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Farming is a profession of hope.
— Journalist and novelist Brian Brett

Today, that quote applies less. Visit almost any agricultural enterprise in 2024 and you’ll quickly realize how little it has in common with farms past. Back in the day, hazy weather forecasting, crop-destroying pests and radical changes in demand—to name just some of the vagaries affecting profits—made the whole endeavor iffy and nerve-wracking.

Over the years, the number of farms in the U.S. has declined dramatically from 6.8 million in 1935 to around two million as of last count. Consolidation is a huge reason why: Over the past three-plus decades, major agricultural concerns have been expanding their reach, gobbling up acreage and market share.

Amber waves of tech

We tend to get nostalgic about the glory days of family farming, but there’s a definite upside when agriculture goes big. Economies of scale make it possible for the key players in the field to take advantage of groundbreaking technology, if you’ll pardon the pun, resulting in a new approach called precision farming.

These developments come not a moment too soon. The fact is, we need every tool at our disposal to feed a population expected to reach 10 billion by 2050. Estimates show that if 25 percent of all farms adopted precision farming by 2030, it could lead to yield increases of over 300 million tons per year, cut farming costs by up to $100 billion per year and reduce wastewater by up to 150 billion cubic meters annually.

That means businesses contributing to the expansion of precision farming are worth a look. Here are a few.

From almanacs to satellites

More accurate weather prediction is a key component of precision agriculture, and one firm that has made a name for itself in that area is Spire Global (SPIR). Headquartered in San Francisco, Spiral has launched some 140 small satellites that orbit close to Earth, providing highly detailed information on climate conditions affecting crops. The company also amasses the data it collects, then uses those analytics to make predictions even more reliable.

Spiral has done well for itself: Q3 revenue in 2023 was up 34 percent year over year, coming in at a record $27.3 million, and at least four investment analysts rate the stock a “buy.”

Not all companies involved in precision agriculture have done as well recently, however. One example is Trimble (TRMB). Among other things, Trimble offers precision GPS farming tools for farm planning, field mapping, soil sampling, tractor guidance, crop scouting, variable rate applications, and yield mapping. But Trimble had a rough ride in 2023, losing 1.4 percent against a market gain of around 22 percent.

Still, investors who hung in for the long term made about eight percent a year over five years on Trimble stock. And the firm just sold its water monitoring business this month, which could sharpen its focus on its more core products.

In-cab upgrades

Precision agriculture tools often need to be integrated into existing farm equipment to be effective. One company in the forefront in that respect is Topcon Positioning Systems (TOPCF). It provides in-cab operating software as well as other digital farm management tools that gather and analyze data to deliver insights to farmers.

The Japanese enterprise has had a rocky three months and some believe its stock is overvalued. However, its net sales were up by nearly two percent year over year in Q2 2023. Plus, the advanced techniques required to make Topcon products are becoming more mainstream, which could reduce its operating costs and make it a more attractive investment.

Seeds of success?

Corteva (CTVA) is another company worth noting. This chemical firm, once part of Dupont, manufactures herbicides that meet high environmental standards. In 2024, the business is restructuring and it won’t report earnings until the end of this month. What we do know is that its shares are down nearly 23 percent compared to last year. Nonetheless, 26 analysts have rated the stock a “buy”—an indication, perhaps, in their confidence in the business over the long run.

Bottom line for investors? Some of the downward ticks noted here may give pause, but overall, the future for companies supporting precision farming looks bright. So those hoping to harvest decent returns might consider this: The global precision farming market size was valued at nearly $10 billion in 2022 and will likely grow at a compound annual growth rate (CAGR) of 12.6% from now until 2030.

That indicates a big change in the farming industry—and a potential boon for related stocks.