Minnesota Farmers Union

(April 8, 2011) - Current projections hold that the population of the world will increase from 6.9 billion in early 2011 to somewhere between 9.0 and 9.3 billion by 2050, an increase of over 30 percent. When that increase is coupled with increased prosperity in developing countries and the desire for a diet that includes more meat, it is projected that the production of agricultural crops will need to increase by 70 to 100 percent.

The question facing policy makers is what it takes to accomplish that amount of increase over the next 40 years. The multinationals that are engaged in seed research and sales argue that such an ambitious agenda will only be achieved if trade policies are liberalized and they are given free rein to sell their genetically modified seed everywhere. They also argue that farmers in the major grain exporting countries will be needed to feed the world.

Before moving forward, let us look at what has happened to grain production over the last 40 years. In 1970, the production of corn, milled rice, and wheat was 788 million tonnes. By 2010, the production of those three grains was 1.912 billion tonnes, an increase of 142 percent.

(February 11, 2011) - As we write this column, March 2011 corn futures closed at $6.87/bu., wheat at $8.53.bu., soybeans at $14.33/bu., rice at $15.80/cwt., and cotton at $1.67/lb. Compared to February 2006 those prices are stratospheric. What we are seeing is a second wave of a general price increase for commodities that began in late 2006 and saw its first peak in 2008 followed by a retrenchment.

In this column, as elsewhere, parallels have been drawn to the situation in the early 1970s when prices began to rise as the result the Soviet Union entering the international grain market after a crop failure. The subsequent increase in prices produced a wave of optimism in the farm community.

The positive outlook was bolstered when the US Secretary of Agriculture told farmers to plant fencerow to fencerow. In 1974, the World Food Conference was held in Rome at a time when over 800 million people around the world were undernourished. The conference delegates established a goal of eliminating hunger within a decade. Farmers were being told that demand for food would exceed production for the next quarter century so the statement by the Secretary seemed reasonable. It appeared that farm prices had reached a new plateau.