June 3 (Bloomberg) -- Rising global production of wheat, soybeans and corn will decrease the U.S. share of world agriculture trade and may reduce the value of farmland, according to a study by Ohio State University.
"A declining competitive advantage for U.S. crops will ultimately reduce the relative advantage of U.S. farmland and thus the price it can command," Carl Zulauf and Nick Rettig, economists at Ohio State, said in a report May 31. Revenue per acre may drop amid falling prices and because of "relative yield declines. In short, the U.S. crop sector may be as vulnerable as it was in the late 1970s."
The Standard & Poor’s GSCI Agriculture Index of eight commodities has jumped 57 percent since the end of 2006 as global droughts and extreme weather hampered crops. U.S. farmland values rose to a record in 2012, the government said in August. Rising crop prices spurred global farmers to increase production, and the expansion in world acreage and yields from 2007 to 2011 exceeded gains in the U.S., the Ohio State economists said.
"The yield advantage of U.S. crops has been in a long-term decline," which is also magnified by rising global acreage, Zulauf and Rettig said. "This advantage has declined substantially since the late 1960s and has disappeared for wheat. In addition, average soybean yield over 2007-2011 was slightly higher in Brazil than the U.S."
U.S. wheat yields fell 3 percent below the rest of the world from 2007 to 2011, the report showed. That compares with a 44 percent advantage from 1968 to 1972. U.S. soybean yields were about 24 percent higher from 2007 to 2011, down from 86 percent. Corn yields averaged 2.43 times higher, down from 3.04 times.
From 2007 to 2011, U.S. farmers produced 8.9 percent of the global wheat crop, 35 percent of soybeans and 38 percent of corn. That’s down from 13 percent, 72 percent and 44 percent respectively from 1968 to 1972.
--Editors: Millie Munshi, Thomas Galatola
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