Producers who are still growing wheat 40 years from now had better be prepared to boost their output substantially, if a forecast by U.S. Wheat Associates comes true.
USWA president Alan Tracy said in a recent industry newsletter that to meet growing global demand based on population alone, world wheat production would have to increase by 40 percent to 900 million tonnes by 2050.
Wheat production in 2009-10 is estimated by the International Grains Council to be 677 million tonnes.
Wheat production has been relatively flat the last five years, as farmers shifted acres into more profitable crops like corn and soybeans.
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“Higher yields offset some of this loss so wheat production is basically stable, but stable production will be inadequate to meet future demand,” said Tracy.
World wheat trade has increased by 250 percent since 1982 in lesser developed countries.
Tracy said world trade would have to more than double by 2050 to at least 250 million tonnes from 127 million tonnes in 2009-10.
“We’ll see more competition among buyers, more short supply years and even more price volatility,” he told an international conference of millers in Cape Town, South Africa.
Bruce Burnett, manager of market analysis for the Canadian Wheat Board, laughed when asked for his market outlook for 2050.
“On the positive side, a 50 year forecast I could probably get away with,” he said.
Burnett was willing to offer up one and five year outlooks, saying things are “quite positive” for all commodities in the coming year.
“The theme for 2011 is that there is good demand for all the commodities we grow on the Prairies,” he said, adding various commodities will have to compete for acreage.
“There will be a battle for acreage and right now it looks like oilseeds, canola and flax will be the winner,” he said, adding a lot will depend on developments with the South American crop over the next three to six weeks.
The competition among crops should result in strong prices as various commodities try to buy farmers’ acreage.
That strong demand for commodities will remain in place for at least the next five years, said Burnett.
Developing countries such as China, India and those in Southeast Asia and Africa have been less affected by the economic downturn of the past three years than were the developed, industrialized countries and will remain in a good position to buy commodities, including grains and oilseeds.
Many countries produce wheat domestically and then import to top up production, resulting in a trade that has been marked by slow but steady growth, largely reflecting population growth.
There will be more competition among exporters, with newcomers like Russia, Ukraine and Kazakhstan remaining important players.
Demographics will affect longer-term demand because an aging population will have different dietary demands and eat less overall.
Similarly, increasing numbers of immigrants will lead to a change in demand for different crops, such as lentils and other pulses.
Burnett said the demand for feed grains for domestic livestock production is difficult to predict.
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