McKinsey: Farmers Turn to AI Faster Than Other Technologies as Cost Pressures Bite

McKinsey's Global Farmer Insights 2026 reports a clear shift: farmers are adopting artificial intelligence faster than robotics, electric machinery, or sustainability software. This follows several years of constrained spending as elevated costs for labor, land, equipment, financing and fertilizer squeezed margins.

Generative AI is now in use on about 17% of farms worldwide, making it one of the fastest-growing technologies in agriculture. Farmers, especially in the Americas, are using AI for rapid agronomic advice and day-to-day decisions. McKinsey quotes David Fiocco, a senior partner, saying these forces—higher costs, policy uncertainty, unpredictable weather and labor shortages—have made farm decisions harder, and growers are turning to AI to help manage that complexity.

The survey shows a 24-percentage-point decline in spending intent compared with the previous cycle. When profitability worsens, more than a third of growers identify fertilizer as the first input to cut. That suggests short-term cost management remains a priority even as growers explore precision and digital tools.

Robotics, electric-powered machines and sustainability software show limited penetration on farms compared with AI. The report does not claim these technologies won't grow, but indicates they lag current adoption of AI tools for decision support and planning.

Biological crop inputs are a notable growth area. McKinsey reports that more than half of specialty crop farmers now use at least one biological product—chemical alternatives intended to protect or boost crop growth. That contrasts with the quick cutbacks in conventional inputs like fertilizer.

After years of squeezed margins, global farming is signaling a potential recovery: commodity prices have risen in recent months, trade flows are shifting, and equipment orders are picking up. McKinsey frames AI adoption against this backdrop: growers have tightened spending but still invest where technology can reduce risk or improve decision-making. The adoption pattern points to targeted use of digital tools that can produce immediate managerial benefits, rather than broad hardware upgrades.

What this means for farmers and suppliers

• Farmers are prioritizing tools that reduce day-to-day decision risk and provide agronomic guidance quickly.
• Suppliers of digital services and AI-based advisory tools face growing demand, especially in the Americas.
• Providers of capital-intensive technologies such as robotics and electric equipment may find slower near-term uptake until margins and investment intent recover.

McKinsey's 2026 survey shows a pragmatic adoption pattern: farms are cutting discretionary and input costs but investing selectively in AI that improves planning and operational decisions. Biological inputs are expanding in specialty crops, while heavy capital technologies lag behind.