UN: Biofuels to Grow Faster than Food Crops

UNoecdfaoTwo United Nations agencies say biofuel production will grow faster than food crops. This report from the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations says prices for the major crops worldwide have dropped significantly from record highs in the last couple of years due to the recent bumper crops of 2013 and 2014. In addition, ethanol and biodiesel prices are down due to plenty of feedstocks for the green fuels.

In the next decade, livestock and biofuel production are projected to grow at higher rates than crop production. This changing structure of global agricultural production prompts a relative shift toward coarse grains and oilseeds to meet demands for food, feed and biofuel, away from staple food crops like wheat and rice. The bulk of the additional production will originate in regions where determining factors, such as land and water availability, and policy regulations, are the least constraining.

Crop prices are expected to drop for one or two more years, before stabilizing at levels that remain above the pre-2008 period, but significantly below recent peaks. Meat, dairy and fish prices are expected to rise. In real terms, however, prices for both crops and animal products are projected to decline over the medium term. The expected stock-to-use ratios for cereals improve significantly, which should ease concerns about their price volatility.

The report goes on to say that the Americas will be the dominant export region for crops and biofuels, while Africa and Asia will increase their net imports to meet their growing demands.

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