Top Agricultural Producing Countries

By Stephen D. Simpson, CFA | June 15, 2012 AAA

Food drives the world; apart from clean water, access to adequate food is the primary concern for most people on earth. This makes agriculture one of the largest and most significant industries in the world; agricultural productivity is important not only for a country's balance of trade, but the security and health of its population as well.

With that in mind, which countries produce the most agricultural products, which countries export the most, and what are countries around the world doing to increase their production levels?

SEE: Grow Your Finances In The Grain Markets

Top Producers
There are numerous ways of assessing agricultural output, including sheer tonnage and the dollar volume of the commodities produced. It's important to look at both, as it is often the case that commodities critical to the food supply of less-developed countries don't show up as high dollar-value crops.

Of the major cereal and vegetable crops, the United States, China, India and Russia frequently appear as leaders. It probably won't surprise readers that China is the leading worldwide producer of rice, but it's also the leading producer of wheat and the number two producer of corn, as well as the largest producer of many vegetables including onions and cabbage. In terms of total production, the United States is third in wheat and first in corn and soybeans.

There are other important crops, however. Millet is a major crop in much of Africa and Asia, and India and Nigeria are the leading producers. Likewise, barley, rye and beans/pulses are not that important within the United States, but are crucial crops in countries like Russia, Germany and India. Below are a few 2010 numbers based on crops and countries.

Corn:

Country Production (Mt)
United States 316.2
China 177.5
Brazil 56.1

Rice:

Country Production (Mt)
China 197.2
India 120.6
Indonesia 66.4

Wheat:

Country Production (Mt)
China 115.2
India 80.7
United States 60.1

SEE: The Biofuels Debate Heats Up

Top Exporters
It should not be too surprising that countries like China and India feature prominently on the lists of top agricultural producers; these countries have large populations and internal food security (that is, producing enough to feed a nation's population from internal resources) is a major priority. A great deal of this production is used internally, though, and the list of the top exporting countries looks much different.

Country Exports (in billions)
United States $118.3
Netherlands $79
Germany $70.8
France $68
Brazil $55.4

Here, again, it is important to note the difference between volume production and high-value production. The Netherlands is a tiny country; its presence on the list is to the high value of flowers and live plants (the Netherlands supply two-thirds of the global total) and vegetables (the Netherlands is a leading supplier of tomatoes and chilies).

When it comes to the staples that feed the world (rice, corn, wheat, beans, lentils and animal proteins), countries like the United States, Germany, Canada, Brazil and Thailand feature more prominently.

Commodity Leading country % of Global Exports
Corn United States 50.1% ($9.1 billion)
Fish China 9.2% ($6.6 billion)
Palm Oil Indonesia 51% ($10.4 billion)
Rice Thailand 34.5% ($6 billion)
Soybeans United States 50.5% ($16.5 billion)
Wheat United States 18% ($5.4 billion)


How Will the World Make More?
Almost every country wants to increase its agricultural productivity, but how they intend to go about that varies greatly with the country or region in question.

In countries like the U.S., Canada and Western Europe, there is very little land allowed to go to waste and infrastructure like roads is well-developed. Likewise, irrigation is widespread and farmers use fertilizer extensively. This has led many countries and farmers to turn to genetically modified seeds to increase yields and reduce the need for costly (and potentially polluting) fertilizer and herbicides.

The picture is much different in Africa and much of South Asia. In these areas, infrastructure is extremely under-developed and simply getting crops to market (or inputs like fertilizer to the farms) can be a struggle. Likewise, irrigation infrastructure is lacking, leaving farmers much more exposed to the variability of weather. Not surprisingly, then, a large focus of governments in these countries is to try to build roads, improve access to water and encourage the use of inputs, like fertilizer.

SEE: Build Your Portfolio With Infrastructure Investments

The Bottom Line
Although agriculture is no longer a major employer in North America or Europe, and food security is not a preeminent problem for most citizens, it is still a globally vital industry. As investors saw a few years ago, bad weather and low inventories quickly led the prices of many food commodities to soar and led to riots and political disturbances in many countries. On a more positive note, it's a major source of export earnings for countries across the development spectrum.

Given the importance of agriculture and the importance of increasing yields, companies that facilitate higher production should find their products in increasing demand. Whether it's agricultural equipment like tractors, inputs like fertilizer and herbicide, or higher-yielding modified seeds, companies serving the global agriculture market have a large and still under-served market to address.

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