Hot Global Agricultural Markets Makes 2011 A Brave New WorldFri, 07 Jan 2011 11:18:23 CST
Case IH sponsored a look at the future for US agriculture in conjunction with AgConnect 2011 in Atlanta on Friday- and Dan Basse, President of AgResource, threw out several words in his presentation that he believes are keys for farmers and ranchers moving into the farmer.
The first of those words is volitatile. Basse says the grain markets turned on a dime earlier this year- as news came out that Russia was in the depths of a drought that makes the US the only country that has sizable stocks of grain. Add to that the sharp rise in cotton prices, the third largest corn crop on record which apparently was not enough- and you have a recipe where all of our agricultural markets are tense and will jump up or down with just a sniffle.
Another word that Basse discussed in his presenation- as well as with us after the session in a conversation that we have recorded and have at the bottom of this page- is affluent. The BRIC countries- especially China and India, are rapidly growing- and their income is shooting higher year after year. Basse says their income growth is in the neighborhood of eight to ten percent annually. These countries want consumer goods- and want to eat better- which is driving demand to a point where we are in unknown waters of international demand.
With that export demand- the next word that could be said of Basse's comments is the word "lacking." Lacking in terms of the number of acres that US Agriculture has available to put into crop production over the next year os so. Basse says he believes- short of bringing out huge amounts of CRP land and placing it into crop production- he sees at most four to five million acres that could be devoted to the major US farm crops. The market is trying to shift acres around- but it becomes more difficult each year.
One final word that we talked with Basse ab out is "Revenue." He tells us that he advises his clients to not worry high prices or input costs- but look at the big picture and how revenue shakes out from your production expertise. Net farm income has the potential to go higher again in 2011- and that is where the focus for our farming/ranching operations need to be.
Click on the LISTEN BAR below to hear our full conversation with Dan Basse as we visited with him at the CASE IH booth at AgConnect 2011. Click here for the AgResource website to learn more about Dan Basse.
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