Two economist highlights from ASFMRA
INDIANAPOLIS, Ind.—The 83rd Annual Meeting of the American Society of Farm Managers and Rural Appraisers (ASFMRA), which also included the Agronomics—Vision 2013, more than anything else included a program of economists providing differing views and various outlooks for land values, U.S. grain marketing and world economies.
The kickoff came from Steve Elmore, agricultural global economics lead for DuPont Pioneer. He said ag production and food consumption per capita are on the increase, and this consumption is increasing in meat with beef being the least rapidly increasing. China’s impact and situation was a main example of these world economies outside of the most developed nations.
Low ending stocks for corn, wheat and rice are a concern, Elmore said. It is an accounting situation related to when South America harvests that shows soybean stocks going up when in reality they haven’t, he said. It is Elmore’s contention that wheat will pull acres out of corn and soybeans in 2013 planting.
For the near term, the lowest feed to animal supply is a concern, but it will adjust with livestock producers decreasing inventory. “We are at the lowest we’ve been in corn per animal unit, including DDGs in the calculations, even back to 1988,” Elmore said. “What it shows us is that we probably need more contraction in the livestock industry that we have not seen yet, because animal numbers aren’t sustainable.”
“In 1992, the U.S. produced 51 percent of the soybeans in the world. Now we produce 29 percent of the soybeans. Back in 1992, South America produced 30 percent of the soybeans in the world, and they now produce 55 percent,” Elmore explained.
The increased yields of crops worldwide has been mainly based on increased seeding rates with better planting technology and seed matched to soils to allow higher population planting.
Export of soybeans to China is a number yet to be locked at any level; there is just a lot of optimism in the soy industry. “U.S. exports have gone down. In 2007, while everybody blamed ethanol, it was still a record high year for exports of corn,” Elmore said. The U.S. share of world corn exports was 63 percent and that has dropped to 35 percent in 2012. Big competitors to the U.S. are South America and the Black Sea countries.
Elmore said in regard to grain use for biofuel. The Department of Energy came up with the 15 billion gallons of biofuels based on the projection of total fuel use of 150 billion gallons. The 10 percent number was based on the use of E10 ethanol in each gallon of gasoline sold. The projections of total gasoline that will be used is lower than original projections by 13 billion gallons. E15 and E20 gasoline are issues to consider. “How this plays out is a big factor in the forecast for agriculture in the U.S.,” Elmore said.
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