Trade tensions, El Niño and other pressures could shape agtech adoption in 2027
Two new reports show that farmers in the US and South America enter 2027 amid high uncertainty. Government support, costly inputs and weather risks all put the focus on return on investment for agricultural technology.
A Purdue University barometer of US farm sentiment and an analysis by consulting firm McKinsey suggest that farmers in North and South America are heading into 2027 with considerable uncertainty. That could determine how willing farms are to invest in new agricultural technology (agtech).
US: government support and fertilizer prices
Purdue's Ag Economy Barometer found US farmer optimism up slightly, but the share reporting a strong balance sheet fell from 76% in January to 60% in October. Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture, says concerns about trade policy and the country's broader direction are shaping how producers view agriculture's long-term prospects.
McKinsey's figures show US net cash farm income in 2026 is roughly flat with 2025, while direct government payments rose from $28 billion to $47 billion, or roughly from 16% to 27% of income. McKinsey partner Tom Brennan calls this an anomaly and says it is hard to predict whether Washington will issue another payment in 2027. Fertilizer may be a bigger swing factor: farmers who bought inputs in fall 2025 were shielded from the rise in nitrogen and phosphate prices that followed February's disruption in the Strait of Hormuz. They have not yet bought for 2027.
Brazil and El Niño
In Brazil, the Selic benchmark interest rate remains high compared with 2020–21, when many farmers took on debt, and banks have pulled back on new lending. In Mato Grosso state, fertilizer affordability is at multiyear lows: growers now need about 50 bags of soybeans to buy a ton of MAP fertilizer, up from 43. Extreme weather ranked among the top three risks for 68% of Brazilian farmers surveyed.
El Niño cuts both ways. Specialty crop yields in Peru are already suffering, while Argentina and parts of Brazil could see more rain and possibly better yields. A weaker South American harvest would firm up commodity prices, which could help US growers.
What it means for agtech
McKinsey surveyed 5,500 farmers worldwide in March and April. North American farmers weighing precision agriculture tools showed a strong focus on return on investment, while in Europe usability also mattered. The biostimulants category has stayed resilient: farmers reported getting back $20 or more for every $10 per acre spent and plan to spend at least as much. Despite the gloomy overall picture, differences between regions, farms and crops are large.
