FCA – ORP – AEPT October 24, 2016 1

The Malthusian Miscalculation:

A World Awash in Grains and Soybeans Economic Report

Office of Regulatory Policy

Agricultural and Economic Policy Team 

October 24, 2016

Summary

Grain and soybean prices have 

dropped sharply since their peak in 

2012. One factor contributing to 

their decline has been a significant 

overhang of stocks due to record 

large crops.

Global production of corn, soybeans, 

and wheat have increased substantially since 2005 because of higher 

yields and increased area harvested. 

Since 2005, yields have increased 14 

to 19 percent for these crops. And 

harvested acres have increased 23 

percent for corn and 31 percent for 

soybeans but only 1 percent for 

wheat.

The United States and China produce 

about 60 percent of the world’s corn 

crop, while the United States, Brazil, 

and Argentina grow over 80 percent 

of the world’s soybeans. The EU, 

China, and India account for nearly 

half of global wheat production.

World production of these crops has 

exceeded consumption in 8 of the 

past 12 years, leading to the large 

supplies we have today.

Studies indicate that the outlook for 

feeding the world’s growing population is favorable given continued 

gains in productivity.

Author: Stephen Gabriel,

Chief Economist 

(703) 883-4056

The prices of grains and soybeans have declined sharply in recent years. 

Since peaking in 2012, corn and wheat prices have declined over 50 percent and soybean prices have dropped nearly 40 percent. See figure 1.

Factors contributing to this sharp drop in grain prices include the leveling 

off of the growth in demand for corn for ethanol production, slowing world 

economic growth, and a significant increase in the global production of 

grains and soybeans.

Figure 1. Crop Prices Adjust to Reflect Supply and Demand Conditions

Average U.S. Farm Price Per Bushel ($)

Corn Soybeans Wheat

16.00

14.00

12.00

10.00

8.00

6.00

4.00

2.00

0.00

2000/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

Source: USDA

In 1798, in “An Essay on the Principle of Population,” Thomas Robert 

Malthus famously wrote, "The power of population is indefinitely greater 

than the power in the earth to produce subsistence for man."

Of course, Malthus could not have anticipated the improvements in plant 

genetics that plant breeding and biotech developments have made possible; these have contributed to the growth in yields around the globe. Also, 

in addition to the increased mechanization of agriculture, the use of “Big 

Data” and geo-positioning technology has also begun enhancing productivity in ways that could not have been predicted over 200 years ago.

It is reasonable to expect that global production capacity will continue to 

grow as crop science advances and more productive technologies become 

more widespread.

This report will focus on the recent growth in the production of corn, 

wheat, and soybeans. It will discuss the increase in yields and area harvested, and it will identify the countries experiencing the greatest growth.
FCA – ORP – AEPT October 24, 2016 2 

Global soybean and corn production has grown 

rapidly since 1990; wheat lags Figure 2. Crop Production Has Grown ConsiderablySince 1990

Source: USDA, FAS

The global production of soybeans has more than 

tripled since 1990, increasing from 104.3 million 

metric tons in 1990 to 333 million metric tons in 

2016. Since 2005 soybean production has grown 

about 50 percent.

Corn has a similar, if not quite as dramatic, story. 

Worldwide corn production has more than doubled 

since 1990, increasing from 482 million metric tons 

to over a billion metric tons in 2016. The increase 

since 2005 has been about 47 percent.

Wheat production, however, has not experienced 

the rapid rise that corn and soybeans have had. 

Wheat production had little, if any, growth from 

1990 to 2003. Since 2005, global wheat production 

has increased about 20 percent.

Figure 3. Corn and Soybeans Area Harvested Has Grown Considerably in Past 25

Years; Not So For Wheat

Source: USDA, FAS

Wheat area stagnates as corn and soybeans grow 

Global wheat area harvested has increased only 

about 1 percent since 2005. However, corn and soybean areas have grown 23 percent and 31 percent, 

respectively, during this period. In the United States, 

improved genetics of corn and soybeans, as well as 

the introduction of biotech varieties, has allowed 

these crops to be planted further north and west, 

leading to expanded harvested area. Corn and soybean area is frequently expanded at the expense of 

wheat because corn and soybeans are more profitable. This is likely the case in other countries as well.

Yield improvement has also contributed to the 

growth in production worldwide

Improved seed and agronomic practices have led to 

steady increases in yields for corn, soybeans, and 

wheat. Since 2005, yields have increased 19 percent 

for corn and wheat and 14 percent for soybeans. So 

despite almost no increase in wheat area harvested, 

higher yields have resulted in greater production of 

this important food grain.

1,000 Metric Tons

1,200,000

1,000,000

World Corn Production

WorldSoybeanProduction

World Wheat Production

800,000

600,000

400,000

200,000

0 

1,000 Hectares

250,000

200,000

150,000

100,000

50,000 World Corn Area Harvested

 World Soybeans Area Harvested

 World Wheat Area Harvested

0 

Figure 4. Global Yields of Corn, Soybeans and Wheat Have ImprovedSteadily

Source: USDA, FAS

Yield (metric tons per hectare)

7

6

5

4

3

2

1

 World Corn Yield

 World Soybean Yield

 World Wheat Yield

0
FCA – ORP – AEPT October 24, 2016 3 

World corn supplies are ample Figure 5. Global Corn Stocks/Use Ratio is The Highest in Fifteen Years

Source: USDA, FAS

Good weather conditions in the United States and 

around the world have led to large corn crops and 

substantial supplies relative to use. In the 2016/17 

crop year, the global stocks-to-use ratio stood at 

nearly 22 percent, its highest level in 15 years.

It’s been four years since the 2012 U.S. drought and 

one can reasonably expect that poor weather will 

occur in the United States or some other major 

production region sometime in the next few years. 

This would likely pull supplies down and, if severe, 

could cause a spike in prices. However, as we have 

seen in the recent episode, farmers have the capacity to ramp up production and replenish supplies 

quickly.

The U.S. and China are the dominant corn 

producers

Figure 6. The U.S. and China Are The World's Leading Corn Producers

Source: USDA, FAS

The United States and China account for nearly 60 

percent of the corn produced in the world. The 

United States is also by far the world’s largest 

exporter of corn, followed by Brazil, Argentina, and 

Ukraine. In 2016, the United States is projected to 

produce about 382 million metric tons of corn. This 

is followed by China with 216 million and Brazil with 

83 million. Despite its large corn crop, China exports 

very little corn each year.

Both yields and area harvested have increased in 

many countries

Many countries responded to the run-up in grain 

prices that began in 2006 by increasing the amount 

of land planted to corn and other grains and oilseeds. This was particularly true in Russia and 

Ukraine where corn area harvested increased 250 

percent and 156 percent, respectively. World corn 

area harvested increased 34.6 million hectares from 

2005 to 2016. China accounted for 28 percent of the 

increase, followed by Brazil with 13 percent and the 

United States with 10 percent.

Figure 7. Both yield and area have increased in most leading corn 

producing countries

Source: USDA, FAS

Yields also rose during this period. For the 10 

leading producers, the growth in yields ranged from 

5 percent in the European Union to 42 percent in 

Ukraine and 57 percent in Brazil.

300%

Percent Change in Corn Yield 2005-2016 250%

250%

Percent Change in Corn Area Harvested 2005-2016

200%

156%

150%

100% 84%

57% 57%

50% 37%

13%

42%

26% 33% 25% 25% 31%

18% 15% 17% 19%

5% 7%

0%

-8%

-50%

United

States

China Brazil European Argentina Ukraine India Mexico Russia South

Union Africa

35%

30%

25%

20%

15%

10%

5%

0%

Percent of World Corn Production, 2016

40%

37%

35%

30%

25%

21%

20%

15%

10% 8%

6%

5% 4% 3% 2% 2% 1% 1%

0%

United

States

China Brazil European Argentina Ukraine India Mexico Russia South

Union Africa
FCA – ORP – AEPT October 24, 2016 4 

Global soybean stocks/use ratio down from recent 

highs Figure 8. Global Soybeans Stocks/Use Ratio Down on Strong Demand

Source: USDA, FAS

The 2016 soybean stocks/use ratio is down from the 

high level reached in 2014 and a few previous years 

thanks to strong demand from China. However, supplies relative to use are still quite high compared to 

the 1980s and 1990s.

China is, by far, the world’s largest consumer of soybeans, with domestic consumption accounting for 

about 30 percent of total world consumption as well 

as about 30 percent of total world production. China 

imports soybeans to make soybean meal for feed 

for its hog and poultry sectors and soybean oil for 

cooking.

The U.S., Brazil, and Argentina are the leading 

producers and exporters of soybeans Figure 9. The U.S., Brazil and Argentina Account For Over 80 Percent 

of Global Soybean Production

Source: USDA, FAS

The United States, Brazil, and Argentina account for 

more than 80 percent of global soybean production. 

They also dominate soybean exports, with Brazil taking over the number one position from the United 

States in 2012.

Soybean yields and area increased in most topproducing countries

Soybean area harvested has increased 28.7 million 

hectares since 2005. Brazil accounts for about 40 

percent of this increase, with the United States, 

Argentina, and India contributing another 44 percent. Ukraine added about 1.4 million hectares to 

soybean area, resulting in a huge percentage rise. 

Soybean production in Ukraine has risen sharply to 

meet the country’s growing demand for feed for its 

expanding livestock industry, primarily hogs and 

poultry. Soybean area in Uruguay began growing 

rapidly in the early 2000s from fairly low levels 

because of high soybean prices in the mid-2000s 

and investment by Argentine producers.

Figure 10. Soybean Yields Have Risen in Most of the Leading 

Producer Countries

Source: USDA, FAS

Among the top-producing countries, yield increases 

from 2005 to 2016 have ranged from 4 percent in 

China to 77 percent in Paraguay. Yields declined a 

bit in India and Canada during this period.

30%

25%

20%

15%

10%

5%

0%

Percent of World Soybean Production, 2016

40%

35% 35%

31%

30%

25%

20% 17%

15%

10%

5% 4% 3% 3% 2% 1% 1% 1%

0%

United Brazil

States

Argentina China India Paraguay Canada Ukraine Bolivia Uruguay

400%

350% Percent Change in Soybean Yield 2005-2016

Percent Change in Soybeans Area Harvested 2005-2016

336%

300%

260%

250%

200%

150%

100% 89% 77%

52% 46% 50% 50% 43% 28%

17%17% 17% 10%

32%

15% 22%

4%

0%

-6% -2%

-50% -26%

United Brazil Argentina China India Paraguay Canada Ukraine Bolivia Uruguay

States
FCA – ORP – AEPT October 24, 2016 5 

Global wheat supply relative to use is at its highest 

level in 15 years

Total global ending stocks of wheat are projected to 

be about 248 million metric tons in 2016, with China 

accounting for 48 percent of the total, followed by 

the United States with 12 percent. Global wheat 

stocks have grown about 62 percent since 2005, led

by China, the United States, and India. China maintains large supplies of wheat to ensure its food security. The largest consumers of wheat are the EU at 18 

percent, China at 16 percent, and India at 13 percent 

of world consumption.

Figure 11. World Wheat Stocks/Use Ratio At a 15 Year High

Source: USDA, FAS

Nearly half of the global wheat crop is produced in 

the EU, China, and India

The EU, China, and India have consistently been the 

first-, second-, and third-largest wheat producers in 

the world for at least the past 15 years. Since 2005, 

wheat production has increased considerably in 

Russia and the Black Sea region. Wheat production is 

up 51 percent in Russia and roughly 45 percent in 

Ukraine and Kazakhstan. Both China and India have 

seen wheat production rise 31 percent during this 

period.

Figure 12. The EU, China and India Account for Nearly Half of Global 

Wheat Production

Source: USDA, FAS

In 2016, Russia, the United States, the EU, Canada, 

and Australia are projected to be the leading wheat 

exporters, in that order. They will account for 71 percent of global wheat exports.

Several leading wheat-producing countries 

experienced much higher yields since 2005 

Improved plant genetics, combined with better and 

more intensive farming practices, has resulted in 

much higher yields in Russia and Ukraine. China has 

also had increased wheat yields since 2005. In fact, 

China’s wheat yields are among the highest in the 

world, second only to the EU. China is able to achieve 

these high yields through extensive irrigation.

Figure 13. Wheat Yields are Up Substantially in Several Top 

Producing Countries

Source: USDA, FAS

Globally, there are about 222 million hectares of 

wheat projected to be harvested in 2016, up just 4.6 

million from 2005. Of the top-producing countries, 

India experienced the greatest growth in wheat area 

since 2005, up 15 percent. India also has the most 

wheat area at 30 million hectares, followed by the 

EU, Russia, China, and the United States.

Global Stocks/use Ratio

40%

35%

30%

25%

20%

15%

10%

5%

0%

Percent of World Wheat Production, 2016

25%

20% 20%

17%

15%

12%

10% 10%

8%

5% 4% 4% 4% 3%

2%

0%

European China

Union

India Russia United Canada Australia Ukraine Pakistan Turkey

States

55%

Percent Change in Wheat Yield 2005-2016

Percent Change in Wheat Area Harvested 2005-2016 46%

45%

40%

35%

26%

25% 23%

20%

15% 15% 15% 10% 8%

5% 7% 6% 6%

5% 4% 4% 3%

-5% -2% -1%

-9%

-15% -12%

European China

Union

India Russia United Canada Australia Ukraine Pakistan Turkey

States
FCA – ORP – AEPT October 24, 2016 6 

Has production kept up with growing 

consumption? Figure 14. Production Exceeded Consumption in 8 Out of the Past 

12 Years

Source: USDA, FAS

1,000 Metric Tons

1,200,000 World Corn Production World Soybean Production World Wheat Production

World Corn Consumption World Soybean Consumption World Wheat Consumption

1,000,000

800,000

600,000

400,000

200,000

0

Since 2005, the production of corn, 

soybeans, and wheat has exceeded 

consumption in 8 out of the past 12 

years. The excess production did not 

occur during the same years for each 

crop. Nevertheless, since 2005, cumulative global production has exceeded 

consumption by 129.7 million metric 

tons for corn, 35.8 million metric tons 

for soybeans, and 131.8 million metric tons for wheat, leading to the 

large supplies we have today.

Can future production satisfy the 

demands of 9 billion people in 2050?

The short answer is a qualified yes

based on expectations of continued

gains in productivity. It’s a qualified

yes because there are risks associated with any long-term projection. However, studies conducted over the past few 

years point to the likelihood that we will produce enough food to feed a growing world population.

A 2012 Food and Agriculture Organization (FAO) study indicated that about 85 percent of the increased production 

over the next 40 years will come from improved yields.1 

1 Food and Agriculture Organization. Agricultural Economics Development Division. 2012. Summary, 

FAO acknowledges that there are risks associated with its 

projections but concludes that “evidence cautiously suggests that, at the global level, agricultural production can be 

increased enough to satisfy the additional demand projected to 2050.” FAO assumes there will be sufficient investment 

and policy support in the agricultural sector to enhance yields and provide for needed infrastructure and institutions.

Nevertheless, there will still be areas of undernourishment in the poorest countries.

Another 2014 study by the Australian Centre for International Agricultural Research concluded much the same.

According to the study’s authors, “no calamity is foreseen—but there is no room for complacency, especially of the 

kind invoked by some advocates of biotechnology. Multidisciplinary agricultural science remains the key to success. 

With complementary investment in infrastructure and institutions, and relative freedom from civil unrest, the world 

should manage to sufficiently feed its growing population.”2

2 Fischer R.A., Byerlee D. and Edmeades G.O. 2014. 

Concluding remarks

The ghost of Malthus continues to lurk in the halls of some organizations. And his followers emerge from time to time 

to warn us of our impending doom. But the ingenuity of humanity continues to provide the technological advancements necessary to feed our growing population.

World Agriculture Towards

2030/2050: The 2012 revision.

Crop yields and global food security: Will yield increase continue to feed the

world? ACIAR Monograph No. 158. Australian Centre for International Agricultural Research: Canberra. xxii + 634 pp.