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Global Ag Commodity Markets

Global Ag Commodity Markets. agri benchmark Cash Crop Conference Des Moines, Iowa August 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911. Long-term Agricultural Projections. Who does them? A lot of groups USDA FAPRI OECD

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Global Ag Commodity Markets

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  1. Global Ag Commodity Markets agri benchmark Cash Crop Conference Des Moines, Iowa August 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

  2. Long-term Agricultural Projections • Who does them? A lot of groups • USDA • FAPRI • OECD • Why do we have them? Lots of reasons • Producer planning • Industry planning • Government planning • Evaluation of markets and policies in anticipation of changes • Are they right? No • But are they useful? Yes • They tend to reveal the general trends, but not the sudden shifts

  3. Methodology • Historical Trend Analysis • Looking for general patterns • Some Econometric Modeling • Attempt to uphold economic theory • Some Expert Judgment • Attempt to get some guidance on the sudden shifts • Increasingly Stochastic in Nature • More issues relate to the tails of the distributions, as opposed to the means

  4. My Perspective • Currently, I’m the crop markets specialist for Iowa State University Extension • Previous jobs in the Center for Agricultural and Rural Development (CARD) and the Food and Agricultural Policy Research Institute (FAPRI) • Given my background, we’ll use the current FAPRI outlook to walk through a long-term projection for agriculture

  5. Models, Models, Models

  6. Starts with Macro

  7. … and Demographics

  8. Then We Get to Agriculture

  9. Oilseed Outlook

  10. Land Is Still Flowing into the System

  11. Productivity Continues to Build

  12. Government Policy Impacts Markets

  13. Alternative Uses Ebb and Flow

  14. Relate Back to Farm Income

  15. Through Both Revenues and Costs

  16. Corn Prices vs. Costs Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre Sources: USDA-NASS for Prices, Duffy for Costs

  17. Thank you for your time!Any questions?My web site:http://www.econ.iastate.edu/~chart/Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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