How Are Farmers Managing Risks in 2025?

You must know that major disasters and severe weather conditions resulted in over $21 billion in crop losses in 2023! And if that is not alarming for you, then be aware that the USDA has forecasted a sharp $42 billion dive in net farm income this year, which is historic.

Farming has always been a tough job, but these spiking numbers depict an unignorable reality, that is soaring risks, shrinking profits, and exponentially growing uncertainty.

Due to recent changes in our environment, unpredictable market trends, and rigid regulations, how can we make our farms safe and resilient???

Well, the answer to this sought-after question is modern technology. Modern solutions, such as AI-driven crop monitoring and real-time weather tracking, are helping farmers mitigate risks and make data-driven decisions.

Let us first have a look at the major risks that threaten our sector.??

Key Risk Factors in U.S. Agriculture??

Every farming season comes with new challenges for the farmers. Understanding these risks is the first step toward their effective management and mitigation.

Environmental Risks??

According to USDA Between 1990 and 2022, greenhouse gas emissions from U.S. agriculture increased by 5.1%. Extreme weather, droughts, and flooding mean that we have to fight hard to protect our crops and livestock.??

Market Risks??

Market volatility is a battle that never seems to end. Prices fluctuate uncontrollably, input costs skyrocket, and farmers have to take the hit for this all.

In 2022, 23% of U.S. farms were under dept and total farm sector debt was expected to exceed half a trillion dollars in 2024. This delt meant higher stakes and managing these risks needs careful financial planning.??

Economic and Market Challenges??

Agriculture is the foundation of the U.S. economy, contributes to 5.5% of GDP, and gives employment to 10.4% of the total workforce. However, changing demand and trade policies make farm incomes highly uncertain.??

Technological and Infrastructure Gaps?

Precision farming is making progress, but its adoption is slow. The productivity benefits gained through automation, artificial intelligence, and remote monitoring are lost on many farms that continue to use outdated methods.??

Policy and Regulatory Pressures??

Due to outbreaks in the past due to foodborne illness, the U.S. produce growers are being subjected to stricter food safety rules.

According to NCBI, in 2012 alone, 831 outbreaks resulted in nearly 15,000 illnesses and 23 deaths. Although compliance is costly, non-compliance is even riskier.??

Changing Consumer Preferences??

Farming is evolving fast, the certified organic U.S. farmland expanded from 1.8 million acres in 2000 to 4.9 million in 2021. Adapting to these changes can open doors to new markets, but it also mandates investment and long-term planning.??

Smart Solutions for Farm Risk Management?

Modern technology and data-driven strategies, such as the following, are helping us to handle these risks head-on.??

Weather Forecasting & Climate Monitoring??

According to AEM, 48% of farmers have reported losses due to weather exceeding $10,000 in the last year, with droughts impacting over 80%. More farmers are now using on-site weather monitoring to make informed decisions to minimize damage.??

Price Monitoring & Financial Planning??

Digital tools help farmers track prices, manage their expenses, and forecast financial risks proactively. According to research by Science Direct, buffer stock programs have been shown to increase smallholder farming incomes by at least 12%.

Supply Chain Optimization?

the global market for agricultural supply chain management of $1.015 billion is growing at 10.05% annually.? Efficient logistics and better supplier coordination can minimize losses and boost the bottom lines.

Compliance & Food Safety Management??

Complying with food safety regulations is not a choice, and to top it, its cost is also rising. Small farms spend over $12,000 annually to meet FDA rules. Modern solutions like AgriERP help automate compliance tracking and reporting.??

Precision Agriculture & Remote Monitoring??

More than 50% of large farms have started using precision agriculture technology. But despite this, drone and satellite imagery adoption is low and according to ERS only 7% of corn acres used aerial imagery in 2016, and 9.8% for soybeans in 2018.

Increasing the use of these technologies can uplift and refine how we monitor crops.??

Automated Task & Financial Management??

In a survey by Artsmart, 70% of AI-using farmers experienced a 20% increase in efficiency and yields. Financial and market analytics tools powered by AI, like AgriERP, provide real-time insights and help farmers refine their operations.??

Early Disease Detection & Crop Protection??

Plant diseases result in 21.5% of wheat and 30.3% of rice yields lost globally. To cater to that we must detect disease before it wreaks havoc. The latest monitoring tools help in early disease detection,? save crops, and increase yields.??

Integration with Precision Ag Tools??

Platforms like AgriERP are embedded with precision agriculture tools that allow real-time data collection. Resulting in better decision-making, and improved planting and irrigation techniques.?

Conclusion

The population of our planet is rising exponentially and so is the global food demand, which is forecasted to increase by 60% by 2050!

We must prepare for our future that has plenty of food for all. However, for that, we need to adopt highly effective risk management techniques. But risk management is not just about survival, it is more about thriving in an industry that is constantly shifting.??

What strategies have helped you manage farm risks?

Share your thoughts with us in the comments below. And if you are looking for more insights on smart farming solutions, then, subscribe to our newsletter!