A confluence of climate change, rising prosperity, and changing diets has led to agricultural commodity spikes in the first decade of the 21st century. The most severely affected commodities are large-field grain crops such as wheat, rice, corn, and soybean. Such price pressures only reinforce concerns around whether global agricultural production can keep up with the rising demand going forward. Our analysis shows that if the demand and production continue along trends seen in past four decades, there will be a global shortfall of wheat, rice, and soybeans by 2030.
Across these crops, the timelines to systemic global shortage are quite different, and with very different levers to stay in front of the problem. Transgenic C4 wheat presents the best hope for yield improvement and can help close the gap between supply and demand up to 2040. However, regulations on transgenic crops may hinder this potential. In concert with precision agriculture solutions which integrate of soil, crop, and weather data with agronomic algorithms to increase the yield, supply can stay ahead of demand beyond 2045, while also growing the farmer’s bottom line and profitability.
In contrast, even with adoption of advanced transgenics and precision agriculture, global supply of soybeans will not keep up with the demand by 2030. There is simply less room for yield improvement with soybean crop modification, given that 80% of global soybean is already transgenic. Given that 70% of the soybeans produced today are used as animal and aquaculture feed, this shortfall and resultant spike in prices will increase the pressure on animal and aquaculture feed conversion efficiency, as well as the search for alternative feeds. This includes the use of alternative proteins for animal feed such as cassava leaves for herbivores, and duckweed and algae for poultry, pigs, and fish. Expect to see greater pressure on farmers to boost feed conversion efficiency, which means short-term opportunities for metabolism boosters and animal probiotics, and long-term opportunities for transgenic breeds.
The challenges and opportunities arising from food availability, regulatory barriers and population distribution will create a rich but complex landscape for governments and technology developers alike. Populous countries such as India, China and Indonesia will have to mix aggressive modified crop technology adoption, imports and land-grab strategies in resource-rich developing countries such as Malawi and Mozambique. In contrast, The rising tide of regulatory and consumer perception barriers will be major challenges for transgenic crops in all developed countries except the United States. As a result, seed companies will increasingly use non-transgenic biotech approaches such as site directed mutagenesis to try to get around the regulations. While precision agriculture solutions will have relatively less impact on yield, these technologies will be most instrumental in improving farmers’ bottom-lines by reducing operating costs.
With food’s position as a basic Maslowian need in a constrained resource world, appropriate deployment of technology will inevitably be the savior, and sooner than many realize.
Source: Lux Research report “Combating Malthus: Technologies to Feed 9 Billion by 2050” — client registration required.