Some highlights from the Doane Outlook Conference
We did spend some time working through the world grain supply and demand situation. While world grain production exceeded use in the 2007 through 2009 period over the last 13 years, from 2000/01 through 2012/13 the deficit totals more than 90 million tonnes. The data shows that yield growth is not slowing and that world grain and oilseed crop area has expanded and will probably increase more. But demand growth in China is very strong and yield gains in China won’t be enough to meet future needs. The key for the world corn market may be how much can China increase corn area in the next five years, after boosting it by nearly 10 million hectares in the last 10 years. The other critical question for the future, that no one can answer with certainty, is – do the recent poor crops indicate that the weather has shifted to less favorable patterns?
click image to zoom Dan Vaught discussed the outlook for cattle and hogs and indicated that we are seeing a shift in demand for beef, with the export market as a key driver. U.S. beef exports have rebounded from the collapse at the end of 2003 and we are now a net beef exporter, even with current high prices. It appears that Japan may ease restrictions on U.S. beef which could give the market another real boost. The weakness in the dollar has helped to boost U.S. beef and pork exports. The hog sector may face higher than currently expected supplies next year. Dan pointed out that productivity usually increases pretty significantly when producers cull their herds because they retain the highest producing sows. That could mean an increase in pigs saved per litter of 1.5 percent to 2.0 percent, wiping out a significant part of the reduction in farrowings. But we will see fewer hogs, less cattle on feed and a smaller dairy herd in 2013.
If you have questions about the conference please let us know. Check out the presentations on the website and consider putting the Doane Outlook Conference on your schedule for next year. It will probably be in the second half of October in 2013.