Biofuels Seen as Key to Prevent Long-Term Farm Downturn, Spur Agricultural Growth
S&P Global Energy study warns slowing food and fuel demand could shrink U.S. crop acres without expanded biofuel markets
According to the June 2026 S&P Global Energy report (link) Fueling Agriculture: Biofuels as the Catalyst, prepared for U.S. Farmers & Ranchers in Action, agriculture is entering a period of structural transition as productivity gains increasingly outpace growth in food and fuel demand. The study argues that expanded biofuel use could provide a critical new source of demand for agricultural commodities, helping sustain farm profitability, preserve crop acreage, stimulate rural investment, and enhance both food and energy security.
The report contends that global agriculture faces a growing imbalance between supply and demand. Technological advances, including biotechnology, precision agriculture, artificial intelligence, improved genetics, and digital farming systems, have driven record harvests and rising crop yields. In 2025, global grain, oilseed, and fiber inventories approached 1 billion metric tons as production continued to expand faster than traditional demand channels. At the same time, population growth is slowing, fertility rates are declining, and food consumption growth is moderating across many regions of the world.
S&P Global Energy notes that per-capita meat consumption growth has slowed sharply from approximately 2.4% annually in the late 1990s to 0.7% in 2025 and is projected to slow further to just 0.1% by 2050. Grain consumption trends show similar maturity, with global wheat and rice consumption per person largely flat and barley consumption declining. These trends suggest that future agricultural demand growth will rely increasingly on population expansion rather than rising food consumption per person.
The study also highlights challenges facing the biofuels sector. Under current Renewable Fuel Standard policies, ethanol blending remains near 10%, but improving vehicle fuel efficiency, changing driving habits, demographic shifts, and growing electric vehicle adoption are expected to reduce gasoline demand. If ethanol blending rates remain unchanged, U.S. ethanol demand could fall by nearly half by 2050, reducing annual consumption to roughly 6.6 billion gallons.
Because roughly 36% of U.S. corn acreage is tied to ethanol production, S&P Global Energy projects that stagnant ethanol demand would have major implications for agriculture. In a scenario where ethanol remains at a 10% blend rate, U.S. corn acreage could decline by approximately 31% by 2050, equivalent to removing a land area roughly the size of North Carolina from corn production. The report argues that such a contraction would increase market volatility, weaken farm profitability, and further stress rural economies already facing declining farm numbers and acreage losses.
The report draws parallels to the agricultural downturn of the 1980s, warning that sustained oversupply and weak demand could create a prolonged period of low prices, reduced investment, farm consolidation, and rural economic stress. It notes that U.S. agriculture has already lost 209,000 farms and 58 million acres between 2002 and 2022, with the steepest losses occurring during the most recent census period from 2017 to 2022.
Against that backdrop, S&P Global Energy positions biofuels as a strategic solution capable of absorbing agricultural surpluses while creating new economic opportunities. The study argues that expanded biofuel markets could restore long-term farm profitability, encourage adoption of advanced production technologies, create demand for sustainable feedstocks, and strengthen food, economic, and energy security. Importantly, the report challenges the traditional “food versus fuel” debate, arguing that slowing food demand means agricultural productivity gains increasingly require new markets to maintain balance.
One of the report’s more optimistic scenarios assumes continued innovation and stronger biofuel demand. Under that framework, U.S. corn yields could increase by approximately 1.6% annually through 2050, generating nearly 50% more production without expanding acreage. Global biofuel production could more than triple, while co-products such as distillers grains and protein meals would increase food and feed supplies by 45% relative to 2025 levels. S&P Global argues these gains could be achieved largely through improved productivity and technology adoption rather than expansion into new farmland.
The study concludes that agriculture is approaching a pivotal moment. With population growth slowing, food consumption maturing, and traditional fuel demand under pressure, the sector requires new demand drivers to support continued investment and innovation. S&P Global Energy argues that biofuels are uniquely positioned to fill that role, providing a scalable market for agricultural production while simultaneously advancing energy security, rural development, and sustainability objectives.
The report serves as one of the strongest recent arguments from a major research organization that biofuels are no longer simply an energy policy issue but increasingly an agricultural policy imperative. Its central thesis is that without a significant expansion in biofuel demand, U.S. agriculture could face a structural oversupply problem lasting decades. Whether policymakers embrace higher ethanol blend rates, sustainable aviation fuel growth, renewable diesel expansion, or new bio-based industrial markets may determine whether future productivity gains translate into greater prosperity for farm country or intensify the financial pressures already confronting producers.
