KANSAS CITY, MISSOURI, US — For decades, the food and agriculture industries, governments and nonprofit organizations have warned, cautioned, prepared for a time when they would have to feed more people, with more money, with less land and fewer resources. 

Upwards of a 70% increase in food production would be needed by 2050 to feed an additional 1.7 billion people, according to the Food and Agriculture Organization (FAO).

But what if the population didn’t continue to grow as expected?

Right now, the global population is growing at its slowest rate since 1950, falling under 1% in 2020, according to data from the United Nations. It is expected to grow to about 8.5 billion in 2030 and 9.7 billion in 2050, reaching a peak of about 10.4 billion during the 2080s and holding at that level until 2100.

More than 60 countries are seeing population drops, according to the United Nations, including China, which had its first population decline in 60 years, this year falling behind India as the most populous country.

There’s hardly a consensus on what direction the population will go and what that could mean for food production, said Chuck Penner, owner of LeftField Commodity Research based in Winnipeg, Manitoba, Canada. 

The areas of population growth are shifting to developing countries and regions such as Southeast Asia and Africa, where the UN said more than half of the global population growth will happen between now and 2050. 

“We keep hearing these Malthusian predictions that we’re going to run out of food or land, but it’s based on the premise of a steadily growing population at a pretty sizable rate,” he said. “And we’re finding out now those forecasts of steady population growth are not holding. It seems to be changing even more quickly in the last five to 10 years. That’s not enough to build a long-term trend on, but some argue that once we start to see population declines, they’re almost irreversible.”

Still, global population is not going to hit a peak and then start a rapid decline, but likely stabilize, said Tanner Ehmke, CoBank lead economist, grain and oilseeds. “The concern is you’ve got some major agricultural consumption countries like China that are slowing or declining in their population,” he said. “So, the question is, where is the growth? That’s what everybody is interested in. If you want to grow your business, you’ve got to find the growth markets.”

The areas of population growth are shifting to developing countries and regions such as Southeast Asia and Africa, where the UN said more than half of the global population growth will happen between now and 2050. 

“They all have their unique opportunities and challenges,” Ehmke said. “You can’t just hitch your wagon to those areas and grow those exports.”

To prepare for possible overproduction in the face of declining population, the agriculture industry will have to develop new markets in these higher-growth areas and also develop new uses for commodities, including further processing and more non-food uses. Growing incomes also could swallow some of the excess, as people demand more protein and dairy.

“Rising per capita GDP is going to be crucial to growth globally, biofuels are going to be crucial to growth,” Ehmke said. “I think those factors can play a big role in counterbalancing any decline in population we see in countries like China.” 

Population changes

Based on data from the United Nations, there are 61 countries or areas where the population is projected to decrease by 1% or more between 2022 and 2050. Of that 61, 26 could see a reduction of at least 10%. 

The world’s population reached 8 billion people on Nov. 15, 2022. It took 12 years for the population to grow from 7 billion to 8 billion but will take about 15 years to reach 9 billion, according to the UN, a sign that the overall growth rate is slowing. 

Some demographers are predicting the global population by the latter half of the century will enter a sustained decline for the first time, according to a New York Times article, “Long slide looms for world population, with sweeping ramifications.” Fertility rates will fall below replacement levels by 2100 in an estimated 183 countries and territories (out of 195 in the world).

Countries are trying to reverse the trend of lower fertility rates, but it’s not working, Penner said. Europe has offered incentives for having more children, and China reversed its one child policy. 

Two-thirds of the global population lives in a country or area where lifetime fertility is below 2.1 births per woman, the level required for zero growth in the long run for a population with low mortality, according to the UN’s “World Population Prospects 2022.” Fertility in all European countries is below the level required for full replacement, and in many cases has been below that level for several decades.

“It’s not just a matter of not having four, three or two kids; younger people have decided not to have any kids at all,” Penner said. “It’s based a little bit on this idea of catastrophism — the planet is doomed or in terrible shape, and there’s not much future. There are also economic issues.”

For decades, Europe has tried to combat its population decline with more immigration.

The dropping fertility rate in some countries can be attributed to improved education and more access to birth control, giving women a choice to not have as many children. 

“But even with more immigration, you’re really just shuffling the deck chairs; you’re not creating more population,” Penner said. “Countries that are seeing masses of out migration are trying to figure out how to keep their economies rolling along. There may even be restrictions on allowing people to emigrate. Who would blame them if they’re seeing young people with the greatest economic future ahead of them leaving the country? That’s a problem for them.”

The dropping fertility rate in some countries can be attributed to improved education and more access to birth control, giving women a choice to not have as many children. 

The population is also aging, which means a change in eating habits, Penner said. 

“Chances are the food consumption per capita would go down as well, so you’ve got fewer capitas and less food per capita being consumed,” he said. 

Where the population is declining — and growing — will have a major impact on the agriculture industry, Penner said.

“If we think about where our largest markets are, and if those are the ones that see the changes in population, certainly that’s more of a worry,” Penner said. “If it’s happening in countries where we’re not doing a lot of trading, it’s not so much of an issue.”

For example, the two regions with the fastest declining populations (Asia and Europe) represent 43% of total US agriculture exports in 2021, according to SwineTex, a swine management consulting company based in Texas, US, serving the global pork industry. In comparison, the fastest growing populations (Middle East/North Africa and sub-Saharan Africa) represent only 6.2% of total US ag exports. 

China is a top destination for agriculture commodities from the United States and several other countries, with $236 billion in agriculture imports in 2022. Its population also is dropping after peaking at 1.426 billion in 2022, with the UN estimating a population drop of 48 million between 2019 and 2050. It could fall to 730 million people by 2100.

Total caloric consumption also is expected to decline by 10% to 15% in the next 30 years, mostly due to population decline but also aging, according to SwineTex. 

“When we are all agriculturally dependent on China to take our surplus goods, and if they don’t have as many people, what are we going to do?” said Stephen Nicholson, executive vice president, global sector strategist-grains and oilseeds, Rabobank. “So that’s a concern for export markets.”

In contrast, India is expected to keep growing from 1.429 billion people currently to 1.67 billion by 2050. It is among the eight countries expected to account for more than half of the projected increase in global population up to 2050. Other countries include the Democratic Republic of Congo, Egypt, Ethiopia, Nigeria, Pakistan, the Philippines and Tanzania. 

Africa has the highest rate of population growth among major areas, the UN said. The population of sub-Saharan Africa is projected to double by 2050. 

“Regardless of the uncertainty surrounding future trends in fertility in Africa, the large number of young people currently on the continent, who will reach adulthood in the coming years and have children of their own, ensures that the region will play a central role in shaping the size and distribution of the world’s population over the coming decades,” the UN said.

Agriculture impact, response

Commodity markets are geared toward ever-increasing production, and every year record corn, soybean and wheat crops are needed just to keep up with demand, Penner said. 

“That’s a pretty well-established trend,” he said. “I don’t know if consumption will start dropping off relative to production, but it could just level off. What happens when we maybe don’t need record crops every year, but just the same as last year?”

Crop prices could start to suffer under heavy supply situations, Penner said. It would vary from year to year because there would be crop failures and also possible impacts on yields due to climate change.

“(Declining population) is something we can’t just ignore or hope will go away,” he said. “It’s something we need to keep an eye on and not just assume the narrative that it just keeps going higher forever. If we keep producing more and the food consumption part of it is not growing at the same rate, what do we do with that difference?” 

If economies are still growing and incomes are rising, there likely also will be a shift in the types of foods consumed. More meat consumption in developing economies could offset less meat consumption in developed countries.

Penner said the agriculture industry can prepare by identifying where the trends are most significant toward decreasing population, such as Europe and Japan.

“Actually pencil out what that is going to mean,” he said. “What kind of products are we trading into there now and how will it affect them? What other things can we possibly add to the mix or substitute. Italy may not be eating pasta at the same rate as they used to, but maybe they’re going to be eating more beans. We need to parse out what the changes might be on a country or regional level and then focus efforts on those types of things.”

If economies are still growing and incomes are rising, there likely also will be a shift in the types of foods consumed. More meat consumption in developing economies could offset less meat consumption in developed countries. 

“You might see more meat consumption, which requires more feed grain production,” Penner said. “That could maybe offset to some degree the fact that there are less mouths to feed.” 

Another solution could be focusing more on further processing, such as the meal from canola and soybean crushing, rather than just pushing it out the door at the lowest price. 

“Maybe it’s also looking at where production is most sustainable and where it is not sustainable,” Penner said.

Production will have to figure out how to be more efficient and what can be done from an input perspective to drive down the cost of production, said Rabobank’s Nicholson.

It’s possible the industry already has seen some cues about overproduction, Nicholson said, noting corn production in the early 2000s. 

Faced with very large corn supplies, the production of ethanol started increasing. The same thing is happening now with vegetable oil, he said. 

“Do we try to find more uses that aren’t necessarily food? I’m not saying it’s good or bad, but is that going to be needed in the future?” Penner said. 

Biofuels per capita consumption is going to increase around the world, Ehmke said. It’s likely that whatever is lost in terms of food consumption in some declining regions like China will be replaced with biofuels.

“It’s hard for me to have a long-term bearish outlook when it comes to declining population because so much of the ag commodities that we are producing are going to fill growing biofuels demand,” he said. 

Ethanol, renewable diesel and sustainable aviation fuel are going to continue to demand more commodities. As the world continues to grow economically, that means more transportation fuel demand, Ehmke said. 

Packaging materials, such as biodegradable and compostable items, could be another new use, Nicholson said, along with biochemicals. Some of the operating wet corn mills are like small chemical complexes, using starch slurry to produce amino acids, enzymes and biochemicals, he said.

“The petrochemical industry is going to have a lot of pressure on it to be more environmentally friendly,” Nicholson said. “I think there’s an opportunity because corn is so versatile.

“We have to make sure that we find those new products that need our products from an agricultural point of view. We need to be willing to be more innovative and take that risk.”

There are pockets of growth in terms of population and per capita consumption, Ehmke said, but they present some significant challenges. 

India has a diverse population that speaks many different languages and is still mostly rural, compared to China. It’s a democratic government, but it still has issues with corruption. The fertility rate at about two children per woman of childbearing age is much higher than China.

“It’s not a friendly business environment, and they are very protectionist, so it’s going to be harder to crack that market,” Ehmke said. “But there’s opportunity in India.”

He added that with a per capita GDP of $2,000 compared to China’s $12,000, there’s also room for economic growth.

“As per capita GDP increases, their caloric consumption increases so they demand more meat, dairy and eggs,” he said.

Similarly, Southeast Asia is a major growth spot, including the Philippines with a fertility rate of 2.7 and a per capita GDP of $3,500. Africa has similar potential but also has issues with corruption, and a lack of transparency and markets.

“I wouldn’t be too alarmist at this juncture about declining population,” Ehmke said. “There’s still growth both in terms of population and per capita GDP. The problem is trying to adapt to these extremely diverse regions of the world. China was so easy — over a billion people, most speak the same language and all under one government.

“Food companies are going to be focusing on a broad diversification away from China. You just simply can’t replace China with India. It’s going to be a multi-country, multi-region approach.”