Arkansas Corn Growers Association

Arkansas Corn Growers Association
Jonesboro, Arkansas – Cooper Alumni Center
Introduction and Agenda
Brian Semple
• Bunge Little Rock
• Domestic Merchandiser
“U.S. farmers supply 41.56% of
the world’s corn”
“The average U.S. farmer feeds
155 people across the world”
• Bunge wants to be a partner with
you in this process
“Farmers are a direct lifeline to
more than 24 million U.S. jobs in
all kinds of industries”
Source:
www.americasfarmers.com
• Thank you for all you do!
Arkansas Corn Growers Association
Agenda
•
•
•
•
Bunge Global Presence
Bunge Arkansas Presence
Bunge’s History
Domestic Program
– Bid / Basis Structure
• US Corn Supply & Demand
• Current Market Structure
– Q&A
A Leading Global Agribusiness & Food Company
Key Facts
Revenue: $46 Billion
Employees: ~32,000
Facilities: ~400
Countries of Operations: 30+
Agribusiness
• A global leader in
oilseed processing
• A global leader in grain
and oilseed marketing
Sugar & Bioenergy
Food & Ingredients
• 21 mmt sugarcane milling
capacity producing sugar,
ethanol and electricity
• Leading producer of oils,
margarines & industrial
fats in the Americas
and Europe
• #2 in global trade
and distribution
• Growing oils position
in Asia
• Leading corn and wheat
miller in the Americas
Arkansas Corn Growers Association
Fertilizer
• Fertilizer operations
in Brazil, Argentina
and the U.S.
• Joint venture with
OCP in Morocco
Bunge’s Presence in Arkansas
• Mississippi River Facilities
– Huffman, Osceola, West
Memphis, Helena, Desoto
Landing
• Arkansas River
– Pine Bluff, Linwood
• White River
– Newport, Augusta, Des Arc,
Clarendon, St. Charles
Arkansas Corn Growers Association
…a nearly 200 year history
Purchases
edible oils
company
Walter Rau
in Germany
Builds largest U.S. soybean
crushing and refining plant
J.P.G.
Bunge
founds
Bunge &
Co. in
Amsterdam
Establishes
operations in
Argentina to
trade grain
1859
1818
1905
1884
Builds first soy
processing plant in U.S.
1938
1918
Moves
headquarters
to U.S. and
creates
international Opens first
soybean
marketing
processing
unit
plant in China
Makes first export of
soybeans from Brazil
Starts business
in North America
1997
1967
1945
70s & 80s
1999
1998
2002
2001
Relocates
to Antwerp
to trade
commodities
Arkansas Corn Growers Association
Diversifies along the
food production chain
2009
2007
2005
2008
2010
Purchases
Santa Juliana
sugarcane mill
in Brazil
Enters Brazilian
fertilizer market with
purchase of Serrana
Expands into
Brazil and
enters the
wheat milling
business
In Brazil,
sells
fertilizer
nutrients
business
and adds
five new
sugarcane
mills with
Moema
purchase
In Brazil,
purchases soy
processor
Ceval and
begins
acquisition of
new fertilizer
brands
Purchases Cereol
to become the
world’s largest
soy processor
Goes public on
NYSE and becomes
Argentina’s leading
agribusiness
company
Begins building an export
terminal in the U.S.
Pacific Northwest and a
crushing plant in Vietnam
Bunge domestic feed grains program
Poultry Feed Mills
Livestock Feedlots
Pet food mills
Bin Direct Program
• Delivered Mill Bid
– Capitalize on freight spread by
hauling yourself
@CU2012 Daily Chart(DTN ProphetX)
• FOB bins bid
Arkansas Bushels harvested
– Bunge arranges freight from onfarm storage
100,000,000
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
Bushels
40,000,000
30,000,000
20,000,000
10,000,000
0
2007
2008
2009
Source: USDA
Arkansas Corn Growers Association
2010
2011
• Traditional contract types
• Capitalize on Bunge’s customer
service – We want your business.
Basis / Bid Structure
Domestic Market – Bin Direct
• CIF NOLA values
– Function of supply and demand of
river / global market
• Barge Freight
• Truck Freight
• Competition (Rail, other feed
sources)
• Time Frame
• Volume
Arkansas Corn Growers Association
River / Export Market
• CIF NOLA values
– Function of supply and demand of
river / global market
• Barge Freight
– Values relative to current market
bid and ask side
• Competition
• Time Frame
• Volume
CORN - US BALANCE
mln bushels SEP/AUG
Planted Acres (Mln Acres)
Harvested Acres
Percent Harvested
Yield Bu/Acre
07/08
93.5
86.5
93%
150.7
08/09
86.0
78.6
91%
153.9
09/10
86.4
79.5
92%
164.7
10/11
88.2
81.4
92%
152.9
11/12
91.9
84.0
91%
147.1
Beg. Stocks
Production
Imports
Total Supply
1,304
13,038
20
14,362
1,624
12,092
14
13,729
1,673
13,092
8
14,774
1,708
12,447
28
14,183
1,127
12,358
15
13,500
FSI
4,387
3,049
1,338
5,913
2,437
12,737
5,025
3,709
1,316
5,182
1,849
12,056
5,961
4,591
1,370
5,125
1,980
13,066
6,428
5,021
1,407
4,793
1,835
13,056
6,405
5,000
1,405
4,600
1,650
12,655
1,624
12.8%
47
1,673
13.9%
51
1,708
13.1%
48
1,127
8.6%
32
845
6.7%
24
FSI for Fuel
FSI non for fuel
Feed and Residual
Exports
Total Use
Ending Stocks
Stocks to use%
Stocks in Days of use
Source: USDA
Arkansas Corn Growers Association
The Current Market
Domestic Market
• Can ethanol compete on its own merit
without the subsidies?
• Margins in meat industry / Rationing
demand / Cheaper energy sources
• Planting/Acreage – Switching other
commodity acreage over to corn
– Last 2 years for corn growing in U.S.
has been historically bad. Will it come
back with greater acreage and yield?
• USDA reports – March 31st
• Volatility in Cash and Futures market
persistent
Global / Export Market
• U.S.
– Export market competing with new
major players in traditional markets
– Corn acreage for U.S. 2012/13 crop
• South American weather
– Argentina major competitor with U.S.
market flow
– Has the market already priced in the
weather/losses for South American
corn crop
• Ukraine
– Bread basket of Europe, becoming
major exporter to traditional U.S.
markets
• China
– Exports increasing year on year
– Will they come into buy for the 2012/13
crop as in past years
Arkansas Corn Growers Association