Global grain production ramps up

KEITH WOODFORD
Last updated 05:00 26/01/2014

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OPINION: One of the repeated perspectives of recent years has been how the world faces enormous challenges in feeding the 9.5 billion people now expected to inhabit the Earth by 2050.

The assumption has been that the enormous gains of the so-called Green Revolution from the 1960s through to about 2000 were unlikely to be repeated.

This Green Revolution was characterised by the breeding of short-stemmed grains that could support heavier heads of grain, combined with breeding for disease resistance and higher yields.

Norman Borlaug is often credited as the father of the Green Revolution for his spectacular breeding successes with wheat in Mexico in the late 1960s, but from there the ideas were transferred around the world and to many other crops.

In the latter years of the 20th century, additional spectacular results were achieved with the breeding of hybrid corn.

The years since the start of this 21st century have turned out better than many had dared to hope.

According to the latest data from the United Nations Food and Agriculture Organisation (FAO), total grain production increased a further 24 per cent from 2000 through to 2012.

Figures for the 2013 year are still forthcoming, but the latest estimate from FAO is for an amazing 8.4 per cent increase, with the rebound from the North American drought being a key factor in the latest increase.

Global population is now increasing at only about 1.1 per cent a year. Hence, most of the increasing grain production is for the feeding of animals rather than humans.

This year, FAO expects human food consumption to increase 1.7 per cent, while grain fed to animals will increase 6.3 per cent. This still leaves an increase of 68 million tonnes in storage.

One consequence of the production increases is that grain prices have been dropping rapidly. Since the start of 2013, rice and maize are both down 25 per cent in price, and wheat prices are down close to 20 per cent.

Despite all of the above good news, the number of hungry people in the world remains stubbornly high at about 840 million. As a percentage of total population, this number has been declining steadily for the last 20 years, but in absolute terms has only decreased by 180 million people during that time.

The areas where undernourishment is most severe are easy to identify. They are Africa, parts of South Asia, and anywhere that there is war. Most of the rest of the world is getting increasingly wealthy, and with this comes the income to purchase protein foods. These are produced by feeding grains to animals. So the real problem is not simply one of production; rather it is how to get more food grown in those parts of the world where it is most needed.

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Looking ahead, most of the population growth will be in Africa, where populations are expected to more than double in the next 35 years. In contrast, the population of Japan is already in decline, much of Europe is about to follow, and China will decline from about 2028.

A major unknown is the extent to which grain, and particularly maize, will in future be diverted to biofuels. Currently some 40 per cent of the American maize crop is diverted to biofuel. The biofuel comes from the carbohydrate component, with the protein component still available for stock feed.

The economics of biofuel from maize have always been doubtful, but it was never a case of economics. Rather, it was about American energy security and independence from overseas oil. The overseas oil situation is now changing to an amazing extent as a consequence of fracking technology and the consequent upsurge in American oil and natural gas production. In addition, production of biofuels from algae is looking increasingly attractive relative to production from maize. It is now looking more and more as if biofuel production from maize has hit a plateau, with further increases unlikely.

The expectation is that global demand for animal protein will continue to increase, so the battle to keep grain production increasing in line with increasing demand for grain is still far from won. Most of the increases in the last 12 years have come from increased yields rather than increased area, and this situation will have to continue. Precision agriculture is where many of the opportunities lie. The biggest threat is declining water resources, particularly across Asia.

Keith Woodford is Professor of Farm Management and Agribusiness at Lincoln University. His archived writings can be found at http://keithwoodford.wordpress.com

- Sunday Star Times

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