Agriculture Prepares for Century Twenty-One

The year 1999 marks the end of the current century. A new millenium lies beyond. The pace of change in agricultural technology has accelerated. Here are some thoughts on what’s ahead:

• Biotechnology will continue to dominate changes in cropping technology, especially for corn. Expect to hear more about new sources of resistance (beyond Bt) to corn borer. New genetic resistance to corn rootworm will also be good news, especially since its introduction to Ontario should coincide with the arrival of new rootworm strains from the U.S. Midwest which will infest corn even when grown in rotations with soybeans and other crops.

• Roundup- and Liberty-resistant corn can be expected to increase rapidly in popularity, even though growth of the former may be tempered by a desire to use Roundup to kill volunteer corn growing in Roundup Ready soybean fields. Expanded use of this technology should mean a substantial decline in traditional crop herbicides use and prices – a big benefit for crop farmers, even after considering the price of herbicide-resistant seed.

• The cost of new corn hybrids will likely continue to climb, at least for a few years, until competition limits growth. Expect to see less dominance in the marketplace by single seed companies or biotechnology companies, even though their total number will be reduced. Many of the new breakthroughs – especially those based on innovative thinking rather than mass screening – will be coming from smaller entrepreneurial companies. It’s been this way for many years in the farm machinery business and in computing/ information technology. Expect the same with biotechnology, especially with declining costs for gene insertion.

• Public attention to agricultural technology will continue to grow, as will the activities of anti-biotechnology activists. This may mean more pressure for government control, even though the Government of Canada has established a good track record for management in this area. However, over the longer term (10 years?) biotechnology manipulation will have been established as common practice – like pesticide use – with a continuing significant core of consumers and activists who oppose it.

• Health has become the number-one issue of a majority of Canadians. And, as the number of older, wealthier Canadians grows, the demand for more healthy food products will increase too. This will mean many opportunities and market demands, including the need for better quality control, and reduced levels of natural toxins, pathogens and pesticide residues. It will mean increased pressure to improve both production technology and testing and monitoring procedures. The demand for new, improved products with superior biochemical composition, created by biotechnology or other means, will become a dominant factor in agri-food research and production.

• There will be increase opportunity for those growing food by organic methods to supply those who want “traditional” food – even though it is unlikely to be any safer to health or environment than its mainstream counterpart. However, organic agriculture is likely to remain a niche market, though potentially very profitable for those prepared to provide the management and labour required. Definitions of “organic” can be expected to evolve, and to differ from supplier to supplier, despite government and industry efforts for standardization.

• There will be major opportunity for those who are prepared to supply quality-guaranteed agricultural and food products, in quantity – and in consistent supply, 52 weeks per year. This will prove difficult for most farmers. However, don’t look for large corporate farms to dominate, especially in crop production, because of the management needed and relatively low returns to labour and management. The “solution” is likely to come in two ways – contract production where the control is maintained by others (this is already common for producers of hogs, poultry, sugar beets, seed corn, processing vegetables, and other farm produce) – or cooperative ventures where a group of growers contract with food manufacturers or retailers to supply a quality-assured product on a continuing basis. There are also good examples of the latter; while they are more difficult to manage, they offer the opportunity for greater control by producers (though not unlimited, because the customer is still “king”) – and the potential for more profit – but also the need for more sophisticated marketing skills. The emphasis will also be on just-in-time delivery.

• Expect no let up in the public demand for improved environmental integrity. This can represent a threat to those wanting the status quo, and an opportunity for those with new ideas about how to do things better. While the public may not pay more for food grown in an environmentally superior manner, the produce grown this way is likely to be more marketable at the same price – and less subject to further governmental regulation. A growing rural population of non-farmers will also place increased demands on the environmental integrity of farming practices, not withstanding the limited protection provided by “right to farm” legislation.

• In the case of Ontario corn, the greatest growth in market demand in the 1990s has been in food and industrial processing. Although feed for livestock and poultry will remain an important market, especially for farm-fed grain, the trend of the 1990s can be expected to continue. The market for fuel ethanol should continue to grow, driven by customer demand for improved environmental sustainability. However, there are even bigger opportunities for growth in other non-food products, e.g., bioplastics.

• The tendency of consumers to “graze” a higher portion of their diet – i.e., eat snack food between regular meals – also represents opportunity, especially for food which is convenient, nutritional, and tastes good. Corn is already a dominant component of snack foods. There is lots of scope for improvement, and market growth.

• Though the international market for agriculture and food will likely continue to grow, we are uncertain about the importance of this market, especially for producers of traditional, bulk, standard-grade farm commodities. Sure, the world population continues to grow, but so does the human ability to produce food, especially in countries with growing consumer affluence. India, once a major food importer, is now largely self sufficient, even though it is the globe’s second most populous country. China, with more than a billion people, imports a relatively minute portion of food needs, and is a major corn exporter. And when (or if) countries of the former Soviet Union, like the Ukraine, get their act together, they could become major food exporters. The demand for food imports by countries such as Japan will continue, but won’t necessarily grow. Not withstanding the expected growth in demand for meat protein, the best international market opportunities will be high-quality niches – i.e., sales to those willing to pay top prices for top, guaranteed quality. Quality assurance is the best means to compete for high-end markets in the rest of the world, just as at home.

• Though it’s expected that trade liberalization will generally increase, there are lots of clouds shading the millenium round of trade negotiations, beginning in late 1999 – especially for agriculture and food. The U.S. president’s having trouble securing the trade authority which he needs from Congress. Anti-trade forces are gaining strength in many countries, including Canada. The European Union continues to prevent the importation of new food products, even when they meet all international quality standards. And pressure grows to restrict trade based on labour and environmental considerations. This is a mine field. The best positive feature is improving international communications and the growing tendency of citizens, especially in the developed world, to think globally rather than nationally.

• The pressure to cut costs, even while improving quality and product consistency, will continue for Canadian farmers. This means continued research on means to reduce costs and input usage – less tillage and fuel consumption, more efficient fertilizer and manure usage,
less pesticide usage, lower labour costs per unit of product produced, and more. The real price of feed-grade corn has trended downwards since the 1940s, or earlier. This trend will continue.

• There is also opportunity to improve corn yields. Improved pest management will help, but there is untapped genetic potential. Crop physiologists have estimated the corn yield potential for southern Ontario lies in the range of 500- to 1000-bushels per acre. We have a long way to go. The world of biotechnology research may gradually evolve to focus on yield potential per se (as compared to pest and pesticide resistance and nutritional composition) but this research will not be easy because there are many genes involved in yield creation and their interactions are not well understood. Nevertheless, corn yield potential will continue to grow. Expect to see the world’s first 500 bu/acre crop some time during the next decade, or two.

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