WASHINGTON - A new research has indicated that despite certain uncertainties, ‘up’ is precisely the direction an Iowa State researcher believes agriculture is headed for at least the next 10 years.
Wally Huffman, professor in agricultural economics and Charles F. Curtiss Distinguished Professor in Agriculture and Life Sciences, predicts that supply will go up, demand will go up, and real prices of grain and oilseeds also will go up.
“I’m very optimistic about the next 10 years,” said Huffman.
Huffman presented his research to the Organization for Economic Co-operation and Development in Paris, France, last month.
An important part of Huffman’s study was the long-term trend of corn and soybean yields in Iowa, wheat in Kansas and France, rice in Japan and potatoes in the Netherlands. Huffman examined the trends and then made projections about the next decade.
The optimism starts with the producers.
“Prices right now for corn and soybeans are up about 50 percent relative to two years ago, so those are relatively good prices,” said Huffman. “That’s good news for grain producers,” he added.
The impact that the rising demand for biofuels will have on the market for agricultural products is not entirely clear, but grain and oilseed prices will generally be higher than they would be without biofuels.
“Overall, biofuels are probably a good thing for farmers,” said Huffman. “However, there will be more erratic variation in grain and oilseed prices than there would be without biofuels,” he added.
According to Huffman, while biofuels are pushing demand for grain and oilseeds up, the long-term trend in supply of grain and oilseeds is due to new technologies that are being developed by the private sector and marketed to farmers.
“Supply is going up, and demand is going up. I think they will grow at a similar pace,” he said.
“There will be occasional spikes due to bad weather and abrupt restriction in crude oil production, but prices will come down. When they do, they will come down to similar levels to what they are now in real terms, and those are pretty good prices,” he added.
Huffman also predicts that the rate of increase in yields for corn and soybeans in major production areas will rise much faster than it has in the past 50 years.
“From 2010 to 2019, corn yields are going to increase quite substantially, maybe at four to six bushels, per acre, per year,” he said. (ANI)
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