More than 900 farmers attended the 2011 Top Producer Seminar. The event focused on issues shaping agriculture.
Top Producer Seminar Focuses on Ag’s Future
The future of U.S. agriculture was under close scrutiny at the Top Producer Seminar held in Chicago in late January. More than 900 of the nation’s leading business-minded farmers
attended the annual event, which is the largest and longest-running agriculture business seminar.
Titled "Sharpen Your Competitive Edge," this year’s seminar focused on the local, national and international issues that are shaping agriculture now and will shape it in the future.
"U.S. farmers face incredible challenges given a growing world population and an increasing standard of living in developing countries, coupled with scrutiny on how food, fuel and fiber are produced," says Top Producer Editor Jeanne Bernick.
"This is happening at the same time we see unprecedented market opportunities and profit potential on farms. It’s going to take a sound strategy and business thinking to help farmers take full advantage of the opportunities in today’s market," Bernick adds. "The Top Producer Seminar agenda helped expose them to the issues that will be important to agriculture for decades."
Real commodity demand. Among the changes facing agriculture around the world is the interest level from large index funds, in both the commodity and farmland markets.
Unlike the most recent run-up in 2007–08, funds are not making a fictitious market. The demand is driven by increasing interest from China and a short crop this past year, said Jerry Gulke, Top Producer market analyst and president of the Gulke Group.
Gulke points out that for nearly two decades, the U.S. has granted China most favored nation trading status, allowing the Chinese to build up their supplies and standard of living. Meanwhile, the U.S. was busy ignoring its own food needs.
"We have no strategic reserves ourselves and China was building a demand base with a population that has as many people in the middle class as we do in the entire population. That isn’t going to go away anytime soon. Now we have food inflation and an explosion in prices. We have to be careful not to underestimate how big this demand is, too," Gulke said.
"We have to understand how the costs of raw materials cycles through. We pay maybe 12% of our income for food. In China, it’s 48%. If you raise the price of food over there, they have no money left to do anything else," he said.
Outside farmland interest. Pension funds do have money, and their interest is increasing, especially in U.S. farmland. Biff Ourso, a TIAA-CREF director in Global Private Markets, said the U.S. market provides a safe, long-term investment opportunity, despite cheaper and equally productive land in Brazil, for example.
"We focus on major grain exporting countries that will meet the global increase in demand. At the end of the day, the U.S. is our anchor market," Ourso said.
That’s where the opportunity comes in for U.S. farmers looking to expand their operations without purchasing large tracts of land. TIAA-CREF is interested in building relationships with farmers who have experience and access to capital and equipment.
Challenging growing season. Perhaps the most important issue facing agriculture is the weather. With worldwide grain shortages, this year’s weather and the need for a large U.S. corn crop is especially critical.
The outlook from Allen Motew, QT Weather meteorologist, sent reverberations through the crowd. At best, he said, it will be a challenging growing season, warning farmers of low corn and soybean yields and a season similar to the drought years of 1974 and 1988.
- March 2011