Quint entered the grain marketing business fresh out of college in 1971. Posted at varied locations, he traded in corn, wheat, and soybeans.
Progress Has Come in Jerks and Despite Setbacks
A little over 200 hundred years ago, Thomas Malthus, an English cleric, famously warned that the expanding population of the world could exceed the global food supply. He saw starvation, war, and pestilence rising as a result. But he was wrong, at least, as far as we can tell a couple of centuries later.
There have been scary times, admittedly, when Malthusian catastrophe seemed imminent. There have also been spectacular wars fought at tremendous cost of life from time to time. Episodes of mass starvation have occurred, here and there, as well. These have brought his pessimism back to life among his followers and perhaps a few detractors as well in just about every instance. However, global food production has managed to stay just ahead of population growth since his 1798 treatise, An Essay on the Principle of Population, was published.
See How Far We've Come
Look at some official statistics regarding food supply. There are grains, oilseeds, root crops, tree crops, and a few other categories to consider. So, to keep it simple, I’ll just focus on the grain numbers here. These include wheat, rice, corn, oats, barley, grain sorghum, and other additional grain-type crops. According to the World Agricultural Outlook Board of the USDA, since 1961, world grain consumption has tripled. But so has world grain production. Both were estimated at about 800 million tons for the year of 1961—close to an exact balance. USDA/WAOB is estimating total world grain production at about 2,554 million tons while forecasting global grain consumption will be about 2,572 million tons, or almost 20 million tons out of balance.
Since 1961, this data series reveals that annual growth in grain demand has averaged about 31 million tons per year. But it also shows grain production increased by an average of about 31 million tons. A smooth offset? Hardly. In the second graph, I have calculated years that produced surplus grain and years that had shortfalls. Since 1961, there have been only six years when grain consumption has decreased year-over-year. But in 22 seasons, production fell down from the year before. That has made for some frantic periods of price instability. These appear to have been interspersed with interludes of price stagnation. I see a sort of alternating pattern. And yet, production has caught up with consumption, by and by.
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Mother Nature Steers the Uneven Pattern of Growth
Another observation: the blue bars in the graph (denoting surplus years) commonly show up in “bunches” of 3- and 4-year duration. The red bars (denoting deficit seasons) appear more frequently as solitary events. Only once in the past several years has a time of scarcity persisted as long as four years. I imagine the nature of Mother Nature is at least partially responsible for this. Under what we call “normal” weather conditions, crop yields are good. In North America, it’s been my observation that we get “normal” weather more often than abnormal weather. I suspect that may be applicable to agricultural weather on the other continents.
There Are a Multitude of Influences On the Overall Trend
Trade policies, agricultural price support policies, acreage retirement subsidies, and other contrived influences on farmer cropping decisions might be considered, but I suspect folks soon figure out how these may be exploited or countered. So their impact is fleeting. I would put more faith in yield-positive influences such as genetic improvement and ancillary gains in fertilizer optimization, improved soil management techniques, and greater machinery efficiency.
Free Enterprise Is a Fantastic Model For Other Continents to Emulate
Land resources are not fully developed yet. Expanding the land area under cultivation is probably something Thomas Malthus and his contemporaries could not imagine. Who knew in the 1700s that the North American colonies—Canada and the USA—would emerge as the “breadbasket” of the world in future centuries? The view of Malthusians was at least a little bit “myopic” 200 years ago. True enough, Russia was the agricultural giant of their time and it was destined to stumble. But who knows today what roles South America and Africa will eventually play in terms of grain and oilseed production? It may be that the spirit of free enterprise having awakened in North America in the recent past has been spreading to fertile lands throughout the world. Optimism seems justified when considering the world’s future ability to feed expanding population, it seems to me.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2017 Quinton James