We recently invited leaders in farming, ranching and agribusiness to step back from the day-to-day work of agriculture to talk about what the future holds for U.S. producers. Experts in protein, consumer trends and geopolitics outlined the challenges agriculture will face – at home and across the globe – in the next five to 10 years. All agreed that U.S. agriculture is in an enviable position to capitalize on its strengths to expand its market presence.
“We are moving from a world in which the U.S. is the largest capital provider and the largest consumer base to one in which the U.S. is the only capital provider and the only consumer base. And that is only 15 years away,” said Peter Zeihan, a geopolitical strategist, forecaster and author of “The Accidental Super Power.”
Brett Stuart, an economist and CEO of Global AgriTrends, observed that “the opportunities have never been better.”
Following are some of the thought-provoking views shared by the guest presenters at our 2015 Agribusiness Finance Executive Summit in Omaha as they analyzed trends shaping the future of U.S. agriculture:
- Demand for agriculture products in the next 15 years will be driven by the world’s growing middle class, projected to increase to 5 billion by 2030. This growth will be concentrated in urban areas, where people use their wealth to buy better and more food, particularly in the area of protein, Stuart said. Sector-specific projections:
Poultry will overtake pork as the world’s No. 1 source of protein by 2020. Poultry consumption is being driven by population gains in southeast Asia and Africa.
Aquaculture surpassed beef for the first time last year in world consumption. Tilapia produced in China dominates this market. Aquaculture will continue to thrive, competing with other protein sectors for feed.
Beef production hasn’t increased in seven years, even as the world added 550 million people and GDP rose by $14 trillion. The resulting record-high prices are projected to peak in 2015 before returning over the next five years to pre-boom years – about $1.70 per pound by 2020.
- As countries struggle to meet demand, more will choose to import cheaper, more efficiently produced food. Half of Japan’s calories come from imported food compared to 1.5 percent in China. It will take time, but eventually China’s self-sufficiency experiment will fail, Stuart said, and the market will open to outside food producers.
- Southeast Asia and Mexico will be growth markets for U.S. ag producers, Zeihan said. Southeast Asia has a young population that is urbanizing at three to four times the rate of rest of the world. With little to no food production of its own, the region is filled with hungry people friendly to the U.S.
Mexico will be the world’s fastest growing economy for the next 50 years. Only Afghanistan has worse topography, meaning Mexico has no choice but to import food to feed its people.
- Europe’s anti-GMO policies will erode, giving way to a market open to both GMO and GMO-free products, Stuart said. Already, Europe is loosening some anti-GMO laws to ensure its protein producers have access to feed.
- Aging populations and other market factors will cut into Canada’s and Brazil’s global competitiveness, leaving U.S. ag to dominate trade, according to Zeihan. U.S. producers, however, would be wise to keep an eye on Argentina. With the right government policies, Argentina could use its labor pool and waterways to become a market force.
View the full presentation by Brett Stuart, CEO of GlobalTrends:
View the full presentation by Peter Zeihan, author of “The Accidental Super Power”: