Meeting the needs of many

KNOXVILLE, Tenn. -- Will meeting food needs in 2050 be effectively addressed or be more of the same?

Is there a shortage of agricultural production in the world today? And come 2050, when the world adds 3 billion people to the current population, will we be able to feed everyone?

Among the developed countries, including the major crop-exporting countries of Brazil and Argentina, there is the capacity to significantly increase production to the point that crop and livestock prices will sit in the basement.

At the same time, unless there is significant farmer and government investment in agricul-ture and the development of agricultural policies that pay attention to the needs of small-holder producers in the developing countries of the world -- especially in Africa -- the population in those countries will continue to suffer from high levels of chronic hunger and an increased number of deaths of children younger than 5. The poor in developing countries cannot afford to buy the excess production of developing countries.

What we have are two distinct problems that require different solutions, and yet at the same time are linked together.

Then more favorable weather returned to New Zealand and Australia, and their milk production recovered. At the same time, the U.S. economy took a nose dive, triggered by the mortgage crisis, among other factors and domestic demand tightened up. Suddenly, there was more milk, cheese and dry milk powder than the market could handle, so prices took a major tumble.

Because of a wet year with late planting and a killing frost arriving before the corn crop was at physiological maturity, grain and oilseed prices remained high. These events com-bined to put dairy farmers in a serious bind as the price dairy farmers were being paid for their production fell well below the cost of production. As a result, they were losing a bundle on each hundredweight of milk they sold.

Dairy farmers have funded a dairy herd buyout in an attempt to adjust production capacity to demand at a price that allows them to regain profitability. It may take an additional herd reduction to achieve that goal.

Production increase

While developing countries have the challenge of increasing agricultural production, and thus the livelihood of a mostly rural population where farming is the only available occupa-tion, developed countries face the problem of managing productive capacity.

Dairy farmers can take advantage of technology that sorts semen so that cows give birth to 90 percent heifers and 10 percent bull calves instead of the usual 50-50.

Likewise, the technology that is being bred into seeds today allows farmers to grow a near-record yield corn crop in terrible growing conditions.

While each farmer has an incentive to increase production when prices are high, an indi-vidual farmer has little reason to be the one to reduce production when prices are low. In-stead, the farmer hopes either for a return in demand or a decrease in production by farm-ers somewhere else.

Another point to ponder: Much of the unbridled-increase-in-production emphasis being promoted to solve the food security concerns of today may end up throwing a blanket of chronically low prices on commodities produced primarily in the developed world while continuing to aggravate the productivity problems of small-holder producers in the develop-ing world.

Editor's Note: Ray is director of the University of Tennessee's Agricultural Policy Analysis Center in Knoxville.