Future Food Production Systems Why Intensive Ag?

How intensive agriculture meets a growing global demand for food

Kelly Zering, PhD

Associate Professor and Extension Specialist

Dept. of Agricultural and Resource Economics

North Carolina State University

Global Meat Quantity Demanded increases by 100% by 2050 (e.g. FAO 2006 Livestock’s Long Shadow) Similar estimates for milk and eggs Quantity demanded of all food + 70%

1. The Challenge

Global feed demand for grain projected to increase by one billion tonnes per year between 2000 and 2030 (FAO 2006) 2010/2011 global grain production was 2.2 billion metric tons including 1.1 billion of coarse grains, 0.65 billion of wheat, and 0.45 billion of rice. US produced 0.4 billion. (WAOB) Current grain used for feed 0.76 billion MT => 133% increase in 30 years

The Challenge

1. The Challenge

Replicate in the next few decades all the increases in food production

that have been achieved in the history of the planet

Global Population is expected to grow from 7 billion now to 9.1 billion by 2050 (+30%) (e.g. FAO 2006 Livestock’s Long Shadow)

Global Drivers

????? How does 30% population growth result in 70 to 100% more food demanded ?

Global per capita GDP (income) is predicted to grow by 153% by 2050 (e.g. FAO 2006 World Agriculture Towards 2030/2050: Interim Report)

World Bank study predicted that the number of people in the middle class globally will rise by 167% by 2030 (Bussolo et al. 2008).

Source: USDA Agricultural Projections to 2020, WAOB 2011

Source: FAO, 2009. State of Food and Agriculture 2009

People eat more meat milk and eggs as income rises (veggies and fruit too).

Missing from these projections: What will happen to the prices of meat, milk, eggs, other food, feed grains, … ? The answer affects the standard of living …. of the poor, and of people in slower growing economies (like us).

Source: USDA Agricultural Projections to 2020, WAOB 2011

Do it with higher priced resources! Quantity demanded is also increasing for other goods and services and the resources that go into them and into agriculture and food. In the absence of increased supplies, increased demand results in higher prices for inputs.

Adding to The Challenge

Do it with declining resources! Supplies of some resources are fixed and some are declining: - Peak oil ? More expensive reserves (shale oil, oil sands, deepwater wells,… - Peak phosphorus ? - Peak coal ? - Arable land converted to other use - Fresh water ? Declining aquifers, urban demand, climate change and drought risk,…

Adding to The Challenge

Do it with greater demand for environmental protection and protection of public health? As income rises, so does demand for environmental protection and protection of public health. Regulations are constantly being tightened: water quality, air quality, pathogen control, antibiotic resistance, odor standards, … Demand for environmental services may also increase (ecosystem protection, wildlife habitat, aesthetics, recreation, wetlands for drainage control, urban waste utilization, ….).

Adding to The Challenge

Do it with greater social standards constraining production methods - rural community protection - family farm - animal welfare - organic - locavore, …

Adding to The Challenge

More stringent constraints = Use of more resources and/or use of more expensive resources per unit produced = Higher costs Higher Costs = Higher Prices (eventually) = Reduced consumption = Reduced Consumer Welfare

Adding to The Challenge

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Biodiesel

Undifferentiated

Advanced

Conventional

U.S. Renewable Fuel Standard (EISA 2007) (billion gallons per year)

Adding to The Challenge

Do it With Increasing Renewable energy production

US corn use for ethanol to exceed feed use in 2012 Net of DGS, more than 20 million acres diverted of ~ 90 million in corn Similar land diversion worldwide for renewable fuels

Do it with aging and overloaded infrastructure

Ports, railways, highways, pipelines, electric grid, telecommunications, water reservoirs, water treatment, waste treatment, grain handling, food processing storage and distribution, ……… Are they being expanded to accommodate the increasing demand volume? Or are they becoming bottlenecks? Sources of increased costs and risks?

Adding to The Challenge

The Reverend Thomas Robert Malthus (13 February 1766 – 23 December 1834)

was a British scholar, influential in political economy and demography

Sources: Wikipedia, Concise Encyclopedia of Economics

“Noting that while food production tends to increase arithmetically, population tends to increase naturally at a (faster) geometric rate, Malthus argued that it is no surprise that people thus choose to reduce (or “check”) population growth. People can increase food production, Malthus thought, only by slow, difficult methods such as reclaiming unused land or intensive farming; but they can check population growth more effectively by …or, in more extreme circumstances,...tolerating vicious social diseases or impoverished living conditions, warfare, or even infanticide. “ Concise Encyclopedia of Economics

2. To meet the challenge

Primitive/Settler/Empire Solution: Use more land (or take somebody else’s) …. Not much left … Clearing forest is a major source of GHGs … and is viewed as a major loss of Ecological value

2. To meet the challenge

19th and 20th centuries/Industrializing Solution: Intensify (mitigate natural deficiencies that limit production)

Use more: water fertilizer chemicals machinery fuel animal housing balanced feeds animal husbandry skills smart controls precision management: production, marketing, finance, risk, labor, environment, Exploit economies of size and scale Exploit economies of integration (to the extent that marginal revenue = marginal cost)

2. To meet the challenge

Intensify (continued) Build infrastructure - High percentage of food is wasted - Add refrigeration, transport, storage, distribution, electric supply, markets, … in developing countries - Expand capacity in developed countries: US barge, rail, port capacity maxed out for exporting Midwest crops? Increasing basis source-to-port ? Intensification may only be an option for land and agriculture in developing countries (developed have already intensified)

2. To meet the challenge

Developed/ industrial and post-industrial/ land grant system/ Creating and innovating: - Invest in R&D and education to improve productivity. - Productivity = quantity of product(s) from a fixed bundle of inputs or resources. Example: produce more corn on the same acre of land with the same amounts of fertilizer, chemicals, water, machinery, labor, management, seed, etc. - Total Factor Productivity Index measures changes in this type of productivity

2. To meet the challenge

Developed/ industrial and post-industrial/ land grant system/ Creating and innovating: Example 2: Produce more lean pork with the same quantity of housing, feed, breeding stock, vet services & medications, supplies, fuel and electric, etc. Employ better: genetics, feed ingredients, feed formulation, chemicals, use of land and water, medications, machines and equipment, housing, manure management, fertilizers, precision, smarter controls, coordination and management, smarter labor, better infrastructure.

Norman Ernest Borlaug (March 25, 1914 – September 12, 2009) was an American agronomist, humanitarian, and Nobel laureate who has been called "the father of the Green Revolution

Borlaug led the introduction of these high-yielding varieties combined with modern agricultural production techniques to Mexico, Pakistan, and India. As a result, Mexico became a net exporter of wheat by 1963. Between 1965 and 1970, wheat yields nearly doubled in Pakistan and India, greatly improving the food security in those nations. These collective increases in yield have been labeled the Green Revolution, and Borlaug is often credited with saving over a billion people worldwide from starvation.

Source: Wikipedia

Research and Development and Comparative Advantage

Sustained investments in R&D and education have contributed to steady increases in productivity of U.S. crop and animal agriculture, particularly since World War II. (e.g. Alston et al. 2008, Fix 2007, Havenstein et al., 2003, CAST 2011.) Can those results be duplicated over the next few decades?

2. To meet the challenge

Developed/ industrial and post-industrial/ land grant system/ Creating and innovating:

The US system of integrated public and private research, education, and extension is the least successful system for meeting the challenge,

… except for all the rest.

It’s what allowed us to rise above subsistence and build the middle class

Generates more profit for most participants in competition with other systems

Allows people to specialize in their knowledge and work in attractive

21st century jobs

Creates fewer environmental emissions per unit product

than other systems

Uses less of scarce resources per unit product than other systems

Provides greater affordable food safety

than other systems

Provides an ever widening variety of familiar reliable dining choices across the

country

Provides the greatest rewards for ingenuity and innovation and the

greatest capacity for rapid deployment of improvements

Is the embodiment of continuous intelligent human striving for producing greater social value

from fewer resources

Is the best and probably only option for meeting the challenge of preserving US citizens’ access to abundant affordable food and preserving environmental quality

in the face of doubling global demand and diminishing

resources.