Global agriculture forecast

In a recent New York Times  article, reporter Matthew Saltmarsh discusses the global agriculture forecast based on a joint report from the Organization for Economic Cooperation and Development (OECD) and the United Nations Food and Agriculture Organization (FAO). The report forecasted that prices for food commodities would rise 10 to 20 percent in the next decade, compared with the previous decade, while prices for vegetable oils would be more than 30 percent higher.

The report went on to highlight the link between agricultural prices and energy costs, which can make up a substantial portion of a farmer’s overall expenses. It’s important for consumers to understand that link and to realize that as energy prices rise, farmers pay more for their fuel and fertilizer inputs. That certainly was the case last year when crude oil prices reached record levels.

On the demand side of the equation, certainly the current economic downturn has moderated demand, as the report states. Still, many factors like changing preferences, changing diets and dietary diversification will expand demand for foodstuffs such as dairy products in the next 10 years particularly in developing countries. And, with the world’s population expected to grow by at least 50 percent in the next 40 to 50 years, the demand for high-quality food will increase as well.

As the economy recovers and agriculture plays “catch up” in feeding the world’s hungry, the industry will need to re-double its efforts in maximizing agricultural output.