ERS Charts of Note
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Monday, November 5, 2012
All of the leading firms in food manufacturing and agricultural input industries are multinational, offering product sales spread across several continents. One indicator of the degree of globalization of agricultural input markets is the global distribution of agricultural input sales. In 2006, member countries of the North American Free Trade Agreement (NAFTA--United States, Canada, and Mexico) accounted for about 23 percent of the global seed market and 30-36 percent of global sales of agricultural chemicals, farm machinery, animal feed, and animal health pharmaceuticals (including those for nonfood animals). The Europe-Middle East-Africa market (which is mostly Europe) had the largest aggregate seed sales in 2006, whereas Asia-Pacific countries used the most fertilizers and bought the most farm machinery. Together, Asia-Pacific and Latin America are indicative of the developing-country share of global agricultural input markets. They account for 37-51 percent of global sales of crop seed and chemicals, farm machinery, fertilizers, and animal feed. This chart is found in the ERS report, Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide, ERR-130, December 2011.
Monday, August 20, 2012
Research intensity in food manufacturing varies considerably across countries. For the United States, research intensity was 1.53 percent of food industry GDP during 2000-2007, about the average for all OECD countries. Among OECD countries, Switzerland, Denmark, Norway, and the Netherlands have the highest research intensity in food manufacturing. This partly reflects the presence of large, multinational, and R&D-intensive food companies in these countries, such as Nestlé (Switzerland) and Unilever (Netherlands). These companies likely dominate national totals for these countries, even though some of the R&D by these companies may be conducted outside their home country. Generally, research intensity in the food industry is considerably less than that in manufacturing industries as a whole. For the 2000-2007 period, research intensity in all manufacturing industries among OECD countries was 7.6 percent, compared with 1.6 percent in the food manufacturing industry. This chart is found in the ERS report, Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide, ERR-130, December 2011.
Friday, August 3, 2012
With the world's largest arable land area of 76 million hectares, fifth largest population base, and a strong record of agricultural production and exports, Brazil is viewed by many as the latest model of global agriculture. Over the last quarter-century, Brazil's agricultural production has grown significantly. Using production and trade data from the Food and Agriculture Organization of the United Nations, ERS found that the total value of the country's agricultural production between 1985 and 2008 grew 3.79 percent each year, driving up its share of total global production from 3.9 percent in 1985 to 5.7 percent in 2008. This robust production growth has increased Brazil's agricultural exports, with the total value of its agricultural trade growing 7.7 percent annually between 1985 and 2008. This chart comes from Policy, Technology, and Efficiency of Brazilian Agriculture, ERR-137, July 2012.
Thursday, July 5, 2012
Agricultural productivity growth depends on continued investments in research and development (R&D) by the private sector as well as by public institutions. Among agricultural input industries, research intensity, or research spending as a percentage of market sales, varies widely. The most R&D-intensive sector was crop seed/biotechnology. In this sector, R&D intensity was particularly high in the late 1990s and early 2000s when many new GM crop varieties were being commercialized. Several factors account for variations in research intensity across agricultural input sectors and over time. In addition to market size and growth, these include opportunities provided by scientific advances to develop new technology; the ability of developers to capture economic gains from intellectual property; rising (or falling) availability of agricultural resources; the cost of science and technology inputs used in research; and the regulatory costs of commercializing new technologies. As a result, even though the markets for fertilizer and animal nutrition are relatively large, profit margins are low and manufacturers lack incentives to invest much in research and innovation in these products. This chart is found in the June 2012 issue of Amber Waves magazine.
Friday, May 11, 2012
Upward trends in prices may reflect rising quality of inputs, or increases in manufacturing costs due to rising labor, capital, or material costs. Based on a price comparison of five categories of agricultural inputs, the largest change during 1994-2010 was in crop seed prices, which more than doubled relative to the price received for agricultural commodities sold by farmers. This increase was due, at least in part, to the increase in value-added characteristics developed by private seed and biotechnology companies through R&D programs. The sharp rise in the price of fertilizer in 2008-09 was driven by a significant increase in the cost of energy and materials used to manufacture fertilizer, as well as an increase in transportation costs and the falling value of the U.S. dollar. For agricultural chemicals, prices rose relative to commodity prices during 1994-99 but have since fallen. The recent decline partly reflects the rise in crop commodity prices after 2005 as well as an increasing market share for off-patent (generic) crop protection chemicals. This chart is found in Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide, ERR-130, December 2011.
Friday, February 3, 2012
Yield monitors allow farmers to document harvested yields and moisture content while the harvester is in the field. By attaching this information to Global Positioning System coordinates, farmers also have the option of creating detailed maps of their fields which can be used to tailor input application, measure precise rates of harvest and time-to-completion, guide efficient tractor movement, and develop other time, labor, and fuel-saving strategies. Based on Agricultural Resource Management Survey data from 2001 and 2005, corn and soybean producers that used yield monitors report lower fuel expenses per acre harvested, on average, than those that did not use yield monitors. This chart is found in the December 2011 issue of Amber Waves magazine.
Tuesday, January 10, 2012
Private spending on food and agricultural R&D in the United States has exceeded public-sector agricultural research expenditures most years since the late 1970s. Federal and State governments invested on average $4.40 billion annually (constant 2006 dollars) in agricultural research between 1980 and 2007, while the private sector spent an average of $4.95 billion per year (constant 2006 dollars) over the same period. But each sector focuses its research resources differently. The private sector accounts for about 80 percent of total food-related research and about 47 percent of total research related to production agriculture. Within these areas, public research is more oriented toward basic or fundamental science and scientific training, as well as topics like food safety, genetic resource conservation, and farming practices to conserve natural resources, research that has high social value but for which private incentives are relatively weak. This chart is found in the ERS report, Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide, ERR-130, December 2011.
Monday, August 1, 2011
For the past 60 years or more, the main driver of growth in U.S. agricultural output has been productivity growth, in turn, depends on agricultural research and development (R&D) investments by the public and private sectors, agricultural extension and education, and improved infrastructure. Holding other factors constant, the pattern of future growth in TFP can be simulated using a model relating current and future public agricultural R&D spending trends to TFP. If productivity-oriented public R&D spending is held constant at its current annual level of $2.5 billion for the next 40 years, the loss of real R&D budget purchasing power may result in TFP growth of only about 0.75 percent per year, roughly half of its current level. This could result in U.S. agricultural output in 2050 being roughly 40 percent higher than current levels when global demand for agricultural output is expected to be 70 to 100 percent higher. Allowing public R&D investments to keep pace with inflation (scenario 2) and inflation plus U.S. population growth (scenario 3) could result in U.S. agricultural output being 73 to 83 percent higher than current levels by 2050 without requiring that more resources (land, labor, capital) be devoted to agriculture. This chart comes from Public Agriculture Research Spending and Future U.S. Agricultural Productivity Growth: Scenarios for 2010-2050, EB-17, July 2011.
Tuesday, March 22, 2011
ERS data show that total farm output grew by 158 percent from 1948 to 2008, but total inputs used in agriculture remained largely unchanged. However, the composition of the input mix changed dramatically. While labor use declined by 78 percent and land use by 28 percent over those 60 years, chemical use grew fivefold from 1948 to 1980 before leveling off. Nevertheless, total factor productivity growth in U.S. agriculture over the period has been steady, at 1.52 percent per year, a rate exceeding that of a majority of other U.S. industries and of most other nations' agricultural sectors. This chart appeared in the September 2010 issue of Amber Waves magazine. It is based on the ERS data series, Agricultural Productivity in the United States.