When you take a look at the numbers, it’s hard not to be excited about the prospects for future soy demand.  Global population and income are projected to rise in the next few decades.  That means not only will there be more mouths to feed, there will be more mouths with better income to feed.  Ultimately, soy consumption could escalate faster than production.

“The number of presently low-income consumers lifted out of poverty will be the most important determinant of the future global demand for food,” says Robert Thompson, University of Illinois Gardner endowed agricultural policy chair.  “Income growth drives food demand growth, and the group in the $2-$10 per day income range is growing quickly.  That is the group eating more meat, dairy, fruits, vegetables and edible oils, which means more demand for raw commodities.”

Thompson explains at $2 per day, most people just solve hunger problems.  About one-third of the Chinese population lives on less than $2 per day, along with half of Indonesian and about 75 percent of Indian consumers.  Above $10 per day, people buy more processed and packaged foods, not raw commodities like soybeans.  A lower percentage of income is spent on food.

“World food demand is expected to double between 2000 and 2050, with half of the demand growth coming from population and half from income growth,” Thompson says.  “The share from population growth will come from the low income countries and the $2-$10 consumers.”

Thompson says world population will see a 38 percent growth from 2000 to 2050; low-income country population will grow 45 percent and high income will grow 7 percent.

“Low income country consumption will eventually outstrip their production capacity,” he says.  “As a result, a larger fraction of ag production will need to move through trade channels.”

Not all trade will be raw commodities.  Greater demand for meat, poultry and milk is expected in the long run.  John Baize, international trade consultant, notes that current global pork and broiler production are outpacing consumption, but demand for both is steadily increasing.

“Soybean consumption continues to grow, although 2009-10 production will surpass it.  Consumption growth will continue as global livestock production increases,” he says.  “In order to meet demand, the world will need an additional 70-80 million metric tons (2.572 to 2.939 billion bushels) of soybeans in the next 10 years; about equal to current U.S. annual production.”

Such production growth will require innovation and research.  “At most, 12 percent more arable land is available, mostly in Brazil and sub-Saharan Africa.  That area could only be doubled by destruction of forests, loss of biodiversity and carbon sequestration,” Thompson explains.  “But we could almost double productivity on fertile, non-erodible ground already in production.”

Climate change is another concern.  “The biggest effect on agriculture will be from extreme events, such as a shift in production to northern climates and a changing mix of crops grown in various regions,” he says.  “Adaptive plant breeding is necessary to increase genetic potential and yield stability by improving nutrition, water use and weed, disease and insect control.”