Die in – and post krises era? Waarheen nou? Ferdi Meyer

Die in – and post krises era? Waarheen nou? Ferdi Meyer

Die in – and post krises era?
Waarheen nou?
Ferdi Meyer
Jongboer fokusdag
September 2009
Land reform
September
2008
The perfect storm!
September 2009 – The
U.S (and the World) has
lost its way!
Impact of crisis - Overall
08/09 09/10
+63% +21%
-11%
-13%
300
200
100
2014
2013
2012
2011
2008
2007
0
2006
Index ('00)
400
06/07 07/08
2010
500
2009
Real Net Farming Income
What is behind this picture?
• Fluctuation of input-output price ratios
for most industries in 2009 and 2010.
• Why???
……..
World market - Cereals
Cereal Prices
400
350
250
200
150
100
Yellow maize, US No.2, fob, Gulf
Wheat US No2 HRW fob (ord) Gulf
Sorghum, US No.2, fob, Gulf
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
50
2004
US $ /ton
300
World market – Oilseeds
Oilseed Prices
800
700
500
400
300
200
Sunflower seed, EU cif Lower Rhine
Soybean seed: Arg. cif Rott
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
100
2004
US $/ton
600
World market – Fertilizer
Source: Grain SA, Sep 09
World market – Meat
Meat Prices
2500
1500
1000
500
Nebraska, direct fed-steer
Chicken, US 12-city wholesale
Hogs, US 51-52%lean equivalent
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
2004
US $/ton
2000
World market – Dairy
Dairy Prices - FOB Northern Europe
5000
3000
2000
1000
Cheese
Skimmed Milk Powder
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
0
2004
US $/ton
4000
Butter
Whole Milk Powder
Long term virtual milk price in perspective
45
40
US cents/liter
35
30
25
20
Deflation
indexes at
2000=100
15
10
5
Virtual nominal price
Deflated by animal cost index
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0
Deflated by US feed index
Depending on perspective, world supply inducing “milk
price” is not so high compared to costs....
World market – Fuel
World Ethanol and Oil prices
100
8.0
90
7.0
80
5.0
50
4.0
40
3.0
30
2.0
20
2014
2013
2012
2011
2010
2009
2008
0.0
2007
0
2006
1.0
2005
10
2004
US $ / bbl
60
US $/barrel Persian Gulf: F.O.B. Imported Crude Oil
US$/gallon World ethanol price (BRA anhydrous)
World biodiesel price Central Europe)
US $ / gallon
6.0
70
What is behind the Outlook?
• Fundamental drivers over the long run:
– Impressive supply response in 2007, 2008
and 2009 – stock levels improved
– Demand remains relatively strong for
cereals and oilseeds
– Biofuel policies
• Speculation / Uncertainty over the short
run
Latest projections!!
SA Maize market
White maize
2500
4000
3500
R/ton
2500
1500
2000
1000
1500
1000
500
500
0
0
1997
2000
2003
2006
2009
White maize imports
White maize exports
SAFEX
Export parity africa
2012
2015
Import parity Randfontein
Thousand tons
2000
3000
SA Maize market
Yellow maize
1200
3500
900
R /to n
2500
2000
600
1500
1000
300
500
0
0
1997
2000
2003
2006
2009
Yellow maize imports
Yellow maize exports
SAFEX
Export parity africa
2012
2015
Import parity Durban
T h o u san d to n s
3000
SA Maize market
Maize Production and Utilisation
14000
Thousand tons
12000
10000
8000
6000
4000
2000
Human consumption
Ethanol consumption
Feed consumption
Production
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
SA wheat market
Wheat Area and Prices
600
4000
3500
500
2500
300
2000
1500
200
1000
100
500
Wheat summer area harvested
Average SAFEX price
2014
2013
2012
2011
2010
2009
2008
0
2007
0
Wheat winter area harvested
R/ton
400
2006
Thousand ha
3000
Oilseed markets
Sunflower Area and Price
700
5000
4500
500
3500
400
3000
300
2000
2500
1500
200
1000
100
500
Area harves ted
2014
2013
2012
2011
2010
2009
2008
0
2007
0
Average SAFEX price
R/ton
4000
2006
Thousand ha
600
Oilseed market
Soybean Cake Utilisation, Imports and Price
4500
1400
4000
1200
1000
800
2500
600
2000
R/ton
3000
1500
400
1000
200
Consumption
Imports
2014
2013
2012
2011
2010
2009
2008
2007
0
500
2006
Thousand tons
3500
0
Average market price
2010 FIFA World Cup scenarios
Scenario 2
“Fans only”
North and South America,
Australia and New Zeeland
+ Low Impact on Red Meat
+ Focus on higher value
products
Length of Stay
10 days
- Less adventurous substitution
- Marginal impact on hospitality
industry
- Lowest impact on Red Meat
-Focus on high value white
meat products
- Less adventurous substitution
“Fans and Family“
+ Largest Impact on Red Meat
+ Increase in prices
+ Impact on hospitality industry
+ High value products required
+ Adventure Substitution
+ 2nd largest Impact on Red Meat
+ Largest impact on White Meat
+ Adventure Substitution
Length of Stay
20 days
-High value pork products
required
Scenario 3
Scenario 4
“Fans and Schnitzel”
Scenario 1
European dominated
“Fans and Family and
Schnitzel”
2010 FIFA World Cup scenarios
Scenario 1
North and South America,
Australia and New Zeeland
Meat Types
“Fans and Family“
Consumption
Price shift
+ Largest Impact on Red Meat
Beef
875 tonnes
73 c/kg
2.8%
+ Increase in prices
Lamb
67 tonnes
7.5 c/kg
0.2%
+ Impact on hospitality industry
Pork
839 tonnes
102 c/kg
6.1%
+ High value products required
Poultry
855 tonnes
27.8 c/kg 1.45%
+ Adventure
Substitution
Sum
2636 tonnes
Length of Stay
20 days
Meat consumptions growth
12%
26%
38% 5%
Total
18%
24
Price ratios
6
600
4
400
2
200
0
Production
Ratio
800
2014
8
2013
1000
2012
10
2011
1200
2010
12
2009
1400
2008
14
2007
1600
2006
Thousand tons
Chicken Production and Returns
Chicken-Maize price ratio
Price ratios
800
3500
700
3000
2000
500
1500
400
1000
2014
2013
2012
2011
2010
0
2009
200
2008
500
2007
300
Production
Domestic use
Carcass price
Weaner calf price
c/kg
2500
600
2006
Thousand tons
Beef Production, Utilisation and Price
Can this picture be real?
• Winston Churchill once said:
“You can always rely on the Americans to do
the right thing…..once they have eliminated
all the alternatives”
• Biggest uncertainties for commodity prices:
– Climate
– Macro:
• Recovery vs dollar
• Availability of credit
• BRIC