The future is bright for U.S. agriculture to meet world’s protein demand
American agriculture is poised for enormous opportunities in the global marketplace, but only if farmers and ranchers adopt a mindset to adapt and innovate quickly to meet the demand, says Gregg Doud, chief executive officer (CEO) of the National Milk Producers Federation.
Doud shared his geopolitical food and ag insights Oct. 9 in his Henry C. Gardiner Global Food Systems Lecture at Kansas State University.
His career experience in the global food arena has taken him from his boyhood home in Mankato, Kan. to working for U.S. Wheat Associates and the National Cattlemen’s Beef Association, to serving as U.S. ambassador and chief agricultural negotiator in the Office of the U.S. Trade Representative.
Today, he is the CEO and president of the National Milk Producers Federation.
The China in the room
“What happens in China in terms of food dictates everything else in the rest of the world,” Doud said.
In 2022, China imported $236 billion in agricultural commodities, while the U.S. exported $196 million, he said.
He noted several key trends the U.S. farmers should pay attention to. These include:
1. Hog production: China produces nearly one-half of the world’s hogs in massive 20-story high, farrow-to-finish facilities, which rival high rise hotels and can house 100,000 sows. In 2020, the Chinese government banned feeding swill, causing a boom in corn imports overnight.
Today, China is the biggest corn importer on Earth, at $10.46 billion in imports this year.
For the first time, China has reached out to Brazil to meet its corn demand, Doud said, because of the war in Ukraine and because they didn’t want to be beholden to the U.S.
2. Taste for beef: Young people in China have a taste for beef, and the country is cleaning the world out of it, Doud said. The country imported about 150,000 metric tons of it in July, nearly a record high.
In his negotiations with the Chinese as ambassador, Doud said they were mostly concerned with the safety and traceability of the beef they purchase. Easing their concerns is how the U.S. sold China $2.1 billion in U.S. beef last year.
3. Fertilizer monopoly: According to Doud, Brazil, Russia, India and China dominate global food production. On the fertilizer side, they are enormous competitors for nitrogen, phosphorus and potash, which could pose a problem for U.S. farmers if they ever decide to collude, he warned.
Changing soybean focus
The rise of renewable diesel’s popularity, as well as Brazil’s emerging production boom, is poised to change the way we look at the soybean market opportunities of the future.
He explained if Brazil can raise one crop of corn and soybeans on the same ground every year, the timing of when they go to market is a problem for U.S. soybeans to compete.
“They have seasonality, better-quality soybeans and a freight advantage over the U.S.,” Doud said.
“Here’s the question we have to ask ourselves,” he continued. “How sustainable is it? How hard can they push land down there and continue to do it year after year? We’re going to begin to see a little yield drag.”
And yet, the news isn’t all bad for U.S. soybean farmers.
Rising demand for soybean oil for production of renewable diesel due to government mandates means for the first time in history, the U.S. will be using more soybean oil for renewable diesel than we are for food.
“We are going to have a mountain of soybean meal – to a point where I had a conversation the other day about soybean meal pricing at $150 a ton,” Doud said.
So, if competing against Brazil in exporting soybeans isn’t ideal, the U.S. could feed soybean meal to more hogs and poultry and export the protein to regions which cannot meet their domestic demand.
“In no way, shape or form does the supply of animal protein in the world come anywhere near meeting the demand,” Doud said. “And, if we look around the world, what do we see? Who else in the world can make more animal protein than the U.S?”
“Europe’s push for a farm-to-fork system which throttles back its farm production won’t meet the demand,” he explained. “America has the knowledge, the technology and the resources to raise cattle, hogs and poultry and produce dairy.”
Doud pointed out Manhattan, Kan. is the epicenter of opportunity in the animal agriculture sector with the National Bio and Agro Defense Facility next door to one of the best veterinarian schools in the country and right along the animal health corridor.
“There’s a record $53 billion in venture capital being invested in technology to help farmers grow more crops and healthier livestock, and yet our government regulations stand in the way,” Doud said.
“The technology we have coming in agriculture is unbelievable – from finding a similar molecule to glyphosate in the mint plant, to see-and-spray weed control in equipment, to autonomous transportation and robots in dairies,” he added. “And yet, we can’t get government approval for some of this technology in a time frame which provides a return on investment for these innovators and further delays our growth.”
“This is a holdup for our country,” Doud continued. “We have got to get our government to the point where they approve this technology, so we can move forward.”
“The changing global marketplace is going to require an American farmer of tomorrow who can adapt and innovate and be flexible to change when the market changes,” Doud told attendees.
“If you don’t have this mindset in agriculture, you’re not going to make it,” he concluded. “You have to be able to adapt and innovate and be willing to use technology.”
Jennifer Latzke is the editor for Kansas Farmer. This article was originally published in Farm Progress on Oct. 30.