Ames, Iowa
June 24, 2009
Source:
Iowa State University
Dramatic price fluctuations,
increasing demand, the food vs. fuel debate, and other events of
the past year may have food producers wondering which way is up.
Despite these recent uncertainties, 'up' is precisely the
direction an Iowa State researcher believes agriculture is
headed for at least the next 10 years.
Wally Huffman, professor in agricultural economics and Charles
F. Curtiss Distinguished Professor in Agriculture and Life
Sciences, predicts supply will go up, demand will go up, and
real prices of grain and oilseeds also will go up.
"I'm very optimistic about the next 10 years," said Huffman.
Huffman presented his research to the Organization for Economic
Co-operation and Development in Paris, France, last month. OECD
and the Iowa Agricultural Experiment Station supported the
research.
An important part of Huffman's study was the long-term trend of
corn and soybean yields in Iowa, wheat in Kansas and France,
rice in Japan and potatoes in the Netherlands. Huffman examined
the trends and then made projections about the next decade.
The optimism starts with the producers.
"Prices right now for corn and soybeans are up about 50 percent
relative to two years ago, so those are relatively good prices,"
he said. "That's good news for grain producers."
The impact that the rising demand for biofuels will have on the
market for agricultural products is not entirely clear, but
grain and oilseed prices will generally be higher than they
would be without biofuels.
"Overall, biofuels are probably a good thing for farmers," he
said. "However, there will be more erratic variation in grain
and oilseed prices than there would be without biofuels," he
said.
The main reasons are the erratic components to both supply and
demand of crude oil.
While biofuels are pushing demand for grain and oilseeds up,
Huffman says the long-term trend in supply of grain and oilseeds
is due to new technologies that are being developed by the
private sector and marketed to farmers.
"Supply is going up, and demand is going up," he said. "I think
they will grow at a similar pace. There will be occasional
spikes due to bad weather and abrupt restriction in crude oil
production, but prices will come down. When they do, they will
come down to similar levels to what they are now in real terms,
and those are pretty good prices.
"For the past 100 years, on average, real agricultural product
prices have been falling as technology has been allowing supply
to increase faster than demand," he said.
But for the past decade, demand has been rising as quickly as
supply, he added.
Yields for major field crops in major producing areas have been
steadily increasing. There is no indication that the rate is
slowing and no reason to fear falling crop yields. Huffman
predicts that the rate of increase in yields for corn and
soybeans in major production areas will rise much faster than it
has in the past 50 years.
"In the case of corn, since 1955 the average rate of increase in
Iowa crop yield has been two bushels, per acre, per year," said
Huffman. "That's an amazing accomplishment starting from about
65 bushels, per acre, per year in 1955, up to about 165 bushels,
per acre, per year now."
Huffman thinks the future will be even better.
"From 2010 to 2019, corn yields are going to increase quite
substantially, maybe at four to six bushels, per acre, per
year," he said.
Much of the increase will be due to genetic improvements in
hybrid corn varieties associated with new, multiple stacking of
genes for insect protection and herbicide tolerance that will
permit a major increase in plant populations.
These improvements are the result of corn that has been
genetically modified (GM) to have certain desirable traits.
Also, better equipment, improved farm management, and reduced-
and no-till farming will contribute to rising corn yields in the
Midwest.
Other commodities have also improved yield and will likely see
continuing increases, according to Huffman.
Soybean yields in Iowa also are increasing, although less
dramatically than corn, says Huffman.
The trend over the past 50 years is an increase of about .5
bushel, per acre, per year (bu/ac/yr). That rate of improvement
in Iowa soybean yields will continue or possibly increase over
the next decade. Current soybean yields are about 50 bu/ac/yr.
Kansas is the leading producer of wheat in the United States
with yields of about 45 bu/ac/yr. Yields have been improving at
about .5 bu/ac/yr since about 1950.
Farmers in France are producing wheat at about 113 bu/ac/yr.
Yields are improving at more than 1.5 bu/ac/yr.
France is the leading wheat producer in the European Union, and
Huffman attributes much of their production advantage to the
French emphasis on wheat advantage. They are also showing faster
production improvement. France often puts their best land into
wheat production. Huffman predicts wheat yields may increase
faster if GM wheat is more successful.
Japan is a major rice producer. Yields are improving at a rate
of .5 bu/ac/yr, and are now at 113 bu/ac/yr compared to around
90 bu/ac/yr in 1960. GM rice has been tried, but has not
measurably increased yields, according to Huffman.
Netherlands is the most advanced country in the world when it
comes to potato production technology. Yields in the Netherlands
have been increasing by about 4.6 bu/ac/yr over the last 50
years and are now at 670 bu/ac/yr.
"Potatoes are a major world food crop and they don't get a lot
of attention," said Huffman. "They are consumed in large amounts
in Europe and other places, including the United States, and
yields are phenomenal."
Several variables will impact the future of crops.
According to Huffman, the biggest are:
- both private companies and
government researchers are working on improving production
- higher yields as a result
of new techniques in breeding crops, including methods to
condense decades of breeding and testing into a few years
- change in biofuels from
corn-based to biomass-based by 2019
- GM crops gain more
acceptance in Europe
 Huffman's
entire report, Technology and Innovation in World
Agriculture: Prospects for 2010-2019, is available
here.
Abstract
The objective of this
paper is to assess prospects for increasing agricultural
productivity through advances in technology and
innovation in farming techniques for developed and
selective developing and transition countries over
2010-2019. Over this period of time, the net impact of
climate change is expected to be small, perhaps positive
on cereal yields. However, environmental concerns
(carbon dioxide release from bringing new lands into
crop production and erosion on marginal lands brought
into crop production, additional agricultural chemicals
applied, and less biodiversity) may grow if meeting
future demand for food, feed, fiber and bio-fuels
require the conversion of forests and pastureland to
cropping. The paper first provides a review of
agricultural TFP growth for OECD countries and other
large developing or transition economies. Second, a
discussion of the organization of science and technology
for agriculture is presented. Third, new agricultural
technologies for cereal, oilseed, and potato production
and for livestock production are discussed and their
impacts assessed. Fourth, the contributions of public
and private agricultural research capital to
agricultural productivity are summarized. Fifth,
prospects for new agricultural technologies primarily
developed by the private sector over the next decade are
described and evaluated. Although not everything is rosy
for future developments of agricultural technologies for
farmers in developed countries to 2019, the combined
efforts of public and private agricultural research will
provide a steady stream of new crop and to a lesser
extent livestock technologies for farmers over this time
period.
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