high component price used in hardware, the VRT providers can only leverage software and service pricing to achieve market leadership.
In addition to established companies, a few start-ups are also attempting to capture market share by introducing innovation. For instance, Semios offers variable rate mating disruption, a pest control strategy that uses automated video traps and spray timing tools to release pheromones at a variable rate to prevent insect mating in the field while crops are being produced.
