VIDEO: Tuesday highlights from Ag Summit

CHICAGO, Ill. — Speakers at DTN’s Ag Summit 2015 tackled a wide variety of subjects ranging from climate change to how to manage margins in periods of low prices.

What follows is a brief summary of some of their presentations. Read right through to the end to find out what DTN market analyst Darin Newsom has to say about his corn, soybean and wheat price outlook.

Full stories on these topics and more will be published in future issues of The Western Producer and here on www.producer.com.

Greg Page, executive director of Cargill Inc., told the 760 conference delegates gathered in Chicago about the findings of a report released by the Risky Business Project, a group attempting to assess the climate change challenges facing agriculture.

“The report says that corn, soybeans, cotton and wheat yields will decline by about 14 percent between now and 2050 and could decline based on climate alone by 42 percent by the end of the century without any adaptation,” he said.

Page said media outlets covering the report focused on the 14 and 42 percent numbers and ignored the “without any adaptation” addendum.
“I don’t think anybody here in this room is planning to farm without adaptation in the next five years, let alone the next 35 or the next 85,” he said.

Page said climate-based yield loss can be mitigated through continued investment in technology and prudent government policies around the world.

Jim Block, chief meteorologist for Schneider Electric, the parent company of DTN, said weather forecasts will get more accurate and more user-friendly in the next five years. He also spoke about what impact climate change will have on weather over that period.

Mary McBride, president of CoBank, a major agricultural lending co-operative, said U.S. farmers are transitioning from good times into a difficult financial period, but they should be able to weather the storm because farmers are not over-leveraged. | Sean Pratt photo

Mary McBride, president of CoBank, a major agricultural lending co-operative, said U.S. farmers are transitioning from good times into a difficult financial period, but they should be able to weather the storm because farmers are not over-leveraged. | Sean Pratt photo

Mary McBride, president of CoBank, a major agricultural lending co-operative, said U.S. farmers are transitioning from good times into a difficult financial period, but they should be able to weather the storm because farmers are not over-leveraged.
“We anticipate that while there won’t be great years in the next few years, they won’t be as bad as they could have been if you had too much debt,” she said.

Chris Baron, president of Ag View Solutions, a farm finance consulting company, said farmers need to focus on the big expenses such as land and equipment during tough financial times.

They might want to consider selling off some of their less productive land, renegotiating cash rents and putting equipment purchases on hold.

They also need to pay close attention to the return to management expense, which varies from US$36 per acre to $226 per acre among his clients. That is the amount farmers pay themselves to cover necessary costs such as health care expenses but also discretionary items like cars and trips.

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Renato Rasmussen, Brazilian economic analyst for Rabobank, said Brazil has 390 million acres of pastureland, much of which has been neglected.

With a little investment, farmers could improve pasture production and go from accommodating one animal per hectare to 1.3 animals per hectare.

That would free up an estimated 100 million acres of pastureland for crop production without having to destroy any forests.
Rasmussen said North American farmers don’t need to fear that potential massive increase in Brazilian grain production because the world is going to need a lot more food in the years to come.

Guilherme Scheffer, financial risk management director for Grupo Scheffer, one of the largest farms in Brazil, talked about the size and scope of the operation.

The company that started as a small family farm in Mato Grosso state seeded 152,438 acres of soybeans, 34,580 acres of corn and 74,100 acres of cotton in 2014-15.

It employs 1,266 people and generated gross revenues of approximately US$170 million in 2015.
The farm can plant 12,350 acres of soybeans a day and harvest 6,500 acres a day. It has 9.5 million bushels of soybean storage capacity.

Finally, DTN senior market analyst Darin Newsom said the 2016-17 price outlook for corn, soybeans and wheat is bearish based on supply and demand fundamentals, but the market seems to be more optimistic about the crops based on the technical charts he has analyzed.


Contact sean.pratt@producer.com

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