AFIA Releases Report on Future of Grains, Bioenergy, and Livestock By Kentucky Equine Research Staff · September 20, 2012
The American Feed Industry Association (AFIA) has assembled a summary of recent trends in the bioenergy, grain, feed, and livestock industries. Among its findings:
- Increases in U.S. ethanol production have pushed down gasoline prices by an average of $0.29 per gallon since January 2000. In 2011, growing ethanol production and higher crude oil prices resulted in a reduction of $1.09 per gallon.
- Higher corn prices have resulted from governmental ethanol policies. This rise has led to higher prices for animal feed and human food.
- Use of corn for ethanol production increased 623% from 2000 to 2010 in the U.S. During that period, the use of corn in animal feeds declined by more than 1.25 billion bushels, with some of the deficit made up by increased use of distillers’ grain and solubles, a major byproduct of the ethanol industry.
- If past trends in increasing corn yields continue for the next 3 to 7 years, serious corn shortages should be avoided and supplies should be adequate to meet feed industry demands. Use of corn for ethanol will increase somewhat more slowly until 2015 when the governmental mandate for ethanol production will reach its goal. However, drought or other factors could change this prediction, producing spikes in feed prices.
- The global situation after 2020 will be influenced by the growth of China’s demand for corn, which will increase with a swelling population and a higher standard of living. China’s yield of corn is 56% of U.S. yield per acre. Demand for imported corn may be eased as Chinese farmers adopt new corn strains and improve water management and weed control technology.
- Looking further ahead, the world population will add two billion more people by 2050. Most of the growth will be in developing countries with severely limited agricultural land; industrialized countries may decrease somewhat in population.
- As populations of developing nations raise their standard of living, the demand for corn will be less for immediate human consumption and more for feeding livestock.
- Though some more land may be used for crop production, the majority of increased demand will be met by greater yields. Crop research will maintain an important role. New problems will involve fertilizer production, protection of ground and surface water, and supply of agricultural chemicals. The role of biofuels is uncertain in this period.
- Finally, uncertain weather patterns may have strong and unpredictable impacts on agricultural. Carbon fertilization, a phenomenon in which higher levels of atmospheric carbon dioxide boost the growth of some crops, may lead to a rebalance in the importance of corn as opposed to other grains that could become more economical producers.