The old saying is, “It’s a small world.” Researchers say it’s about to get even smaller, and farmers of commodities, such as corn and soybeans, must adapt to thrive. 

In a report series called “The Big Shrink,” Terrain, a team of economic analysts working on behalf of several Farm Credit associations, is investigating how population decline may impact agriculture. Terrain predicts the global population will peak at 9.38 billion between 2065 and 2070. Some countries, such as China, have already peaked in population, according to Terrain. 

Analysts Matt Clark and Matthew Woolf say a global decline in population will compel American agriculture to shift focus from feeding the world through bulk exports, to domestic processing for value-add products in demand domestically and globally. 

“I think of the last 50 years as being all about quantity,” Woolf, specialty crop analyst with Terrain, said. “We really increased exports. We increased production. And I see the next 50 years as being about quality.”

Corn’s Head Start 

Clark, Terrain’s senior rural economy analyst, said the corn industry is better positioned than other grain and oilseed commodities for this paradigm shift because the industry has already embraced value-add processing for ethanol and other products. 

“Think about corn 30 years ago,” he said. “We made what with it? Corn. We had corn, and then we fed it to cattle, and that was it. Now, if you think about the use of corn, huge, huge quantities of it go to ethanol. And if you look at what has grown in exports, it’s not bulk corn … it’s the high-value dried distillers grains … the high-value bioenergy byproducts.”

Paul Gieselman, a southeast Iowa farmer, is the vice chair of the Iowa Corn Promotion Board’s Research and Business Development Committee. He said the organization is eyeing opportunities for corn in bio-based chemicals to replace petrochemicals in textiles and plastics. 

“One of the specific companies I could mention is Lululemon,” he said. “They have interest in bio-based products. They’re working with Iowa farmers to understand the corn supply chain and how corn moves so they can create bio-based textiles from chemicals that we and others in the industry have developed.”

Another example is a bio-based vinyl acetate monomer that can be used to create things like the base of Croc shoes. Gieselman said it “could potentially grind a lot of corn.”  

Soybean Innovations 

Terrain concludes soybeans have “medium- to long-term risk from slowing population growth of top trade partners” and need domestic markets for value-add products. 

Meagan Kaiser, a northwest Missouri farmer and former chair of the United Soybean Board (USB), said the organization is focused on new product development. Similar to corn, USB has worked with brands to replace petroleum, resulting in the commercialization of more than 1,000 soy-based products.  

“When you think about everything that petroleum is used in, we have thought, ‘Well, I wonder if soy can do that?’” she said. “Our high oleic variety is really useful in creating certain plastics.” 

Terrain and Kaiser say U.S. soybean crush capacity must increase to boost domestic production of soy-based products.

“I know quite a few different crushers are expanding their domestic abilities,” Kaiser said, adding she’s interested to see how the global marketplace responds to these developments. 

Quality Trade Partners 

Terrain concedes that exports should remain important for U.S. agriculture, but argues commodity farmers and their trade associations need to foster trade partnerships strategically. 

Gieselman and Kaiser spoke of the value of building relationships with developing countries that are likely to have a growing demand for protein. There is also emphasis on distinguishing U.S. corn and soybeans as sustainable products. 

Gieselman said one of his takeaways from a recent trade mission to Japan was that end users are willing to pay more for sustainability. 

“Sustainable aviation fuel was a great example, where they said they will pay more for that product if they can prove that it’s sustainable,” he said.  

Planning Ahead

Clark and Woolf said that while 2065 may seem far away, it’s time to start thinking about this tide change because in agriculture, decisions made today have the potential to impact the decades that follow. They said they don’t expect rapid changes, but growing change “on the margin.” 

“Iowa is still going to need to make a whole bunch of yellow No. 2 corn for the ethanol industry,” Clark said. “That’s still going to be great for them. And I don’t say ‘Out with the old, in with the new.’ I just think that you’re going to see more gradual pieces and adoption of different techniques.” 

Regardless of when things start to change, Clark said things must change if farmers want their commodities to stay viable. 

“I see this as a big opportunity for a lot of these commodities to change and adapt with where we’re headed,” he said. “Corn’s a great example. The risk isn’t that global population is declining — that’s happening. The risk is not doing something about it. You can’t bury your head in the sand on this.”

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