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Indian appetites are changing the U.S. crop mix
For any other ag policy nerds...
http://www.bloomberg.com/graphics/2016-pulse-crops/
Farming on the Northern Plains is a never-ending battle to keep the soil alive and in place. Long, dry winters kill precious organisms; the ever-present wind blows dirt across the prairie. Certain crops can help, especially pulses. Legumes such as dried peas, lentils, kidney beans, and chickpeas fight erosion and replenish life-giving nitrogen, reducing the need for chemical fertilizers. That made Beau Anderson an early convert to pulses on his wheat and barley farm outside Williston, N.D., where he added them to his crop rotation more than a decade ago.
There wasn’t much money in it then. Pulses are high in protein and low in fat, but Americans don’t eat a lot of them. Expanding demand for corn ethanol and surging U.S. soybean exports to China helped keep pulses in the background. “When we first started growing lentils, our strategy was to break even on them,” Anderson says.
For him and many other farmers, that calculus has changed. The biofuels industry and the Chinese economy are stagnant, which is weighing on demand and prices for U.S. corn and soy. And India, an emerging buyer with a huge appetite for pulses, is beginning to assert itself on the world food market. “The next couple decades could belong to India,” says Erik Norland, an economist with the Chicago Mercantile Exchange. “It will have a real impact on what farmers choose to grow and on what the world eats.” India’s annual food imports have risen 61 percent since 2010, to $22.6 billion, and there’s more room to grow. Its population is expanding at a rate of 1.2 percent per year, compared with 0.7 percent for the U.S. Indians eat 17 percent fewer calories per day than the world average, a deficit that Norland projects will shrink as the nation becomes more prosperous and imported food becomes more abundant and affordable.
Led by India, global demand for U.S.-grown pulses reached $702 million last year, more than double that of a decade ago. Pulses won’t overtake traditional American cash crops anytime soon, if ever: In 2015, U.S. farmers dedicated 88 million acres to corn production and less than 2 million acres to peas and lentils. That’s partly because legumes require higher maintenance when it comes to controlling insects and weeds, so massive acreage becomes labor-intensive. Still, with corn and soy at less than half their peak prices, the economics of growing pulses is becoming more attractive. “The more demand we have, the more consistent the market becomes, the easier it is to convince farmers to grow them,” Anderson says.
There wasn’t much money in it then. Pulses are high in protein and low in fat, but Americans don’t eat a lot of them. Expanding demand for corn ethanol and surging U.S. soybean exports to China helped keep pulses in the background. “When we first started growing lentils, our strategy was to break even on them,” Anderson says.
For him and many other farmers, that calculus has changed. The biofuels industry and the Chinese economy are stagnant, which is weighing on demand and prices for U.S. corn and soy. And India, an emerging buyer with a huge appetite for pulses, is beginning to assert itself on the world food market. “The next couple decades could belong to India,” says Erik Norland, an economist with the Chicago Mercantile Exchange. “It will have a real impact on what farmers choose to grow and on what the world eats.” India’s annual food imports have risen 61 percent since 2010, to $22.6 billion, and there’s more room to grow. Its population is expanding at a rate of 1.2 percent per year, compared with 0.7 percent for the U.S. Indians eat 17 percent fewer calories per day than the world average, a deficit that Norland projects will shrink as the nation becomes more prosperous and imported food becomes more abundant and affordable.
Led by India, global demand for U.S.-grown pulses reached $702 million last year, more than double that of a decade ago. Pulses won’t overtake traditional American cash crops anytime soon, if ever: In 2015, U.S. farmers dedicated 88 million acres to corn production and less than 2 million acres to peas and lentils. That’s partly because legumes require higher maintenance when it comes to controlling insects and weeds, so massive acreage becomes labor-intensive. Still, with corn and soy at less than half their peak prices, the economics of growing pulses is becoming more attractive. “The more demand we have, the more consistent the market becomes, the easier it is to convince farmers to grow them,” Anderson says.
It's a cool example of how what started as essentially a crop rotation strategy with minimal commercial aspects in itself finds a role in global trade.
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