Will U.S. Farmers Meet the Tremendous Food Challenge Ahead?

Photo credit: Flickr/Dodo-Bird

Love 'em or hate 'em, Monsanto Company (NYSE: MON  ) produces some really compelling information about the state of the American farmer. The company has a pretty neat infographic that shows just how much farming has improved over the past 30 years. For example, in 1983, the average U.S. farmer fed 115 Americans. Last year, the average farmer fed 155 Americans.

That's just one example of how farmers have grown more productive over the past 30 years. Overall, the numbers are pretty staggering. In 1983, U.S. farmers produced 4.2 billion bushels of corn and 1.6 billion bushels of soybeans. Today, American farmers are producing 13.8 billion bushels of corn and 3.15 billion bushels of soybeans. That's a lot of growth for both farmers and for the companies that supply them.

Feeding the masses
Looking ahead, farmers around the world have an even more daunting task. Over the next 50 years, farmers must produce more food than they have in the past 10,000 years in order to meet demand. A combination of growing global population and a rising middle class must be fed by growing food on a shrinking supply of arable land.

Quite honestly, American farmers have no choice but to boost productivity in the years ahead. With global population expected to grow by 2.6 billion by 2050, farmers need to increase the rate of food production in order to keep up with rising demand. With some of the best farmers in the world, America will likely need to lead that growth.

Breeding productivity growth
To meet this challenge, American farmers will need to continue to improve the crop yields. This is where companies like Monsanto step in. The company's goal is to double the yield of its core crops by 2030. It plans to accomplish this through advanced plant breeding, biotechnology, and improved farm management practices. Further, the company hopes to double crop yields by doing so while with one-third fewer resources such as land, water, and energy.

The problem with Monsanto's approach that many people have a tough time with is the idea of advanced plant breeding and the use of biotechnology. That has forced companies to cut GMOs out of products as others are getting booted off the shelf. That will likely force many farmers to look elsewhere in an effort to boost plant productivity.

Fertilizing productivity growth
One approach we'll see is farmers using more fertilizers like potash and nitrogen. That'll boost the bottom lines of companies like Potash Corp. of Saskatchewan (NYSE: POT  ) as well as CF Industries Holdings  (NYSE: CF  ) . Both companies have been investing heavily to meet future fertilizer demand.

Potash is a key crop nutrient as it help plants develop strong root systems and retain water. It also enhances crop yields and promotes greater resistance to disease and insects. These key traits will have a growing importance to farmers. This is why PotashCorp is investing to grow its capacity so it can supply this important product to farmers around the word.

CF Industries, on the other hand, is a company that will really benefit American farmers first and foremost. Thanks to low natural gas prices -- a key feedstock in the nitrogen it produces -- CF Industries is investing $3.8 billion to boost its nitrogen capacity. That's important for American farmers as they currently import about 50% of the nitrogen used as fertilizer. Producing more nitrogen here in the U.S. will enable farmers to save money by purchasing a product made with cheaper American natural gas.

Final thoughts
American farmers will have no choice but to become even more productive in the years ahead. We need to feed more people on less land. The good news is, thanks to cheap natural gas, American farmers now have one key ingredient that could fuel their success. America's natural gas boom will reduce our reliance on nitrogen imports, which will lower costs for farmers. That's an important step in helping farmers do more with less. 

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  • Report this Comment On January 19, 2014, at 4:39 PM, Jack1940 wrote:

    We'd have plenty of food, much more than we could possibly eat, if most Americans switched to mainly vegan diets. We now feed massive amounts of grain and legumes to animals, which we then slaughter, for food. That leads to all kinds of health, and environmental problems. Too many to list here. Check it out.

  • Report this Comment On January 19, 2014, at 5:31 PM, mbee1 wrote:

    We export a lot of food, that food goes to a lot of countries where most of the people want us dead. I suggest exporting less would leave plenty for Americans.

  • Report this Comment On January 19, 2014, at 7:36 PM, jrkirk wrote:

    Another concept that has already been proven wrong. When I was in Ag college in the early 1960's, global population growth was the concern, with 'scientists' warning that we would all be starving to death if something wasn't done to stem over-population. Like Global Warming, and many other such concerns, this was another prediction that did not turn out to be problem. In the end, no one knows the future!

  • Report this Comment On January 20, 2014, at 12:48 AM, ddcmall wrote:

    So far nitrogen's use in fertilizer has been mostly confined to the production of ammonia where hydrogen also comes into play. And so far both gasses have mostly been produced by oil companies as byproducts of oil refining where these gasses and natural gas have been treated as waste products. The faring off of natural gas at oil wells is a prime example. Wasting natural resources is bad practice even though it is often seen as essential to maintaining or boosting profit.

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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