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Global Corn Demand to Grow 2.2% a Year

Global Corn Demand to Grow 2.2% a Year thumbnail

Growing demand for food in developing countries will continue to be a major driver of demand for corn and soybeans over next past decade, according to a new USDA report released last week called Long-Term Prospects for Agriculture Reflect Growing Demand for Food, Fiber, and Fuel.


Average Annual Growth in Global Demand

  • Oilseed meals 2.2%
  • Beef, pork, poultry 2.2%
  • Corn 1.8%
  • Coarse grains 1.5%
  • Rice 1.0%
  • Wheat 0.9%

Source: USDA-Economic Research Service

“Economic growth in developing countries is especially important for agriculture because food consumption and feed use are particularly responsive to income growth in those countries,” the report notes. “As incomes rise in developing countries, consumers tend to diversify their diets, moving away from traditional staple foods, such as wheat and rice, and increasing their consumption of such foods as meat, dairy products, and vegetable oils.”

The authors of the report, Paul Westcott and Ronald Trostle, note that annual average global consumption gains over the next decade will be higher for meats (2.2%), corn (2.2%), and coarse grains (1.5%) than for wheat (0.9%) and rice (1%).


Population soars in developing world
World population surpassed 7 billion in March 2012, according to the U.S. Census Bureau. Over the next decade, global population gains will probably slow due to declining birth rates, but population growth will remain higher in the developing world, compared with developed countries. “As a consequence, the developing-country share of the world’s population is expected to increase to 82% by 2021, up from 79% in 2000,” the report notes.

Africa and the Middle East combined are expected to see some of the strongest gains in food demand. “Not only is import growth for staple food commodities, such as wheat and rice, expected to continue to be strong, but the region’s rising demand for meat is projected to lead to increasing imports of both poultry and beef as well as imports of feed grains and protein meals for a growing domestic meat production sector,” note the authors.


U.S. markets changing
Two decades ago, Japan and the European Union were the two leading destinations for U.S. agricultural exports. Today China and Mexico are two of the United States’ three largest markets.

Over the next 10 years, the authors note that China’s imports of corn are expected to grow sharply and account for almost half the overall growth in world corn trade. China will have an even bigger impact on world soybean trade over the next decade, eventually accounting for more than 80% of global import growth.

“Projected increases in Mexican meat demand over the next decade will bring greater meat imports as well as expansion of domestic livestock production and increased imports of feedstuffs,” says the report. “Mexico is second only to China in projected growth for corn imports over the next 10 years.”

A continued decline in the value of the U.S. dollar will keep exports booming. “The continuing depreciation is part of a global rebalancing of trade and financial markets in the aftermath of the global financial crisis and recession,” say the authors. U.S. producers, however, will also see growing competition from South America and will lose world market share in soybeans to Brazil.

Even so, prices are expected to remain at historically high levels. For many years, the authors note that inflation-adjusted, or real, prices declined. From 1979 to 2001, real prices for corn, wheat, and soybeans fell an average of 4.4 to 5% per year. In 2002, however, real prices for corn, wheat, and soybeans began to rise. By 2009, prices of these crops were 45% higher for corn, 49% higher for wheat, and 81% higher for soybeans, compared with 2001 prices. Real prices could begin to decline, though, once world stocks are rebuilt.


5 Comments on "Global Corn Demand to Grow 2.2% a Year"

  1. MrEnergyCzar on Wed, 26th Sep 2012 11:41 pm 

    What about the required corn ethanol fuel production requirements in the states?


  2. BillT on Thu, 27th Sep 2012 12:09 am 

    Big Ag, dreaming of an unlimited future … if only there was more fertile soil left somewhere in the world and they owned it. lol.

    The next few decades are going to see the largest number of famine and disease caused deaths in history. The Horsemen are riding even now. What happens

    IF Big Ag suddenly cannot produce new zombie seed some year, the whole world will be starving? After all, genetically modified seeds DO NOT reproduce. You have to buy them new EVERY year. You cannot save last years seed and plant them for this years crop. Try it with that pack of seeds from the local store. Odds are, it is a zombie seed and if you try to replant it next year, they will not sprout, or they will be some hybrid that does not fruit.

  3. ken Nohe on Thu, 27th Sep 2012 12:44 am 

    Well then the future is like the present, just a bigger version of it? What a joke. The economists who write these things have no knowledge whatsoever. Just useless PhD studying arcane subjects with no relevance to the real world to speak of.

    Mao was right, at least for economists. All these people should be sent to work on a farm for 10 years, then be rehabilitated. Some of them would be better persons, all would be more knowledgeable.

  4. Sharpie on Thu, 27th Sep 2012 4:07 am 

    Of course demand will grow (just like that for oil), but can supply keep pace? That’s the real question.

  5. Kenz300 on Thu, 27th Sep 2012 6:01 pm 

    Never ending population growth is straining all the worlds resources.

    Maybe we should concentrate on slowing population growth.

    Every country should develop a plan to balance its population growth with its resources, food, water, energy and jobs. Those that do not will be exporting their people and their problems.

    Access to family planning services needs to be available to all that want it.

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