Agricultural News
Economist Sees Rising Food Demand
Fri, 11 Feb 2011 17:01:03 CST
J.B. Penn, chief economist with Deere & Company, credits rising incomes and changes in dietary preferences of the growing middle class population in developing countries as important drivers of demand for U.S. coarse grains. Penn told those attending the U.S. Grains Council's 2011 International Marketing Conference and Annual Membership Meeting that fast-growing world demand is keeping commodity prices high. He noted that 40 percent of the world's population now lives in countries with economies that are growing at 8 percent annually.
Penn contended that the world is undergoing a significant and sustainable shift in supply and demand. We are in the middle of a broad structural shift. People want to eat more and better. According to Penn, worldwide consumption is outpacing agricultural production, causing food prices to increase to historic highs. Pointing to Tunisia and Egypt, he said rising food costs can be a catalyst for uprising and protests to emerge over long-simmering social unrest.
Penn said agriculture's challenge is to produce twice as much food in the next 40 years with the same resources as today. He said, the link between increased productivity and increased consumption is trade. Things like trade barriers, export restrictions and tariffs cause panic in world markets. Penn added, a rules-based trading system is critical for our industry to meet world demand.
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