Article

by Carey Gillam

KANSAS CITY, Missouri (Reuters) - For decades, U.S. farmers have helped feed the world by sowing some of the most versatile cropland, adjusting each year to grow a bit more of this and less of that, to replenish those crops in greatest shortage.

This year, however, even with farmers planting nearly every acre of arable land, it won’t be enough to tame prices and replenish stocks.

The price of almost every major crop is at or near record highs; competition -- between farmers and between crops -- has never been more intense; and Midwestern property values have surged.

With arable land near its max for the world’s top exporter, productivity becomes paramount. Whether it can improve quickly enough to meet rising global demand is hotly debated.

On the front lines of the effort is corn, a key ingredient for everything from livestock feed to food, food additives and fuel. The United States grows about 40 percent of the world’s supply, and is using a growing share to make ethanol.

Thanks to biotechnology, better use of fertilizer, water and technology, corn has already seen sizable improvements in yields -- the number of bushels from every acre sown.

A record high yield of 164.7 bushels per acre was set in 2009. Last year’s average yield of 153 bushels per acre is up from about 137 in 2000, 119 in 1990 and 91 in 1980.

“We have some pretty significant increases going on,” said University of Wisconsin corn agronomist Joseph Lauer. “There is no indication that it is slowing down or even plateauing. It is a unique story. No other crops have seen the yield increases corn has.”

But even though the gains have been impressive, the rate of yield growth has slowed, and some agronomists are worried about the outlook.

Seed company Monsanto helped push yields sharply higher over the past decade by introducing novel combinations of germplasm groups from independent seed companies it consolidated and integrated, said University of Illinois corn genomics expert Stephen Moose.

That led to a “quantum leap” in hybrid vigor, he said, one that won’t be easily repeated.

“Most of the benefit from these new combinations has been realized, so I am not sure we will see a similar jump in the next decade,” he said.

Additionally, Moose said corn already is typically grown on the best acreage available. Shifting new, less productive, land to corn will limit yield increases.

Top executives, government officials and experts will address the industry’s opportunities and challenges at the Reuters Global agriculture and food industry summit in Chicago, London and Singapore March 14 through 16. Reuters will offer readers a full range of exclusive interviews and stories.

KEEPING PACE WITH FOOD DEMAND

Food demand will grow with the world population, forecast to rise to 9 billion in 2050 from almost 7 billion now. Food prices have risen to record highs and show few signs of subsiding soon.

“As more people populate the world we’re going to have to feed them,” said Jack Scoville, an analyst with Price Futures Group brokerage firm.

Every bushel helps.

Against this year’s projected acreage of 92 million acres planted to corn, each additional bushel per acre of corn would increase the crop by 2.3 million tonnes.

The Department of Agriculture this month issued long-term projections for a yield gain of 9.3 percent for corn over the next decade, with farmers expected to see an average of 180 bushels per acre by 2020/21.

Some companies see even bigger gains ahead.

Three years ago Monsanto publicly pledged to double yields in corn, soybeans and cotton against a year 2000 base by 2030. For U.S. corn, that means over 273 bushels per acre.

More precise plant breeding techniques are contributing an average of more than 2 bushels/acre year-over-year in Monsanto seed varieties, said Monsanto’s David Fischhoff, who oversees technology strategy and development. He expects yields will improve at a faster rate.

Competitor DuPont says some customers routinely report 200 bushels per acre, and a few can harvest 300 bushels, nearly double the national average.

“I‘m very optimistic of the growth of yield potential,” said Roy Luedtke, a corn research director for DuPont’s Pioneer Hi-Bred, which sells corn, soybean and other crop seeds.

Both companies have new types of corn headed to the market this year and next aimed at minimizing yield loss in drought, as well as other con seeds to minimize losses from pests, disease and other problems farmers commonly encounter.

Dow AgroSciences, a unit of Dow Chemical and the Swiss company Syngenta, is also pushing higher yields. Syngenta last month received regulatory approval for corn genetically modified to boost ethanol productivity.

BULLS EYE ON NEW BUSHELS

Myriad factors play into how much corn will be harvested from U.S. farmland. Weather patterns, improvements in corn seed, breeding practices that speed identification of superior germplasm, and improvements in farmland management practices, fertilizer, fungicides and other inputs all play a role.

University of Wisconsin’s Lauer noted the rate of improvement since the advent of biotech seed development in the mid-1990s has improved to about 2 bushels per acre, a far cry from the 6 bushels needed to reach the 300 bushel target in the next two decades.

To get there, farmers may have to use more fertilizer and water, which have their own supply and demand concerns.

For central Iowa farmer Roscoe Eggers, it’s a guessing game, but he’s optimistic. When he started growing corn 40 years ago, yields of 100 bushels an acre were considered strong. Last harvest his farm brought in about 200 bushels per acre.

But 300 bushels?

“I hope that it’s possible,” he said. “There are a lot of mouths to feed.”