The world tillage sector is changing before our eyes, a major international conference was told in London this week.

Brazil is now the largest agri-chemical market in the world. Meanwhile, the use of crops for energy has not just plateaued but is declining.

The United States has still not set the final conditions for the 2014 crop year, let alone 2015, while Europe is likely to reduce the targets for 2020 from 10% biofuels in transport by 2020 to somewhere around 6%.

The European crop most likely to be affected is oilseed rape, where up to two-thirds of European output has gone into biofuels over the last few years, with the residue going for animal feed.

The swing to biofuels is also being reversed as the price of oil declines and looks like staying down, at least in the short term.

Herbicides

Ironically, the use of genetically modified (GM) food technology, while it has greatly boosted tillage productivity in North and South America, means that a whole new herbicide regime has become necessary on farms for dealing with weeds that have become resistant to glycosphate (Round Up).

Nevertheless, BASF and Monsanto are co-operating on developing a Round Up resistant wheat. What its place will be in Europe is unclear given Europe’s confusion on the whole GM issue.

The conference heard forecasts that the present weak cereal prices and high stocks will force some of the “frontier” producers out of crops, not because the crops cannot be grown, but because in much of central Brazil, for example, it can cost as much as US$150/tonne to transport grain by road to the port. There is, in reality, no railway infrastructure.

A recovery in grain prices in the short term is dependent on a “weather event” in an important producing region.

Grain supply

For the longer term, we were again told that “the fundamentals are sound” with an increasing population wanting to eat more meat and consume more milk, but still the uncomfortable fact is that grain supply has always grown to meet and usually exceed the demand.