We asked agriculture investors what to expect in 2025. Here’s what they said

By Eric Spell, Kacey Toews, Allyson Abbas & Meredith Brosofsky

In 2024, private equity agriculture investors faced a year of economic challenges, marked by softened demand and a pullback in new investments. Sponsors turned their focus toward stabilizing and supporting existing portfolio companies rather than seeking new acquisitions or growth ventures.

Despite these headwinds, innovation persisted. Portfolio companies adopted advanced technologies and sustainable practices, from precision agriculture and regenerative methods to drought-resistant crop development.

While more promising innovations are on the horizon, the path forward remains uncertain. To better understand the outlook for 2025, we connected with key leaders in the agriculture investing space to gather their takeaways from the year and predictions for what’s ahead.

Cautious approaches to investment

Economic uncertainty continues to set a cautious tone for agriculture investors. Our conversations revealed that, despite stabilized portfolio companies, limited capital for new investments is prompting a focus on strategic ownership terms and the exploration of mergers as paths to consolidation.

Many noted that 2024 saw a softening in macro consumer demand across retail and foodservice channels, influenced by the exhaustion of stimulus funds. This slowdown in sales growth posed challenges for deal-making. Looking ahead to 2025, modest improvements in growth are anticipated as volume trends return to long-term averages of low single-digit increases.

This cautious yet optimistic outlook for the new year reflects similar sentiments expressed in 2023, when many private equity groups planned to delay significant investments for two to three years. With strategies now being reconsidered, some firms are preparing to test their revised approaches.

Others in the space expressed more optimism for 2025, anticipating a “growth year” marked by an expanding pipeline of opportunities and increased momentum for both large enterprises and startups.

Emphasis on AgTech and sustainability

In AgTech investing, technological advancements and sustainability initiatives remain key areas of focus. There is strong interest in automation solutions, such as robotics for crop-production tasks like seeding, spraying and weed management. However, leaders noted that overcoming farmers’ reluctance to adopt new technologies will require ensuring these solutions are financially viable.

Several investors also highlighted traction in AgTech solutions for the dairy sector, including reproductive technologies like IVF. Yet, challenges remain in implementing these solutions in the field and proving product market fit.

Rural recruiting and talent gaps

Talent shortages are still a significant hurdle, especially in specialized fields. There is a growing demand for sustainability experts, as well as professionals skilled in precision agriculture and innovative farming practices. These gaps occur more often in rural areas, where technology-focused roles are less common.

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The difficulty of relocating and retaining skilled professionals in sparsely populated regions remains a concern. Additionally, there is a recognized challenge in finding operationally oriented CFOs, whose diverse skill sets across finance and operations are crucial for private equity success.

Growth opportunities in 2025

The agriculture investing space presents a mixed forecast. Investors are cautiously optimistic, prioritizing growth and sustainability despite ongoing economic pressures. The demand for automation, biological innovations and environmentally sustainable practices suggest AgTech will continue to play a critical role in shaping the industry’s future.

However, addressing talent shortages—particularly in areas related to technology, sustainability and rural operations—will be essential for short-term success.

To learn more, contact Eric Spell at (336) 217-9116 or eric.spell@charlesaris.com.