Agricultural Production—Crops

SIC 0100

NAICS 111

Crop production provides the bulk of human nourishment. Primary categories in the industry include grains, general field crops, vegetables, and fruits. The cultivation of plants underwater is discussed under the heading Aquaculture.

INDUSTRY SNAPSHOT

With new markets opening up worldwide as a result of global trade agreements, and with rising incomes in developing countries such as China and other parts of Asia, crop producers in the early 2000s gained greater access to world markets. The rapid growth of China's economy, for example, made that country the world's leading consumer of grain by 2005. Moreover, new technology for storing, transporting, and producing crops also enhanced the trade and production potential of agricultural businesses around the world. However, fluctuations in the Asian and world economies will continue to affect the long-term outlook for the grain, fruit, vegetable, and specialty agricultural markets. In addition, weather conditions and other events, such as the devastating tsunami that hit southern Asia in December 2004, could have unpredictable impacts. The tsunami, for example, washed away topsoil and contaminated cropland with salt water, damaging thousands of kilometers of agricultural land. Some 50,000 hectares of farmland in Sumatra and 5,500 hectares in Sri Lanka were severely damaged; in the Maldives, according to the United Nations Food and Agricultural Organization (FAO), about half of the country's field plots were destroyed. Though world impacts are not expected to be significant, local agriculture in these areas may take several years to recover.

The trend toward more efficient production of crops was expected to continue through the early 2000s. For example, in 1992 some 223.2 million hectares were devoted to wheat production with an output of 561.8 mmt, or a yield of 2.52 metric tons per hectare; by 2005, approximately 235.6 million hectares were anticipated to produce 653.8 mmt, or a yield of 2.77 metric tons per hectare, according to Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA) projections. In effect, the area planted would grow by 5 only percent, while the yield, or amount produced, would grow by 16 percent.

The FAO reported in March 2002 that raisers of crops in the next three decades must find a way to grow more crops with less water, because by 2030 the world's water supply would be unable to meet projected crop irrigation demands. Irrigation use would have to increase by more than 80 percent by 2030 to satisfy projected global food demands.

One solution to global hunger that drew serious attention is to have the world's agricultural education community halt the spoilage of tons of fruit and produce wasted annually in countries where a large number of people with nutritional deficiencies live. In Pakistan, for example, agricultural analysts estimated up to 3 million tons of fruit and produce are wasted each year because of substandard harvesting and packing measures.

Grains

Falling output of grain in the early 2000s raised international concern. According to a U.N. Wire report from September 2003, the estimated world grain harvest in 2003—the fourth consecutive year of shortages—was 93 million tons short of demand, plunging world reserves to their lowest levels in 30 years. Drought and water shortages were blamed for much of the collapse, according to the USDA; the Earth Policy Institute blamed climate change. Shortages in 2001 and 2002 were particularly acute in China, the world's most populous country, and in a reversal of a more positive trend through the 1990s, China in 2004 became a net importer of wheat. Total grain harvests improved in 2004, reaching an estimated 1.85 billion metric tons; this favorable trend was expected to boost output to more than 2.0 billion metric tons in 2005.

Corn production throughout the world was forecast to total 700.6 mmt in 2005, more than 27 percent above 1992's level, as corn became the world's leading cash grain, according to the ERS. In contrast to wheat, most of the corn crop went to feeding animals; about 70 percent of 1998's corn crop was expected to be used as feed. Corn exports also were slated to rise, climbing to 90.7 mmt in 2005. Expanding agricultural economies in China, Argentina, and North African countries were expected to add to the demand because these countries would require more grain for feeding livestock. The United States dominated corn exports by a substantial margin: in 2004 the country's corn exports were estimated at 50.0 mmt. Other important exporters for 2004 included Argentina with 9.0 mmt, China with 8.0 mmt, and Brazil with 5.5 mmt.

Global output of wheat, the second leading grain in terms of production volume, was just below that of corn and once exceeded corn in total global production. Wheat production fluctuated slightly in the early 2000s but averaged almost 580 mmt a year. Though harvests reached only 566.96 mmt in 2003 and 552.83 mmt in 2004, production was expected to exceed 620.8 mmt in 2005. The leading wheat producers are the European Union, China, India, the United States, Russia, and Canada.

Rice ranked third globally in grain production in the early 2000s, at 389.2 mmt in 2004. Among the leading grains, rice production has grown at the steadiest pace. China, by far the leader, produced 35 percent of the world's rice, followed by India with 21 percent and Indonesia with 8 percent. Bangladesh and Vietnam are also significant producers. According to USDA projections, the global rice trade was expected to grow at a 2.4 percent average from 2004 through 2013, which represented 6 to 7 percent of all agricultural trade. In the early 2000s, rice in the United States was a US$1 billion industry, although it only amounted to about 2 percent of all production.

World soybean production rose from 189.2 mmt in 2003 to 206.4 mmt in 2004. Brazil and Argentina, which had steadily increased production from 1997 through the early 2000s, accounted for almost 45 percent of world soybean production in 2003. The United States remains the single largest producer, with 66.78 mmt in 2004 and a projected 85.4 mmt in 2005. Brazil ranks a close second, with a projected harvest of 644.5 mmt in 2005, followed by Argentina, with a projected crop of 39 mmt.

Fruit

Bananas are the largest single fruit crop in the world, followed by grapes, oranges, and apples. Global banana production exceeded 70.6 mmt in 2004, while grape production topped 65.4 mmt and orange production reached 63 mmt. Global apple production, which rose through the 1990s, exceeded 59 mmt in 2000 and remained relatively steady through 2004. China produced 20.5 mmt in 2004, with harvests in the United States at 4.2 mmt and in Chile at 1.1 mmt. World pear production, which reached 17.9 mmt in 2004, was dominated almost exclusively by China, which raised 10.1 mmt. The European Union ranked second with 3.0 mmt.

Horticultural Products

According to the ERS, the value of total horticultural exports worldwide in 2003 exceeded US$12.3 billion. The largest importer and exporter of horticultural products is the European Union, followed by the United States, with imports valued at US$21.9 billion and exports at US$12.3 billion of in 2003. Leading exporters were Netherlands, Spain, Mexico, the United States, and China, while leading importers were the United States, Germany, Britain, and Japan.

Among nations that dramatically increased production in the early 2000s was Vietnam. At the start of 2002, Vietnam's Ministry of Agriculture and Rural Development (MARD) predicted an end-of-year production of 11.4 million tons of fruit and vegetables with an export worth of US$440 million. Also in Asia, the government of Shandong Province in China dedicated considerable areas of land in order to become competitive in the production of green vegetables, according to Asiainfo Daily China News.

Oilseeds

The ERS predicted that oilseed trade would expand quickly in the twenty-first century and that the United States, and to a lesser extent Argentina and Brazil, would continue to dominate oilseed trade through 2005. The United States accounted for 34 percent of the world crop in 2003 and supplied 40 percent of world exports. Brazil was the second largest producer, contributing 28 percent of global soybean production, followed by Argentina with 18 percent. China, the largest market for U.S. soybeans, imported US$2.9 billion in 2003. It was followed by the European Union, with imports totaling US$1.1 billion. Increased demand for peanuts in Eastern Europe, Asia, and the Middle East contributed to a 20 percent growth in world peanut trade between 1998 and 2004. China's peanut export in 2003 reached about 600,000 tons, according to the People's Daily —accounting for approximately 40 percent of global export volume. Other major exporters included the United States and Vietnam.

Of increasing concern for global oilseed producers was the possible negative effect of development projects. A natural gas pipeline from Bolivia to Brazil, completed in 2002, caused researchers to fear that natural wild peanut species native to the area could be wiped out. Scientists hoped that such species, many of which remain undiscovered, could help decrease the need for pesticides and also could prove resilient to drought and other adverse conditions...

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