Expansion of oilseeds and coarse grain production over the next decade will be driven by strong demand for biofuels, particularly in developed countries, and growing feed requirements in developing nations, a new report says.
The greatest growth in world crop production over the next decade is forecast to be in oilseeds, up 26 percent according to the latest Agricultural Outlook analysis by the Organization for Economic Development and the Food and Agriculture Organization.
The expansion of oilseeds and coarse grain production will be driven by strong demand for biofuels, particularly in developed countries, and growing feed requirements in developing nations, the report says.
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The recent decline in prices of major crops is expected to continue over the next two years, before stabilizing at levels above the pre-2008 period, although “markedly below” recent peaks.
Demand for agricultural products is expected to remain firm, while expanding at lower rates than in the past decade. Cereals are still at the core of what people eat, the analysts say, but diets are becoming higher in protein, fats, and sugar as incomes rise and urbanization increases.
Such changes, combined with a growing global population, “will require substantial expansion of production over the coming decade, they say. Led by Asia and Latin America, developing regions will account for more than 75 percent of additional agricultural output during the period.
“Agriculture markets are returning to more settled conditions after a period of unusually high prices,” says Angel Gurría, OECD secretary general. “This has been helped by governments showing restraint in the use of trade measures.” Achieving gains “in ways that are both inclusive and sustainable remains a formidable challenge,” he says.
This year’s outlook is “more positive,” says Jose Graziano da Silva, FAO director general. “Farmers reacted very rapidly to high prices and increased production, so we now have more stocks available …The good performance of the agricultural sector, particularly in developing countries, will contribute to eradication of hunger and poverty.”
The expansion of food crop production will be more moderate over the coming decade, the report says, with wheat production growing by about 12 percent and rice by 14 percent, well below growth rates of the previous 10 years. Sugar production is expected to increase by about 20 percent, concentrated mainly in developing countries.
Firm meat import demand from Asia, along with herd rebuilding in North America, will keep prices above the average of the previous decade, adjusted for inflation. Beef prices are seen rising to record levels and poultry should overtake pork as the most-consumed meat product.
The expected release of accumulated global cotton stocks will boost consumption, helped by lower prices, which should then recover by 2023.
Consumption and production of biofuels are expected to increase by more than 50 percent, led by sugar-based ethanol and biodiesel.
You can read the entire report here: bit.ly/1qfCQph