How has world agriculture changed over the last decade?
Included in the 2004 report was a section about the outlook for Brazil. The report said “Poor Infrastructure has long been a factor limiting production expansion but that bottleneck is gradually being improved.
Many people in and out of Brazil expect that country to surpass the U.S. as the world’s largest soybean producer by 2010”. Asian rust was just becoming a major problem in Brazil in the early 2000s and the disease did slow the growth in soybean yields in Brazil for awhile. The potential for Brazil to be a significant corn exporter was just emerging in 2004. The report indicated “Under the baseline forecast corn exports continue near current levels but the risk is for production and exports to be higher than projected.” Today the infrastructure is still a bottleneck for the country, but Brazil’s exports of the major crops have increased from about 15 million tonnes to near 60 million tonnes last season. Brazil’s soybean production for 2013/14 is forecast to be higher than the U.S. output and Brazil has become a major player in the world corn market.
As we have noted before we have a tendency to underestimate the increase in world yields. One theory is that as we increase crop area, we plant and harvest land that is less suited to crop production – leading to slower growth in yields. There is little (if any) evidence that this theory is true. Over the last decade, world grain area has increased by more than 35 million hectares (close to 90 million acres) and world grain yields increased by about 13 percent. In the 1990s world grain area declined by 30 million hectares and world grain yields increased by 9 percent. We are forecasting a 10 percent increase in world grain yields from now through 2022, but the risks are that the yields will actually increase by an even larger amount.
The Doane International reports only go back to 1996. Here are a few quotes from the report that is now 17 years old. “Despite the prolonged period of stagnation in world trade, we expect market conditions to change and trade of all crops in our forecast are expected to rise. The strongest growth will occur in coarse grains to fuel rising meat demand.”“The widespread feeling is that China will be the most important region for the future of agricultural trade growth. Per Capita meat consumption has nearly doubled since 1990, an increase in demand totaling 23.5 million tonnes. China’s coarse grain consumption rose by more than 30 million tonnes between 1990 and 1995.” “A significant change in the attitude of the government would be required for India to become a major grain importer. There is little evidence that India has either the foreign exchange or the inclination to buy large amounts of grain in world markets. Until we have evidence that changes are actually occurring, we believe India will continue to be basically self-sufficient in grains in most years.” “The real impact that the rising demand has on trade will be largely a function of gains in productivity. The current tight supply situation has been caused as much by poor production as by strong demand. A recovery in world yield growth could dampen prospects for trade.”
So, the more things change, the more they stay the same. A lot of the issues that were important in 2004 are still important in 2013. We thought developments in China, Brazil and the FSU would be big drivers for agriculture in the coming decade and those are still the key issues for the future. If the past is any guide there will be a lot of interesting developments between now and 2022/23 and the magnitude of these changes may be significantly different than currently expected.