Corn & Soybean Digest editors asked eight notable experts how your business will change between now and 2020. Some of their projections are startling; and some you'd naturally expect. So grab your GPS and chart your course.
HEALTH IS THE WATCHWORD
Lowell Catlett is not a newcomer to predictions. As head of the New Mexico State University College of Agriculture, he's kept his fingers on the pulse of the future for many years, and he loves doing it. He even consults with many of the major Fortune 500 companies, guiding them into their business futures.
Here are his top five predictions for the future:
Health: “The future of corn and soybeans is going to be about health, for both humans and animals,” says Catlett. “I'm not talking about adding genes, but figuring out the genes that are already inherently there. We're just starting to understand what's already in those seeds. Imagine what we'll find when we unwind the DNA helix?”
Green Revolution: “The green movement is here to stay,” he says. “Future generations won't give up on it.”
He adds that we're now putting sod and bedding plants on rooftops. In Chicago, for example, the downtown loop has 10 million square feet of space on top of roofs that can be used to grow food, provide habitat for birds and improve air quality.
Biofuels: Although Catlett says oil will be king for a long time, he believes corn and soybeans will also be used as stocks for a long time — at least for another generation. “The public doesn't want king oil to dominate everything. We need diversified energy so we don't get the drastic spikes in energy costs.
“But we'll use different feedstocks for biofuels. Hauling stubble and waste products very far is expensive,” he says. “One solution may be with using algae technology.”
Electricity: Catlett is convinced that farmers will use onsite methane and wind generators to power their own farms. “They'll even produce enough to sell into the power grid. It will be the beginnings of decentralization of electrical generation,” he says.
Food ID: No question, Catlett says, “We'll see certification on where grain comes from. Smart companies are already doing it.”
— Greg Lamp
NEW CHEMISTRIES SLOW TO SURFACE
Non-glyphosate herbicides will have greater importance in the future due to the presence of glyphosate-resistant weeds, says Bryan Young, agronomist and associate professor of weed science at Southern Illinois University.
“There'll be less of an economic advantage for glyphosate compared with other herbicides and the commercialization of new transgenic crops, such as Dow's DHT crops, Liberty Link soybean, Optimum GAT corn and soybean and dicamba-tolerant soybean,” he says.
New chemistries may be slow in coming. “We have moved past the ‘easy life’ with glyphosate-resistant crops,” Young points out. “We need to integrate other herbicides into our management plans. In my opinion there aren't enough new herbicide chemistries to remove grower doubts about weed resistance.”
However, he thinks growers believe there are going to be enough new chemistries to remove their doubts about weed resistance. “Unfortunately, a new mode of action will not be available in the next five years,” says Young. “But hopefully in 10-15 years, a new one will be discovered.
“For insect control, I don't know for certain,” he adds. “But with the combination of insect-resistance traits either being developed or currently on the market, insecticide seed treatments and traditional insecticides will likely provide a robust system for insect management.”
Volatile commodity prices and grower uncertainty on the most profitable production practices or strategies will be apparent, says Young.
“In 15 years, a significant, yet relatively small shift toward energy crops beyond the major row crops will have occurred,” he predicts. “This will be an exciting area but not play a large enough role to offset our traditional production systems in corn and soybeans.”
Young figures increased yield potential through biotech improvements will occur, although they may not dramatically increase profitability due to uncertainty in commodity prices and input costs.
“Growers will face more complicated management, with more seed traits to choose from, along with numerous inputs for yield enhancement including traditional crop protection and plant health,” says Young. “Management on a per-acre level will require more labor due to the complexity.”
— Larry Stalcup
BIOTECH JOINS AUTOMATION ON THE FARM
In the future, new technology will bring about large step increases in efficiency rather than small incremental changes, predicts Clay Mitchell, who farms 2,500-acres in northeast Iowa, with his mother, father and great-uncle.
“The new approach is that if an area of a field is unproductive, we will change it,” says Mitchell. “If it's too wet, we'll drain it. Too dry, we'll terrace it. If it needs better soil, we'll bring in new soil.”
The melding of biotechnology and automation technology will also allow novel and otherwise impractical farming systems like intercropping to succeed, says Mitchell.
“In this approach, automation using real-time kinematic (RTK) guidance technology will allow sub-inch placement of different seed species. New biotechnology like universal herbicide tolerance will allow treating this seed mix with one chemical type,” he says.
Intercropping will also allow farmers to exploit their fields to benefit one or both crops. “For example, corn needs more sunlight, so when we grow corn between strips of soybeans, corn yields will increase substantially and soybean yields will remain the same or decline only slightly,” Mitchell says. “This year, our strip-intercropped corn routinely exceeded 300 bu./acre. At the interface between corn and soybeans, the corn yields exceeded 400 bu./acre — and this was on corn that was not given special treatments like yield contest corn.”
CORN COBS FUEL CELLULOSIC ENERGY
“We see corn-based ethanol thriving in the future. It's here to stay and is the foundation for cellulosic ethanol. But, biomass is a growing part of our business,” says Jim Sturdevant, who heads up Project Liberty, a commercial-scale cellulosic ethanol project for Poet. Poet is the largest ethanol producer in the world, producing and marketing 1.5 billion gallons of ethanol annually.
The way Sturdevant sees it, ethanol companies need to do well in the next few years. If they're not healthy, they won't invest in cellulose.
“At Poet, our approach has always been to work directly with farmers because we need their corn grain, and now we also need their corn cobs. It's the first logical step toward cellulosic ethanol,” he says. “It's just common sense to base cellulosic ethanol on what we're doing today.”
By going to the same farmers who provide corn, ethanol companies can take advantage of the infrastructure that's already there. “We don't need to build new plants, just bolt on cellulosic technology to existing plants,” he adds.
Sturdevant believes that ethanol can be produced even more efficiently by integrating cellulosic technologies with traditional technologies because the waste product can be used to produce energy to power plants. All that will reduce dependence on natural gas and lower expenses.
“I think our nation and world needs biofuels from all kinds of cellulosic feedstocks, and many show promise,” Sturdevant says. “But we wanted to start with the lowest hanging fruit and that's from the corn cobs surrounding our 26 plants. We already have 10,000 farmers providing grain to our plants, so it's a good first step. And, cobs will be a new revenue stream for farmers.”
Poet sees ethanol as the nation's best renewable fuel; reliable and affordable now. New technology is helping production become even more efficient.
“Ethanol is here today and it works,” Sturdevant says. “What we do need, though, is for the government to raise the blend wall above its current level of 10%. We can't have a cellulosic ethanol industry without a market, and that means higher ethanol/gasoline blends.”
— Greg Lamp
DOUBLE YIELDS WITH BETTER GENETICS
“Fifteen years from now, we'll be well on our way to doubling corn and soybean yields in the U.S.,” says Robb Fraley, chief technology officer at Monsanto Co. “Crop genetics — specifically marker-assisted breeding — will play a crucial role in getting us there, along with agronomic practice improvements and biotechnology traits.”
He says the underlying factor in agriculture is the world's growing demand for meat and, in turn, for more grain.
Fraley says U.S. growers will be called upon to continue to produce more corn and soybeans on each acre they farm. They'll need to use tools available today and tomorrow to meet those demands, including biotechnology, breeding and agronomic practice improvements.
The most obvious way to improve on-farm profitability is by increasing yield. “Marker-assisted breeding is the treasure map for discovering and unlocking genetic potential. Based on advancements like that, the future looks very bright for U.S. growers,” he says.
Fraley says new chemistries are a part of the solution for controlling weeds, insects and diseases and advances are in the works to provide farmers with new tools for doing so.
“Roundup in a Roundup Ready system continues to provide a complete package of weed control, but we understand the importance of tackling weed resistance issues head-on,” says Fraley. “That said, we believe a multi-prong approach is best in addressing resistance.
“In managing insect resistance, we are proactively moving to multi-trait combinations to reduce the selection pressure for resistance (including collaborations with other companies),” he adds.
Fraley is excited about prospects for new seed-treatment fungicides, too. Efforts to improve the health benefits of the oil by working on technologies such as omega-3 soybeans are also important for Monsanto Co. and others, he says.
— Larry Stalcup
ROBOTS WILL MICROMANAGE FIELDS
Imagine each seed mapped as it's planted so that subsequent robotic field passes can weed, spray and harvest more accurately.
This is just one way that precision agriculture, GPS and robotics will mesh in the future to maximize productivity. So says robotics expert Simon Blackmore, visiting ag engineer, University of Thessaly, Greece, and Bristol Robotics Laboratory, Great Britain, and managing director of Unibots.
“Precision geospatial mapping will maximize the distance between seeds in hexagonal rows for maximum access to nutrients and sunlight,” Blackmore explains. (Hexagonal spacing still has rows — but at a different angle. They resemble a bee's honeycomb pattern.)
In the next five to 15 years, Blackmore sees precision geospatial mapping of each seed's placement facilitated by real-time kinematic (RTK) GPS technology on seeders, with infrared sensors mounted below the seed chute.
“As a seed drops, it cuts the infrared beam and triggers a data logger that records the position and orientation of the seeder,” Blackmore says. “A simple kinematic model can then calculate the actual seed position, which guides subsequent weeding and harvest operations.”
In the future, farm automation will evolve on two scales simultaneously, Blackmore says. “You will see small autonomous robotic planters, weeders, sprayers and harvesters monitored remotely; and larger, more automated versions of today's equipment that still rely on a human in the cab to ensure safety and reduce liability,” he says.
“I see single machines on small fields, and armies of them in bigger fields, accessed at any time via the Web. “This technology will enable you to treat crops and soils selectively according to their needs.
“There will be smart machines tilling, weeding, spraying and harvesting crops,” says Blackmore. “Being smaller, they can operate in poor weather and soil conditions. They will plow just a few cubic centimeters deep, minimizing energy use and soil compaction.
“There will also be large autonomous tractors controlling all the functions themselves with the driver assuring safe operation,” he adds.
“Each of the major manufacturers say it will have a commercially available autonomous tractor in the next 10 years,” he says.
— Susan Winsor
CLEAR PLAN REQUIRED IN AG LENDING
The post-credit-crunch era will require producers to present a clear plan and outlook for their operations, predicts Karol Aure-Flynn, executive director, Rabobank Food & Agribusiness Research and Advisory. Unanswered questions will raise bankers' eyebrows more than ever.
“Timing will be everything in the next five to 15 years,” she says. “Contrasting with the supply-driven price declines in the 1970s and in 2006, the price boom of 2006-2008 is demand-driven. Per-capita GDP growth in emerging economies, as well as supply shocks such as the two-year Australian drought, will be factored into future markets.”
Structural change in the balance of supply and demand will support grain and oilseed farmers, says Aure-Flynn. But credit, exchange rates, outside markets and index fund behavior outweigh the fundamental influences, and will cause a real profitability squeeze.
“We expect a volatile, bumpy territory for price and profitability,” she says. “But there is unprecedented opportunity for holders of productive agriculture resources as the global economy gets on its feet.”
She predicts the overall issue of food security will play an increasing role. “China and other growing economies will play a major part,” she says. “We may see a war for acres due to increasing global competition.
“The proprietary aspect of new technologies will influence profitability, in terms of both release dates and seed supply levels,” she says. “There will be cyclical opportunity for improved margins, but history reminds us that commodities are a declining margin business in the long run, accompanied by greater overall risk, as capital requirements increase.”
— Larry Stalcup
DEMAND DRIVEN BY WORLD ECONOMIES
The key issue for agriculture product demand is how deep the recession goes in Asia and the world, says Mike Boehlje, ag economist, Purdue University.
“The issue is whether Chinese economic growth slows to 3-4% vs. the 8-10% growth they've recently experienced,” Boehlje says. “A 3-4% growing rate in China would be devastating to growing demand for animal proteins and the dietary transition China has been experiencing, which is not good for exports of animal proteins' feed grain demand.”
Boehlje expects a return to economic growth in Asia and the U.S., but also a strengthening dollar.
“My expectation is that the slowdown we're experiencing will work its way through the system in as short as 12-18 months,” says Boehlje. But, a strengthening dollar could mean negatives for U.S. producers.
“As the dollar strengthens, the U.S. is less competitive to alternative export sources,” he says. “The potential slowdown in demand overall and our relative ability to compete is impacted.”
Along with that competition, growers are currently facing increasing risk, Boehlje says.
“Some traditional risk-management procedures that are typically used are less effective,” he says. “Financial strategies will be more important than in the past. Maintain financial reserves and make sure you have strong working capital positions.”
As risk increases, Boehlje sees the growth in demand for corn for ethanol declining.
“Ethanol is a mature market and growth will slow,” he predicts. “Corn-based ethanol will mature at about the 15-billion-gallon level and won't be as important as a source of growing demand for corn.”
What will be a demand for ag commodities, however, is livestock.
“More sustainable growth in demand for corn and beans will be driven by the global livestock industry,” says Boehlje. “I expect that will be a more sustainable growing demand than energy or other demands for corn and soybeans. Long term, demand will continue to be strong for ag products in general.”
— Jen Bennett