YUMY - AI And Robotics Are The Future Of Food

2023-07-01 04:38:00 ET

Summary

• Agri-tech companies have long been users of robotics, but this technology now combined with artificial intelligence is vital for the future of the food industry.
• The VanEck Future of Food ETF (YUMY) focuses on investing in companies engaged in Agri-Food technology (agri-tech) and innovation.
• YUMY invests in some of the key players in the industry, such as Bucher Industries AG1, which invented production pumps for tractor hydraulic systems in the 1920s.
• Current agricultural inventions, heavily influenced by AI and robotics, are necessary to feed the 8 billion people on the planet today more efficiently.
• Farmers’ dependency on AI and robotics will increase monumentally, as the number of mouths to feed on the planet is estimated to increase to 10 billion by 2050.

Agri-tech companies have long been users of robotics, but this technology now combined with artificial intelligence is even more vital for the future of the food industry.

Reimagining Farming From the Start

Farmers are always striving to find ways to operate and cultivate their lands seamlessly. From the invention of plows thousands of years ago to the reaper in 1831, to the center-pivot irrigation system in 1940, farmers have been using machines and forms of artificial intelligence ((AI)) to transform the way they farm with just a fraction of the labor.

These days, despite AI and robotics being the “talk of the town,” many may be unaware of how the food industry is using AI and robotics.

The VanEck Future of Food ETF ( YUMY ) focuses on investing in companies engaged in Agri-Food technology (agri-tech) and innovation. This encompasses industries and companies involved in new environmentally sustainable agriculture products and services.

YUMY invests in some of the key players in the industry, such as Bucher Industries AG ¹ , which invented production pumps for tractor hydraulic systems in the 1920s and has since continued to create on-trend solutions for machines. Another example is Kubota Corp ² , which produced the first horizontal, liquid-cooled kerosene engine for agricultural use in 1922. Their engines have evolved over time and the company has paved its way to carbon neutrality.

Technological Improvements In The Present

Current agricultural inventions, heavily influenced by AI and robotics, are necessary to feed the 8 billion people on the planet today more efficiently. Farmers are tasked with using modern-day technology to maximize yields - cue in drones!

Drones have emerged as innovative tools for precision farming. They allow farmers to assess and monitor their crops and livestock from far away and make decisions to improve their harvests and maintain efficiency. With their ability to capture high-resolution images of vast areas and supply attention to where it is needed, drones can detect diseases, pests, and manage irrigation resources. Trimble Inc.’s ³ creation of the Trimble UX5 Aerial Imaging Solution (drone) over a decade ago has been integral in setting the standard of collecting data with photogrammetric accuracy regardless of weather conditions.

While drones have been integral to precision farming, other inventions fueled by AI and/or robotics have been setting the stage for the future:

• Deere & Co. ⁴ created See & Spray™ Ultimate, an artificial intelligence machine that uses robotics, cameras, and extremely fast graphics to target and spray weeds. Jahmy Hindman, Chief Technology Officer of Deere & Co., said, “It’s the ability to create, in software and through electronic and mechanical devices, the human sense of sight, and then act on it.” The machine uses 36 cameras that are connected to tractors to distinguish a weed from a crop and determine whether to spray herbicide or not.

• Kuhn Group, a subsidiary of Bucher Industries AG, offers agricultural machinery that utilizes robotics. Their AUROCK seed drills have standard and optional features such as VISTAFLOW. This is a smart tramlining valve fitted to a distributor head of a tractor that monitors seeds that are passed through seeding tubes. The valve controls the rhythm and timing of the seed flow in each row.

• Lindsay Corp ⁵ has been revolutionizing agricultural irrigation since 1955. They created the Zimmatic ^® pivot systems and most recently, the FieldNet ^® , which manages irrigation systems remotely, providing recommendations and control needed to maximize yields in any climate or terrain, anytime and from anywhere.

As we continue to use AI and robotics to improve the food industry, we need to prepare for the future. What will the future of food technology look like?

The Future Of Food Technology

Farmers’ dependency on AI and robotics will increase monumentally, as the number of mouths to feed on the planet is estimated to increase to 10 billion by 2050. Additionally, global warming and climatic disruptions will force unprepared farmers to exit the business.

Within the agri-tech industry, the future of food will focus on innovations, some of which are outlined below, and all of which are necessary to prepare for the future.

Examples of companies held in YUMY that focus on innovative trends for the future:

All securities mentioned have been held within the VanEck Future of Food ETF (YUMY) since its inception. They have proven track records of focusing on innovation and using some form of AI and robotics to streamline agri-food technology.

Important Disclosure

1. Bucher Industries AG (BUCN): 2.74% of net assets as of 05/31/23.

2. Kubota Corp (6326): 2.02% of net assets as of 05/31/23.

3. Trimble Inc. (TRMB): 2.46% of net assets as of 05/31/23.

4. Deere & Co. (DE): 5.27 % of net assets as of 05/31/23.

5. Lindsay Corp (LNN): 2.38% of net assets as of 05/31/23.

This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country, and it is recommended to check with your local stock exchange.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees.

An investment in the VanEck Future of Food ETF ( YUMY ) may be subject to risks which include, but are not limited to, risks related to investments in agri-food technology and innovation food companies, equity securities, small- and medium-capitalization companies, basic materials sector, industrials sector, consumer staples sector, special risk considerations of investing in European issuers, foreign securities, foreign currency, active management, market, operational, authorized participant concentration, no guarantee of active trading market, trading issues, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, initial public offerings, special purpose acquisition companies and industry concentration risks, all of which may adversely affect the Fund. Small- and medium capitalization companies may be subject to elevated risks.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com/etfs . Please read the prospectus and summary prospectus carefully before investing.

© VanEck Securities Corporation, Distributor, a wholly owned subsidiary of VanEck Associates Corporation.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

For further details see: