Fueling Agriculture: Biofuels as the Catalyst

June 16, 2026

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(S&P Global Energy) ... Agriculture stands at a crossroads -- Technology and innovation have enabled US farmers and ranchers to supply more food and fuel than ever before—a trend that promises to accelerate as artificial intelligence (AI) powers advances in seed technologies, crop protection, regenerative farming practices, and digital agriculture.

In 2025, the US experienced another record-breaking harvest, extending the largest-ever surplus of grains and oilseeds. Similar trends are being observed globally. For perspective, world corn yields have increased 1.5% per year over the past decades, helping push global grain, oilseed and fiber stocks to nearly 1 billion metric tons in 2025.

At the same time, global demand has failed to keep pace with rising production. Population growth is decelerating, along with per capita food consumption. For example, global per capita meat consumption growth slowed from around 2.4% since the late 1990s to 0.7% by 2025 and is expected to grow just 0.1% toward 2050, indicating near-saturation in many markets.

Biofuel demand faces similar pressures amid vehicle efficiency gains, changing driving patterns, and increased reliance on electric vehicles. At current blend rates (around 10%), US ethanol demand for on-road transportation fuels could fall nearly 50% (to ~6.6 billion gallons) by 2050.

The imbalance between supply and demand has already emerged as a major long-term challenge for the US farm economy. According to the latest US census data, the farm sector lost 209,000 farms and 58 million acres over 2002-2022. The loss was the greatest from 2017 to 2022, with 20 million acres lost. Absent new sources of feed demand and in a scenario in which the US maintains a 10% ethanol blend rate, US corn growers would cultivate roughly 31% fewer acres by 2050, equivalent to halting production on a land mass the size of North Carolina. Under this scenario, loss of agricultural capacity would expose farmers and consumers to increasingly volatile markets for both food and fuel and would highlight the structural risks associated with stagnant biofuel demand.

In response, stakeholders need to explore new pathways to reignite growth in farm communities, drive innovation, and expand agriculture’s capacity to feed and fuel the world using fewer resources. Under a scenario where biofuel demand expands, US agricultural production remains strong and continues to serve as a secure, ample, and reliable long-term supplier of corn, ethanol, and other agricultural products to domestic and international markets.

In this context, biofuels stand out as a uniquely powerful catalyst with the potential to:

1. Restore long-term profitability to American farms and drive investment in rural communities

2. Unlock demand for sustainable feedstocks, creating a market that rewards farmers for pioneering modern farm practices

3. Strengthen food, economic and energy security on a global scale

To inform an evidence-based discussion on agriculture’s full potential, this S&P Global Energy study combines proprietary datasets, quantitative modeling, and scenario analysis with real world insights from leading participants across the agribusiness and biofuels value chain. In total, more than 25 interviews were conducted with farmers; input and technology providers; grain and oilseed processors; biofuel producers; trade organizations; market experts and academics to validate assumptions and ground the findings in real world conditions.

Within this context, the study challenges outdated assumptions about competition between food and fuel, as traditional demand is no longer sufficient to absorb rising productivity. It also shows how agriculture can meet rising demand for renewable energy through technologydriven advancements.

Based on current and emerging trends, the next wave of agricultural productivity will be driven by stacked technologies. The convergence of biotechnology, AI, and advanced data analytics could lift US corn yields by 1.6% annually through 2050, unlocking nearly 50% more production without expanding acreage - provided farmers have the incentive to invest in new technologies.

Under this optimized scenario, global biofuel output would triple or more by 2050. In addition, biofuel production generates valuable co-products (protein meals and DDGS) that are returned to the food system. Relative to 2025, this scenario delivers 45% higher food and feed supplies— a meaningful increase that could help reduce input costs and strengthen food availability globally. Importantly, these production gains are achieved through improved yields and more intensive use of existing farmland, not broad land expansion, demonstrating that biofuel growth can be realized without deforestation.

At the same time, renewable fuels could supply a growing share of the ~940 -billion-gallon liquid fuel market, yielding lower finished fuel costs for consumers. Further, recent periods of elevated oil and gasoline price volatility (e.g., Strait of Hormuz crude oil supply disruption, Russia’s invasion of Ukraine ) underscored the vulnerability of fuel markets to global supply disruptions and geopolitical risk and reinforced the role and stability that biofuels, as a domestically produced renewable energy source, provide to moderate price volatility and strengthen energy security.

Ultimately, this report illustrates how biofuels can unlock new demand for agricultural commodities while helping meet food, energy, and climate goals - a win‑win for rural economic development and the global clean energy. READ MORE

Contents

About S&P Global.................................................................................................................. 3

S&P Global study acknowledgments.................................................................................... 4

Executive summary.......................................................................................................5

Introduction ..................................................................................................................7

Agriculture stands at a crossroads as it enters a period of structural transition.........9

1. Global population growth is decelerating.....................................................................10

2. Food consumption growth is slowing............................................................................10

3. Biofuel demand, particularly ethanol, is under pressure ..............................................11

4. Agricultural yields are outpacing food and fuel demand..............................................12

5. The risk of prolonged agricultural downcycle and spillover effects ............................13

Unlocking agriculture’s potential for growth.............................................................. 15

1. Technology at the center of unlocking agriculture’s potential .................................... 17

2. Future frontier: Expanding biological potential............................................................18

3. Closing crop yield gaps: Not a technical, but an economic challenge ......................... 21

4. Empowering 1 billion farmers globally...........................................................................23

The path forward with biofuels as a catalyst for agricultural growth ........................25

5. The US case: Biofuels driving agricultural growth and market resilience................... 26

6. Policy frameworks supporting biofuel deployment and agricultural resilience ......... 28

7. Biofuel blend rates suggest significant market potential for agriculture .................. 30

8. Unlocking new opportunities in biofuel, food and feed supply ....................................32

9. Biofuels as a catalyst to preserve crop acreage.......................................................... 34

10. High biofuel growth would deliver measurable benefits ............................................. 35

Conclusion ..................................................................................................................38

Appendix A. Glossary ................................................................................................. 40

S&P Global Energy project team ......................................................................................... 41

READ MORE

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Excerpt from Western Producer: Agriculture is at a dangerous crossroads, says the chief executive officer of U.S. Farmers and Ranchers in Action.

“There are some people who think where we are now is very similar to what happened in the 1980s when 300,000 U.S. farmers defaulted on their loans,” Kevin Burkum said during a webinar introducing a new study authored by S&P Global Energy.

“(That) created a rural recession that lasted a generation.”

Kevin Lindemer, a vice-president with S&P, said the key take-home point of the Fueling Agriculture: Biofuels as the Catalyst report is that the world is transitioning into a demand-limited market.

Population growth is slowing. The annual global growth rate is expected to decline to 0.4 per cent by 2050, down from about 1.4 per cent at the start of this century.

Fertility rates in most high-income economies are already below replacement levels.

China’s population has peaked, and the country is expected to lose about 10 million people per year through 2050, said Lindemer.

Slowing global population growth has profound implications for agriculture.

Per capita meat consumption is expected to grow at a rate of 0.1 per cent per year by 2050, down from 2.4 per cent in the late 1990s, indicating near-saturation in many markets.

Meat demand drives growth in feedgrain and oilseed consumption.

That is problematic because corn yields have been increasing at a rate of 1.5 per cent per year for decades.

And there are further increases on the way. The next wave of agricultural productivity will be driven by stacked technologies — the convergence of biotechnology, artificial intelligence and advanced data analytics.

That is expected to lift U.S. corn yields by 1.6 per cent annually through 2050, resulting in 50 per cent more production without expanding acreage.

Lindemer remembers as a kid growing up on a farm in Minnesota when a 125 bushel per acre corn crop was considered good. Today’s yield contest winners are harvesting nearly 600 bu. per acre.

...

So where will that demand come from in an environment of slowing global population growth and meat consumption? The hope is that biofuel will provide the answer.

...

The authors of the study were asked what would happen if there is no increase in biofuel demand.

Juan Sacoto, global head of agribusiness consulting with S&P, said one of the big takeaways from the study is there’s not enough food demand to support agriculture.

He noted that 10 or 15 years ago, everyone was fretting about whether there would be enough food to feed the world.

Sacoto said that is no longer an issue. The challenge has shifted to, how are you going to keep farmers farming?

If there is no increase in biofuel demand, the United States is going to lose about 30 million acres of corn by 2050. READ MORE

Excerpt from Agri-Pulse: As U.S. agriculture and biofuel producers look to the sky for new market opportunities, the outlook for sustainable aviation fuel is cloudy. Just a few years ago, the nascent industry was buzzing with announcements of projects and investments. The market is quieter of late. The Trump administration hasn't embraced former President Joe Biden’s “SAF Grand Challenge,” which calls for the country to make 3 billion gallons of lower-emitting jet fuel by 2030. And Congress last year slashed the 45Z tax credit for SAF production from $1.75 a gallon to $1 a gallon, putting it at the same level as renewable diesel, which competes for many of the same key feedstocks. “We've had a lot of headwinds on the SAF side over the last few years,” Kevin Lindemer, head of the Americas Downstream Consulting practice at S&P Global Energy, said at a briefing Tuesday while releasing a report on how markets like SAF are crucial for grain and oilseed farmers grappling with excess supply and weakening demand. READ MORE

Excerpt from Moose Jaw Today: More crops will likely go into biofuel as we transition to a lower carbon future, but the trend will end as ultimately the electrification of transport and industry greatly reduces the demand for liquid fuels.

The paper was prepared for U.S. Farmers and Ranchers in Action, an umbrella organization created and supported by crop and livestock grower groups, food processors and agricultural input and equipment companies.

It is a reversal of much of the thinking of the last 20 years, when agriculture thought leaders around the globe expected rising prosperity in formerly poor countries would drive up food demand at a time when climate change increased the chance of crop failures.

Big investors, from billionaires to pension funds, bought into the food scarcity argument and scrambled to get into agriculture, buying land and investing in farm supply companies hoping to reap profits.

Some events seemed to support this thinking. Crop prices spiked during the commodity boom of 2005-15 and again when Russia invaded Ukraine.

But now the S&P Global Energy paper says scarcity is over.

...

These yield increases will advance beyond current users. China in particular is adopting genetically modified crops now.

...

Those were the days when Willy Nelson started the Farm Aid concerts and when Hollywood made hit movies such as Country, starring Jessica Lange, which told the story of efforts to save a family farm.

The pain was felt north of the border too, with Farmland Security Boards busy, pressure on Canadian governments to match American massive farm bailouts and the U.S. and European Union essentially in a farm subsidy trade war.

A range of things happened to pull agriculture out of that depression, including lower interest rates, World Trade Organization rules expanding to include agriculture and the reforms in China that sparked a boom propelling a billion people from poverty toward a developed world lifestyle.

Another thing that helped the agricultural economy was the creation of the U.S. ethanol industry.

That has grown to the point where 36 per cent of the U.S. corn crop is processed into ethanol and distillers grain.

The corn that would have burdened the well-supplied export market now stays home, generating economic activity in rural areas.

Other biofuel, with feedstocks from corn, wheat, sugar cane and vegetable oil, have been established in many areas of the world.

But globally, biofuel represents only 3.2 percent of liquid fuel demand, according to the S&P Global Energy paper.

Environmental rules are pushing biofuel into aviation and marine fuel, but the paper argues that with the right policies, biofuel could become a much bigger part of the world’s liquid fuel supply.

This would lower greenhouse gas production and create a growing market for the rising yields that new technology will bring.

It is a compelling argument, but it must also be assessed against another way the world is changing.

Policy changes have stalled the trend to electric vehicles in North America, but the pace is quickening elsewhere, and that is expected to lower liquid petroleum fuel use.

The rising adoption of electric vehicles in China is one reason its petroleum demand is expected to fall by almost five percent this year.

Its petrochemical industry is also changing to require less petroleum.

Its huge EV manufacturing capacity is turning out cheap but reliable vehicles exported to Asian neighbours and South America.

This year, as the Strait of Hormuz closure spiked fuel higher, new vehicle buyers increasingly chose EVs and hybrids.

BloombergNEF’s annual Electric Vehicle Outlook expects 27 per cent of cars sold globally in 2026 to be electric, up from nine percent five years ago, and 52 per cent of all passenger vehicle sales to be electric by 2035. READ MORE

Excerpt from U.S. Farmers and Ranchers in Action/Agri-Pulse: American agriculture is facing a moment of reckoning. Crop yields are surging, harvests are hitting record highs, and yet the farmers and ranchers who feed this nation are struggling to keep the lights on.

This irony of abundance is playing out across rural America: the more our fields produce, the smaller producers’ profit margins become. Commodity prices have flattened; margins continue to shrink, and the echoes of the 1980s farm crisis are getting harder to ignore.

The solution to these issues, then and now, may lie in biofuels. When expanded markets for bioenergy helped rescue American agriculture a generation ago, they did more than restore farm profitability — they drove investment, expanded capacity, and positioned U.S. agriculture as a force that could both feed and fuel the world.

A groundbreaking new study from S&P Global Energy, commissioned by U.S. Farmers and Ranchers in Action (USFRA), offers evidence that biofuels have the potential to do this again. It shows that closing today’s widening demand gap, accelerating energy innovation, and building markets that reward farmers for doing the demanding work of producing more with less could all be possible with biofuels.

Agriculture’s moment: The biofuel opportunity

The challenges facing American agriculture are real and urgent — but so are the opportunities. The industry possesses something no other sector can claim: the ability to address society’s most pressing challenges, all at once.

Expanded demand for renewable fuels would help stabilize commodity prices, providing relief for lower-income consumers and communities hit hardest by food and energy cost volatility. At the same time, global biofuel output could triple by 2050, supplying a new generation of renewable products, including sustainable marine and aviation fuels that the global economy increasingly demands.

Most importantly, a robust biofuel market would unleash the kind of sustained investment that modern agriculture desperately needs — investment in precision farming, higher-yield crop varieties, and conservation practices that can boost productivity while reducing the environmental footprint of every acre farmed. According to S&P Global Energy’s report, in a high-growth scenario, the U.S. alone has the potential to increase corn yields by approximately 1.6% annually, driving a 50% jump in production on existing cropland by 2050.

In concrete terms, the research illustrates how greater biofuel consumption could reverse the troubling decline in working farmland, accelerate the broader energy transition, and eliminate the most serious risks to the long-term food supply.

What the research reveals: A data-driven case for biofuels

The study, “Fueling Agriculture: Biofuels as the Catalyst,” identifies three structural trends converging to create today’s agricultural crisis.

1) Population growth has begun to slow and is expected to reach ~0.4% by 2050.

2) Gasoline demand is declining as vehicle efficiency improves and demographics shift.

3) Agriculture yields are outpacing food and fuel demand. Farmers are producing more bushels per acre than markets can absorb.

The result is a persistent oversupply that is hurting commodity prices and pushing farm margins to the breaking point.

The study is clear about what happens without intervention: lower prices, reduced planting areas, slower technological progress, and a significant drop in farm income. For rural communities, the consequences could be generational.

The research also presents a clear solution. Biofuels provide scalable, sustained demand for agricultural commodities that grows alongside, rather than in competition with, food markets. The post-2005 expansion of agricultural capacity in response to U.S. biofuel policy proved the model works. Corn and soybean production surged. Farm income rose. Investment flowed into yield-enhancing technologies, processing infrastructure, and export capacity. Rural economies that had languished began to recover.

A new era for agriculture

The path forward is clear. Expanding biofuel demand — with higher bioethanol blends on road, to off-road solutions such as marine and sustainable aviation fuel, and beyond — can close the demand gap threatening today’s farmers. Biofuels have the potential to reignite growth in struggling farm communities, drive innovation, and expand agriculture’s capacity to feed and fuel the world — all while using fewer resources than before.

As a farmer-led organization with membership of 700,000 farmers and ranchers, USFRA is excited about this research and the role biofuels can play in unleashing agriculture’s potential. READ MORE