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Ag industry must step up to meet increased demand

To meet a rapidly increasing worldwide demand for food and renewable energy, agriculture — especially U.S. agriculture — must increase yield.

“If we do not, we will not have enough food, biofuels and fiber,” says Al Luke, Bayer CropScience Coastal Region vice president of sales.

Luke, addressing the recent Wheat Technology Meeting, sponsored by Bayer, in Oklahoma City, said the United States “must step up,” to meet the challenge of growing populations, shrinking production areas and demand from developing countries for improved diets.

“I’ve never seen the level of change in agriculture that’s occurred in the last six to 12 months,” Luke said. “Agriculture has to adapt to what the world is doing. We face the challenge of a new ag economy with a growing world population and an increased food and energy demand. Agriculture is in the forefront of energy development,” he said.

Luke said land available for agricultural production is limited. “Farmland per person is decreasing — so to break even we have to increase production per acre. People eat more and eat better.”

Much of developing countries’ new food demand is for meat. “More meat means more feedgrain production,” Luke said. “The United States, Europe, China, India and Brazil are increasing food consumption. If the increase were just from the United States and Europe, we would see less pressure on production.”

But China, India and other developing countries are experiencing unprecedented growth and improved incomes. Consequently, stocks of rice, wheat and corn are “at an all-time low. We’ve seen dramatic change in the last 12 to 16 months,” Luke said.

Tight commodity supplies have been stretched even thinner with drought, flooding, hail and other natural disasters across the globe.

As commodity supplies become tighter the controversy over fuel versus food intensifies. “But it is not as significant as we supposed,” Luke said. “Biofuels are here to stay. Brazil has increased biofuel consumption. China is not there yet and Europe is lagging some.”

He said interest in renewable fuels will increase over the next five years making it necessary to balance food and fuel. Commodity price increases have also affected food supplies and caught the ag manufacturing industry by surprise.

“The increase over the past six months was not expected,” Luke said. “The industry ran out of materials. Fungicide supplies, for instance, have been tight, and at current prices, fungicide on wheat is a great investment.”

He said the industry would gear up to meet the growing demand. “At $10 a bushel, farmers are more interested. An additional bushel of wheat pays for a fungicide application.”

He said industry was caught “flat-footed, more interested in controlling inventory. Now we’re wondering if we can make enough.

“We have to increase yields,” Luke said. “Some CRP land will come out for production, but some acres never will. We have to increase productivity through technology.” He said drought tolerance will be a key. “Monsanto, Bayer, Syngenta and others are working on it. We have an exciting time ahead of us in the ag industry. Suddenly, ag is cool.”


TAGS: Management
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