numbers—growers paid $16.3 billion for 850 million farm labor hours. So, automation is the best and truly only scalable way to solve the labor challenges. One-third of those hours comprise non- harvest activities (weeding, thinning, spraying, harvest assist, autonomous mobility), which are 3 percent to 5 percent automated and forecast to get to 16 percent to 20 percent automated by 2030. Two-thirds are on harvest activities and less than 1 percent of that is currently automated. With venture capital declining by 70 percent from 2021 to 2025 (from $54 billion to $16 billion), harvest is going to struggle to attract additional venture capital because it is a small addressable market (each crop needs its own robot—compared to weeding where one robot can do dozens of crop types), and building harvest robots is really tough (turns out that replicating the skilled farmworker’s ability to look at a field, identify the fruits and vegetables that are ready to be picked, pick them and place them into a container without damaging them is pretty hard). This lack of capital, combined with these aforementioned difficulties, will continue to make harvest solutions challenging. Western Growers is working with our partners at Reservoir Farms and John Deere to help harvest and other automation startups reduce their time and capital needed to get through R&D to first commercial product, and that does make it easier—but not easy. All of the above is why the most important number in specialty crop automation is not the venture capital total the segment receives. No, it’s the amount of revenue the startups are able to deliver annually. Venture capital helps startups stay alive and build products—and ideally get to commercialization and scale. But the more accurate indicator of how the economics are working for local ag communities is the revenue number. This is the number that makes sure local jobs are created. I mentioned above that we have a clear path to $1 billion in automation revenue by 2030 based on the $3 billion in automation revenue investments already made in the last 10 years. In a similar fashion, if you model out the next 10 years, even with the 70 percent reduction, there is likely to be $7 to $8 billion in venture capital into agrifoodtech over the next 10 years. Historically, I expect agtech to be like most tech segments—the first billion is the hardest, as infrastructure
is built that can be reused by future investment dollars to grow the category more capital-efficiently. With $7 to $8 billion in additional VC, an additional $2 to $2.5 billion in revenue would be generated. On top of the $1 billion forecast by 2030 (which will grow past 2030—likely to $1.5 to $2.0 billion by 2035), the total agtech automation revenue forecast for 2035 is somewhere between $4 billion and $5 billion. If we use the midpoint of $4.5 billion in 2035 automation revenue, that will create an additional $1 billion-plus of opportunities in systems integration and data/analytics solutions. All of this will create tens of thousands of jobs, many of them in rural areas where the automation solutions will be sold, serviced and supported. These will be highly skilled rural jobs with agtech skills required. The tale of the second city happens if California is unable to make some key policy changes. Acreage is already moving to Mexico and South America, where California’s $30 to $32/hour H-2A labor contrasts with domestic $4/hour labor. Peru is investing $24 billion in private- public partnership funding to develop 22 surface water storage projects while
California struggles to put a shovel in the ground and get the $6.2 billion needed to build Sites Reservoir to put the start line into play. Peru and China built the $3.6 billion Chancay Port—which cuts 10 to 20 days off logistics for much of the produce that goes from Peru and other parts of South America to China and Asia. Finally, Peru has publicly stated an objective to develop 1 million hectares (2.47 million acres) of additional irrigated ground to help push their ag exports to $40 billion by 2040. My forecast is that Peru passes the ag export total for California in 2035. That’s the horror story tale of the other city—what if Peru executes on not all, but just most of the plans laid out above? How will California respond, and will it be fast enough to protect the decades of agricultural production, processing facilities and supply chain expertise that is already here? California growers are the best growers and entrepreneurs in the world—they have to be to continue growing here. It’s not going to be their fault if the second city becomes the actual scenario.
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17 Western Grower & Shipper | www.wga.com October – December 2026
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