If current population trends continue, our world will face the challenge in the next 10-15 years of feeding another China, or about another one billion people. Most of that growth will not be in the U.S., but provides an ideal market for U.S. farmers.
Speaking at the recent Southern Crop Production Association’s annual meeting in Savannah, Ga., John Chrosniak says these dramatic population changes constitute mega-trends in economics that provide some permanent trends that offers some exciting challenges for U.S. growers.
Chrosniak, who is a senior economic planner for DuPont, says, “the current middle class in China exceeds 300 million people — more than the total population of the U.S. These people want to drive cars and eat more meat.
Right now Brazilian soybeans are feeding Chinese livestock that provides meat for China’s middle class,” he explains.
China, Chrosniak says, will be a bigger and bigger customer for U.S. farm goods. The Chinese economy since 2005 has grown at better than 10 percent per year, compared to 3.5 to 4.5 for the rest of the world.
As economies grow in China, India and other rapidly emerging economic nations, and as people acquire some wealth, the first thing they want to buy is an improved diet — not I-pods and modern gadgets, according to Chrosniak.
“These worldwide population trends, that we call mega trends, will drive agriculture for the next 100 years. We believe these mega trends are producing some permanent trends that bode well for agriculture. As middle classes grow in China and India and other countries around the world, the demand for high quality food and fiber products will grow,” the DuPont economist contends.
In addition to demand for better food and fiber products, the rapidly growing middle class of countries from Mexico to China will demand better transportation and that means more competition for our finite source of petroleum products. Worldwide there will be an increasingly loud call for alternative fuel, which again offers some long-range opportunities for farmers to produce viable sources of sustainable energy.
A third demand by people who acquire resources worldwide will be the demand for safety and security. High on that list is better quality food that offers a healthy, high standard of living for people in developing countries.
“I believe these perma trends means agriculture will see greater and greater demands from developing more efficient crop protection materials to better utilization of the land at the farm level,” Chrosniak says.
“Unfortunately, there is no silver bullet for agriculture, he adds, the answer lies in a combination of strategies. How we get to the point of producing 500 bushels of corn per acre and 150-200 bushels of soybeans per acre as a worldwide average, for example, is a challenge that faces companies like DuPont, and all the other players on a worldwide stage, right down to the farm level,” Chrosniak concludes.
Worldwide, farm acreage has increased by only two percent over the past decade, while in the U.S. acreage is down. At the same time, the world population has increased by 12 percent. Over the same time period, consumption of pork has increased 27 percent, chicken 28 percent, soybeans 40 percent, and corn 22 percent.
The demand for agricultural products is not just increasing for food products, likewise for fiber, both cotton and forestry product use has increased steadily over the past decade. Again, neither U.S. cotton nor wood production or demand has increased nearly as rapidly as worldwide demand. The demand for these U.S. made products will increasingly come from foreign markets.
Cotton is a good example. The U.S. textile industry is rapidly declining, leaving demand for U.S. grown cotton now under 20 percent. It is projected by 2015 China will import nearly half (47 percent) of the world’s cotton production. Based on this trend, Chrosniak contends the future for American cotton producers is bright.
On the other side of that coin, American cotton producers have to understand they are growing a crop for sale outside the U.S. The cotton quality that is demanded by foreign buyers is different than the quality needed by domestic textile mills. Similar parallels exist in other crops, forcing U.S. growers to take a closer look at what foreign markets want and how they can best compete with farmers on a world market, the DuPont economist stresses.
He points out that worldwide soybean demand will grow by 27 million tons. Of that 27 million tons of increase, China will use 78 percent. Countries like Argentina, once minor players in world soybean production are expected to crush more than three million tons per year.
A limiting factor in increasing farm productivity may be water. A recent United Nations report says, the world’s source of freshwater, such as rivers, lakes and groundwater reservoirs, will not be able to sustain future generations if they continue to be overexploited.
The report, “Let It Reign: The New Water Paradigm for Global Food Security” warns that without major reform in water management, by 2050 the world may require twice as much water to sustain its projected global population of 9 billion.
In the Southeast, farmers are facing the consequences of an ongoing drought, that has already threatened the livestock industry in Georgia, Alabama, South Carolina, North Carolina and Virginia because of a dire shortage of winter forage and hay. Water wars between Alabama, Georgia, and Florida over use of water from the Chattahoochee River has received national attention. And, a water war over use of water from Catawba River in North Carolina and South Carolina has already gone to the U.S. Supreme Court.
A second limiting factor for U.S. farmers will clearly be energy. In the U.S., production of biofuels is expected to top 30 billion gallons — a 14 percent increase. The European Economic Union, by comparison, is expected to grow at better than 25 percent.
How to convert energy from the sun to plants to sustainable energy is a race against time, as fossil fuel costs are threatening to top $100 per barrell.
Ethanol and methanol produced from plants and livestock waste simply cannot provide the needed volume, nor at a favorable price, nor without severely impacting food prices needed to replace a high percentage of fossil fuel use worldwide. One over-looked, but potentially sustainable source of energy is biobutanol.
A single gallon of biobutanol produces 110,000 BTUs — comparable to the power output of gasoline. It can be used in gasoline powered cars with no overhaul and doesn’t have the transportation problems of ethanol and methanol.
The key will be to find the right conversion material. Currently, biobutanol and ethanol are competing for the same source — primarily corn. Regardless of what the source for biobutanol is, the best bet is that it will be grown as a non-edible crop and grown on farmland not ideally suited to crop production.
From fuel to food, to fiber, on a worldwide basis, Chrosniak contends the future for agriculture is bright.