Article of the Day

Brazil to Boost Grain & Meat Production by 30 Percent by 2028 – Reuters

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The trade dispute between the U.S. and China is potentially setting the stage for a decade-long impact on U.S. agriculture

~ Dave Miller, Iowa Farm Bureau

Five Insights from 2018 Business Beyond Boundaries Program

We had the privilege of hosting two groups of farm and ag business professionals from Brazil the last two weeks for the 2018 version of the Agricultural Entrepreneurship Initiative‘s Business Beyond Boundaries program, one cohort in central Iowa the other in California.  The program is about developing entrepreneurial skills and behaviors and exploration of innovation in agriculture.  Thanks to the rich assortment of entrepreneurs, experts and professionals that we meet there are a number of insights each of us takes from the program.

Five of these insights include the following.

  1. Brazil is positioned for continued growth in agricultural production potential – The untapped agricultural production potential of Brazil is very significant.  The Agriculture Minister predicts 30 percent growth in grain and meat production in ten years, but that may be too small.  Double cropping potential, undeveloped land, large farm sizes, and a number of other factors give Brazil significant upside production potential.
  2. Crop specialization in the future leans toward the U.S. in corn and Brazil in soybeans – Back in the 1990s I created an econometric model of the world of agriculture supply an demand 10 years in the future.  I recall that it predicted part of the significant growth in Brazil soybean production, though it fell short of the actual growth.  It also predicted emphasis in Brazil of soybean over corn production and in opposite in the U.S.  That prediction still remains the case.  A lot depends on trade flows, but the likelihood of divergence between corn and soybean acres in the U.S. ten years from now is significant.
  3. The challenge for global agriculture is more about quality than quantity – The often-cited challenge to agriculture of feeding more than 9 billion people is less significant than about how they will want to be fed.  The world can produce a lot more food, but can it meet the expectations of an increasingly choosy and discriminating customer base?  Tomorrow’s food consumer will have expectations that in many ways cannot be met by today’s agrifood supply chains.  Particularly in the U.S., there are significant opportunities to create new, non-commodity supply chains.
  4. Agricultural technology can spread quickly, but a culture of innovation and adoption does not – There are a number of intriguing agricultural technologies that will be marketed and tested in the next period of years, some with great value others more questionable.  Effective integration and adoption of technologies may be a challenge, however.  Creating a deeper culture of experimentation across the industry will be important.
  5. Consumer and technology trends point toward a more disaggregated agriculture – Parts of agricultural supply chains have tended to be controlled by relatively small number of large firms.  Fragmenting consumer markets and technologies that empower more direct coordination and connection of consumers to agricultural producers point to a much more decentralized, fragmented, disaggregated agriculture in the future.  More on this topic will be offered in a future post.

Thank you to the many hosts and contributors to the 2018 program!

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