“Secondly, the ongoing liberalisation of the world agricultural markets and trade frameworks, particularly with China, should have a positive effect for Australian growers,” he continued.

“Thirdly, the use of grain and oilseeds for non-traditional purposes like biodiesel and ethanol should continue to grow by somewhere between 30 per cent and 50pc by 2020. This means that future upturns in grain and oilseed prices will persist for longer periods.

“Taken together, there is little doubt these three factors will result in accelerating global demand for grain and oil seeds, with the projected rate of demand to increase by approximately 2.5 per cent per annum until 2015.”

However, Mr Keogh warned that global demand can only positively affect price when compared with the relative rates of supply.

“Grain and oilseed price over the long term will depend on global output compared with global supply,” he said.

Production:

Mr Keogh said the availability of additional land and water was the first restriction on the ability to increase production.

“Cropping land in the USA, Western Europe, China, India and Middle East is falling, but in Eastern Europe and Africa crop production is increasing. Up to 200 million hectares of suitable cropping land could be made available in Eastern Europe and South America if Government policy settings were in place to encourage this development, and more importantly, if grain prices made it profitable.

“It is likely that global cropping areas will continue to grow, but it is unlikely that sufficient areas will be developed to keep up with demand.”

The second factor Mr Keogh considered was cropping sector productivity growth. Australia and other developed nation crop producers have achieved productivity growth between 2pc and 4pc per annum, mainly due to steady yield per hectare increases.

“These productivity gains are tapering off,” he said. “While developing countries should see productivity growth, growth across the board will become more difficult to achieve.”

The third and most speculative of production trends Mr Keogh addressed was the impact of climate change on production.

“Contrary to popular belief, climate change might even increase global capacity, by making areas in Canada and Russia suitable for cropping,” he said.

“The consensus view is that production will increase in alpine and sub-alpine regions, but decrease in tropical and sub tropical regions, making distribution rather than availability of grain a bigger challenge. Globally, therefore, climate change is unlikely to impact global cropping production for the next 20 years.”

Conclusion and implications for growers

Mr Keogh recognised that “fortune telling” was always fraught with danger, but he was confident in the long-term future for Australian growers.

“The overall conclusion is that these consumption and production mega-trends have a reasonable strong probability of increasing grain and oilseed demand and prices over the next 20 years,” he said.

“This, in turn, is likely to mean that, on average, there will be improved profit opportunities for grain producers, and prices for cropping land will also increase over the longer term.”