2026 Agriculture Investment Outlook: What Investors Need to Know

By Chris Rawley, CEO of Harvest Returns

The Harvest Returns team talks to hundreds of producers, agriculture technology companies, and industry insiders every year, shaping our perception of the agriculture investment ecosystem. Every December, we review the previous year’s agricultural investing scene and make some predictions about what’s in store for the new year. Last year, we forecasted that regenerative farming would be a popular category driving agriculture investments. A notable example was Mad Agriculture’s $78 million fund close for loans to farmers transitioning to regenerative-organic operations. We forecasted that investor interest in alternative protein would continue to wane. Companies in this space like Beyond Meat faced severe financial strain, cultivated meat companies had challenges accessing growth capital, and Ynsect, the world’s largest insect farming company, recently declared bankruptcy. Maybe people don’t want to eat bugs after all.

We also anticipated the appointment of Robert F. Kennedy Jr. as Director of Health and Human Services would trickle down impacting capital flows into the food system. Though some initiatives are still in the early stages, his "Make America Healthy Again" initiative includes plans to phase out synthetic food dyes, reform the "Generally Recognized as Safe" (GRAS) loophole for food additives, and reduce ultra-processed foods in school lunches. How these initiatives will shape food and agriculture investments remains to be seen.

Finally, we thought that numerous factors would begin to put negative pressure on broad acre farmland prices. That prediction did not pan out, with the August 2025 U.S. Department of Agriculture report showing average farm real estate values increasing by 4.3% to a record high $4,350 per acre, and the average cropland price per acre increasing to $5,830.

On the agriculture technology front, AgTech Media Group* reported that the five segments attracting the most investment capital in 2025 were: Plant science, precision agriculture, livestock tech, carbon and regenerative solutions, and enabling technologies (AI, data, automation).

In 2026, we’ll be watching as these evolving trends shaping capital flows into agriculture:

The De-chemicalization of Ag

Though the organic farming movement has been growing in the United States for many years, there is one sector of agriculture that stubbornly clings to synthetic chemicals. Broad acre producers, such as those growing wheat, corn, soy, cotton and similar crops at a large scale, are reliant on a well entrenched supply chain of synthetic fertilizers, herbicides, and pesticides.

Rising input costs, environmental concerns, and growing regulatory pressure are opening the eyes of corn and soy farmers that dominate American agriculture production. Nitrogen fertilizers, primarily in the form of synthetic ammonia and urea, have been essential to American agriculture since the mid-20th century, enabling dramatically higher crop yields, especially for corn, wheat, and soybeans, that feed both the U.S. and much of the world. However, only about half of the applied nitrogen is taken up by crops, with the excess running off into waterways or volatilizing into the atmosphere, contributing to severe algal blooms and hypoxic “dead zones” (most notably in the Gulf of America), nitrate contamination of drinking water, and emissions of nitrous oxide.

Our friend Damian Mason discusses the overapplication of fertilizer in American farming on his podcast. In support of this trend, many agtech companies are developing biological solutions that support nitrogen fixing to help farmers use fewer chemicals.

Animal Products Rein Supreme

In 2025, beef prices were at record highs and consumer demand for animal protein showed no signs of slowing. Innova Market Insights lists “powerhouse protein” as one of its top trends in 2026, citing continued strong consumer demand for health benefits. Additionally, Datassential’s 2026 Food and Beverage Trends  report notes that “72% of consumers said animal meat is more satisfying than plant-based meat, and 67% said there are dishes where plant-based meat just won't cut it and can't replace the comfort, texture or taste of animal meat.” As if cattle producers didn’t have enough challenges keeping up with the demand for beef, the tallow market is growing at over 7% annually. In addition to a desire for more people looking for non-seed derived cooking oils, beef tallow has a fatty-acid profile that is similar to the natural oil on human skin, increasing its inclusion in natural cosmetics. The cattle and dairy operators we talk to are seeking hundreds of millions of dollars of investment to ensure their herds and infrastructure are able to produce enough supply for the market.

Weight Loss Drugs Diets Driving CPG Investment

Anti-obesity drugs continue their rapid growth with UBS predicting more than 40 million global weight loss users by 2029. GLP drugs drive consumers towards smaller, more nutrient dense meals, with additional fiber and protein additives. Food and beverage companies are innovating to adapt their products to this trend. In 2024, Nestle introduced its Vital Pursuit ready meals as a “companion” for GLP-1 users. Other companies are introducing enhanced protein snack items ranging from ice cream to pop tarts. “GLP-1-friendly” labels are emerging in frozen and ready meal products. Accordingly, fiber rich foods, which can naturally increase the GLP-1 hormone in the body, could be the next big health trend. Relatedly, in 2026, food manufacturers are increasingly turning towards cane sugar, fruit sweeteners, and honey rather than high fructose corn syrup.

Clean & Traceability Labeling

Drivers for growing food traceability and clean labeling are consumers' increasing awareness of health, sustainability, and ethical sourcing, prompting a shift toward transparent supply chains and ingredient lists free from artificial additives. This trend is fueled by regulatory pressures, such as the FDA's Final Traceability Rule, which mandates enhanced tracking to prevent foodborne illnesses and ensure product integrity. Market projections underscore this momentum: the food traceability sector is expected to expand from $19.3 billion in 2025 to $41.8 billion by 2035, while the clean label ingredients market could reach $62-69 billion by 2030. These demands encourage the adoption of technologies like blockchain for real-time tracking, which not only builds consumer trust but also aligns with preferences for specialty crops and non-GMO products.

This surge in demand significantly impacts agriculture investment by channeling funds into sustainable and tech-enabled farming practices, as over 70% of companies report revenue growth from such initiatives, primarily to mitigate risks like recalls or reputational damage.

Investors are increasingly drawn to ventures that incorporate traceability systems and clean production methods, boosting capital for climate-smart agriculture and innovations in labeling that support greenhouse gas mitigation. As a result, agriculture sectors focused on transparency are seeing heightened venture capital and private equity inflows, transforming traditional farming into a more resilient, data-driven industry that prioritizes long-term viability over short-term yields.

What about AI?

The outlook for AI investments in agriculture and food remains exceptionally promising as of late 2025. The global AI in agriculture market, valued at over $1.6 billion in 2024, is projected to surge to $4.9 billion by 2030 at a robust 24.1% compound annual growth rate (CAGR), with generative AI subsets expanding even faster at 30% CAGR through 2026. This momentum is driven by AI's transformative applications in precision farming, such as predictive analytics for yield optimization (boosting accuracy by up to 30%), autonomous machinery reducing labor costs, and soil health monitoring that cuts water usage by 20-60%, all while advancing sustainability goals like regenerative agriculture and carbon credit verification. Government backing, exemplified by the USDA's FY 2025-2026 AI Strategy, prioritizes investments in ethical AI infrastructure, workforce training, and data platforms to enhance food safety, pest management, and resilient supply chains, signaling strong public-private synergies.

Looking ahead, AI investments in this sector are poised to deliver outsized returns, with venture capital inflows reaching $16 billion in 2024 and AgTech valuations climbing toward $74 billion by 2034 at a 12.2% CAGR, attracting funds to hard tech innovations like AI-biotech hybrids for climate-adaptive crops. Opportunities abound in scalable solutions for smallholder farmers and in emerging markets like livestock monitoring* (9% growth to 2032) and alternative proteins, offering 120-150% ROI through efficiency gains and risk mitigation. Given the stiff competition with more entrenched AI companies, start-ups using large language models and agents may have a tougher time building a moat around their business concepts and attracting capital.

While challenges like adoption barriers for small farms (only 36% planning AI uptake) and ethical concerns around data bias persist, de-risked models post-hype cycle and policy incentives position AgTech as a growing investment sector in 2026, fostering a resilient food system capable of feeding 9.7 billion people by 2050 with minimal environmental strain.

Closing Thoughts

No doubt, 2026 will be another pivotal year in agriculture. While markets remain volatile and some trends will certainly surprise us, one constant endures: capital will continue to flow toward solutions that improve the profitability, resilience, and sustainability of food production. At Harvest Returns, we will continue to evaluate where innovation meets practical impact, funding producers and technologies that solve real problems in the field. As the industry adapts to shifting consumer preferences, regulatory pressures, and global demand, the most successful investments will be those grounded in fundamentals such as healthy soils, healthy animals, healthy inputs, and healthy returns. Our outlook for the coming year is clear: agriculture remains an essential asset class, and the opportunities ahead are as fertile as the land itself.

*Harvest Returns portfolio company.