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Insights from OECD-FAO Agricultural Outlook 2026-2035.
Agriculture is entering an unusual growth cycle. Global production is expected to expand, diets are becoming more resource-intensive across much of Asia, and trade remains essential to balancing regional supply. Yet real international agricultural prices are projected to remain broadly stable or below current levels.
That combination matters. The next decade is unlikely to reward agricultural exposure simply because more food will be needed. The advantage increasingly shifts toward producing more from constrained assets while absorbing more volatility around them.
The OECD-FAO Outlook projects the gross value of agricultural production covered by the report to rise 13.3% by 2035, reaching about USD 4.01 trillion. But most of that growth will not come from adding land. Around 73% of additional crop production is expected to come from higher yields, with another 9% from greater land-use intensity.
The strategic story is therefore less about agricultural expansion than about a revaluation of productivity itself.
Productivity is becoming more valuable than acreage
For much of agricultural history, expansion meant securing more land, animals, or labor. That model is becoming harder to sustain where environmental constraints, competing land uses, and capital costs are rising.
Brazilian sugar offers a useful example. The sector remains globally advantaged, but its growth strategy is moving from horizontal land expansion toward what the Outlook describes as vertical yield optimization. Investment is shifting toward irrigation, biological pest controls, and drought-resistant “super-cane” varieties as sugarcane competes with more profitable soybean and maize production for land.
That is more than an agricultural technology story. It signals a change in asset economics. When another hectare is expensive or unavailable, the genetics, biological controls, irrigation systems, and data that improve the productivity of the existing hectare become increasingly valuable.
The same logic extends across crops and livestock. Agricultural labor productivity is projected to grow fastest in lower-middle-income economies, rising nearly 30% by 2035. Upper-middle-income economies gain about 19%, while high-income systems, already closer to the technological frontier, improve by only a little over 5%.
But there is a trade-off. Mechanization substitutes capital for labor, bringing depreciation, financing costs, and greater fixed-cost exposure. Productivity can rise while financial fragility rises with it. The Outlook explicitly cautions that highly mechanized systems can become vulnerable when large capital commitments coincide with falling prices or rising input costs.
The relevant question is therefore no longer simply how productive a farm or processor is. It is how much volatility that productivity model can absorb.
The center of agricultural growth keeps moving
The geography of incremental growth is also changing.
Asia-Pacific is expected to generate 57.5% of additional global agricultural output through 2035. India alone accounts for 25.6% of the increase, while China contributes 13.9%. Sub-Saharan Africa’s contribution rises to 15.6%, with Latin America and the Caribbean accounting for another 12.7%.
This is not simply population arithmetic. It reflects demographic expansion, urbanization, rising incomes, and lower starting productivity.
Lower-middle-income economies are expected to contribute roughly 39% of global agricultural consumption growth. Diets also change as purchasing power rises: greater consumption of meat, dairy, and fish increases indirect demand for feed crops. The Outlook projects global feed-protein use to rise 13.5% over the decade.
That does not mean every feed market accelerates. Protein-meal consumption is projected to grow only about 1.0% annually, well below the 2.3% annual growth of the previous decade. China is a major reason: livestock growth is slowing, and feed systems are becoming more efficient.
The distinction matters. Growing demand for animal protein does not translate into uniform growth across feed markets.
China itself increasingly resembles a mature demand system. Its population is declining slightly, per-capita food demand is more saturated, and feed efficiency is improving. China will remain central to global agricultural markets, but incremental growth is becoming more distributed across India, Southeast Asia, and other emerging economies.
Production, processing, and consumption do not move together. Growth in Indian or Southeast Asian demand does not necessarily create value locally if infrastructure or feedstock supply cannot keep pace. Equally, surplus regions such as Latin America can benefit from distant demand only if logistics remain reliable.
The next agricultural cycle is therefore being shaped as much by connectivity between growth regions as by growth itself.
Trade remains the buffer, but infrastructure determines how much of it works
Global agricultural trade has become one of the system’s main shock absorbers. Roughly 22-23% of agricultural production is now traded internationally, up from 16% in 2000, and that share is expected to remain broadly stable through 2035.
The apparent stability hides widening regional dependence.
Sub-Saharan Africa’s net imports of basic agricultural commodities are projected to increase 55% by 2035. Near East and North Africa rises 34%. In the latter region, imports could account for around 72% of agricultural consumption in calorie terms. Latin America remains the largest agricultural surplus region, while Europe and Central Asia continue building their export position.
The issue is that trade resilience is uneven.
The Outlook’s comparison between trade intensity and logistics performance shows that countries with stronger market access tend to participate more deeply in global agricultural trade. Transport infrastructure, storage, customs efficiency, and other logistics capabilities influence whether farmers and consumers can connect effectively to domestic and international markets.
Sub-Saharan Africa remains toward the lower end of both logistics performance and trade integration. Weak infrastructure and market access make it harder to connect producers and consumers to wider sources of supply when conditions deteriorate.
There is another layer that global commodity charts often obscure: the international price is not necessarily the economically relevant price.
Exchange rates, transportation and processing costs, tariffs, and the degree of local market integration determine how global prices reach individual markets. Currency depreciation can amplify a modest international increase. Poor infrastructure can prevent falling global prices from reaching local consumers or producers.
A broadly stable global commodity outlook can therefore coexist with severe local inflation, deteriorating margins, or distorted investment signals. For geographically distributed supply chains, local price transmission can matter as much as the benchmark itself.
Geopolitical risk increasingly arrives through inputs
The 2026 Middle East conflict illustrates how the agricultural system can be stressed without a direct disruption to food production.
The transmission mechanism runs through energy, fertilizer, transport, and household income.
In the Outlook’s adverse scenario, energy prices rise about 33% above baseline in 2026 and fertilizer prices rise 29%. Fertilizer use in low-income countries falls 5.1%, contributing to cereal production running about 2.3% below the baseline.
Higher-income systems absorb more of the shock through trade adjustments, inventories, and financial capacity. Lower-income markets have less room to do so. Domestic supply weakens just as higher food prices and slower income growth limit the ability to import the difference.
Viewed strategically, the decisive asset during a shock is not production capacity alone but buffering capacity: access to working capital, inventory, alternative suppliers, foreign currency, and efficient logistics.
Farm-income projections point in the same direction. Average gross agricultural income per worker is expected to rise around 9% by 2035. But historical variability implies a one-in-four probability that income ends up at least 12% below the projected baseline. In low-income countries, the downside could exceed 20%.
The baseline growth story remains intact. What changes is the value placed on surviving deviations from that baseline.
Technology is moving from automation toward biological precision
Agricultural technology becomes more interesting when viewed through variability rather than labor substitution alone.
Meat processing is a useful example. Biological inputs differ in shape, size, composition, and quality, making full automation harder than in conventional manufacturing. The Outlook describes an emerging Meat Industry 5.0 model in which robots handle repetitive processing while human operators remain responsible where biological variability, hygiene, and complex judgment matter.
Computer vision, AI models, connected sensors, and real-time data are already supporting classification, anomaly detection, traceability, and production decisions. On farms, precision-livestock systems can identify stress or disease earlier and optimize feeding.
This suggests a more useful innovation thesis.
The economic objective is not autonomous agriculture for its own sake. It is reducing variability in biological systems that cannot be fully standardized.
That does not make automation unimportant. It changes where automation creates the most value. Technologies that improve prediction, monitoring, feed efficiency, anomaly detection, and decision quality can support more stable output without requiring full autonomy.
The same principle extends back to capital discipline. Technology that increases output but creates excessive fixed-cost exposure may improve measured productivity while making the business more vulnerable. Technology that reduces uncertainty can improve both productivity and resilience.
Human capital is part of the productivity equation
An aging farming population creates a capacity problem that technology cannot solve independently.
New entrants tend to adopt modern technologies more readily, yet they face significant barriers to land, finance, advisory services, and market entry. Administrative complexity and income volatility make the sector harder to enter precisely when agricultural systems need new skills and operators.
Another constraint is the productivity lost to unequal access.
Women account for a substantial share of agrifood employment, particularly in Sub-Saharan Africa and Southern Asia, but remain disproportionately concentrated in lower-value activities and face greater constraints in access to finance, services, and international markets.
The Outlook cites FAO estimates that closing productivity and wage gaps in agrifood systems could increase global GDP by around 1% and reduce the number of food-insecure people by approximately 45 million.
These workforce questions are not separate from the productivity thesis. They determine how much of the theoretical technology and market opportunity can actually be converted into output.
Regulation is starting to choose which feedstocks keep their value
Agriculture is also becoming more tightly connected to transport and energy policy.
Global biofuel demand is projected to rise around 1.4% annually through 2035, with much of the incremental growth shifting toward middle-income economies such as Brazil, Indonesia, and India. High-income markets follow a different path as transport-fuel consumption declines and electric-vehicle adoption increases.
Europe illustrates how regulation can alter agricultural economics without changing the crop itself.
The Renewable Energy Directive limits the contribution of food- and feed-based biofuels and raises the target for advanced biofuels from 3.5% to 5.5% by 2030. Palm oil is currently classified as a high-risk feedstock under indirect land-use change rules, while the Outlook also notes a recent EU proposal that would classify soybeans as high-risk.
The potential second-order effects are significant because agricultural feedstocks sit across several markets simultaneously.
More than 40% of global soybean production was traded during the Outlook’s base period, and Brazil is projected to account for 61% of global soybean exports by 2035.
A change in eligibility for one energy market can therefore alter crushing economics, trade flows, vegetable-oil demand, and substitute-feedstock pricing elsewhere.
For globally traded feedstocks, regulation increasingly does more than add compliance cost. It can change which end markets a unit of output can economically serve.
The strategic shift is from scale to system quality
The broader picture is not one in which agricultural scarcity disappears. It is a change in where scarcity sits.
Land remains constrained. Labor is aging in many markets. Capital is becoming more important and more expensive to carry. Logistics determine how effectively trade can absorb regional imbalances. Currency movements can separate global benchmarks from local economics. Environmental regulation can alter feedstock eligibility. And technology creates the most value when it reduces biological and operational uncertainty, not simply when it replaces labor.
At the same time, production growth is expected to increase direct agricultural greenhouse-gas emissions by 6.5% through 2035, even as emissions intensity declines. Livestock accounts for roughly 77% of that increase and synthetic fertilizer about 23%.
That leaves a more demanding growth equation: more food and agricultural output, with less room for inefficient land use, fragile capital structures, labor constraints, excessive emissions, or unreliable infrastructure.
The systems best positioned for that environment are not necessarily those with the most land or the lowest nominal production cost.
Advantage increasingly sits where biological productivity, capital discipline, logistics, workforce renewal, and regulatory access reinforce one another.
That is the deeper signal in the 2035 Outlook: agriculture is becoming less of a commodity-volume story and more of a systems-performance story.
