Tag Archives: agricultural
China, Africa to Strengthen Agriculture Cooperation
2013-08-29 12:09:54 Xinhua Web Editor: Liu Ranran China and Africa see broad prospects for future agricultural cooperation and the two sides will work to establish a mechanism to advance cooperation in the sector, said an official white paper released Thursday. “The Chinese government attaches great importance to its mutually beneficial agricultural cooperation with Africa, and works hard to help African countries turn resource advantages into developmental ones,” says the paper on Sino-Africa Economic and Trade Cooperation published by the Information Office of the State Council. In recent years, Sino-African trade in agricultural products has grown quickly. From 2009 to 2012, China’s agricultural exports to Africa grew from 1.58 billion U.S. dollars to 2.49 billion U.S. dollars, an increase of 57.6 percent. During the same period, China’s agricultural imports from Africa, mainly non-food items such as cotton, hemp, silk and oilseeds, saw a 146-percent surge. The paper attributes the robust growth partly to China’s zero-tariff policy adopted in 2005 for some African products, as well as Chinese enterprises’ growing investments in Africa. From 2009 to 2012, China’s direct investment in African agriculture grew from 30 million U.S. dollars to 82.47 million U.S. dollars, an increase of 175 percent. Those investment has increased grain supplies in the countries concerned and enhanced the comprehensive agricultural productivity of those countries, the paper says, citing Mozambique as an example, where 300 hectares of experimental paddy fields supported by Chinese investment yielded 9 tonnes to 10 tonnes per hectare for three successive years. The paper says the Chinese government has tried to enhance Africa’s self-reliance capacity to develop its agriculture by setting up technology demonstration centers, and sending experts to share experience in agricultural production. Since 2006, China has helped set up 15 agricultural demonstration centers in Rwanda, the Republic of Congo, Mozambique and some other countries, and is planning to establish another seven. “In the future, China will advance agricultural cooperation with Africa in all respects while ensuring that this cooperation puts both parties on an equal footing, is mutually beneficial, and advances common development,” the paper says. It will work to establish and improve a mechanism for bilateral agricultural cooperation, and strengthen Sino-African cooperation in the sharing of agricultural technologies, resource varieties and agricultural information, the processing and trade of agricultural products, agricultural infrastructure construction, and human resource training, says the white paper. China will also work to deepen Sino-African cooperation within the frameworks of the United Nations Food and Agriculture Organization (UNFAO) and the International Fund for Agricultural Development, according to the paper. Continue reading
US Farmland Prices Keep On Rising
http://www.ft.com/cms/s/0/caa6bdd0-05c0-11e3-ad01-00144feab7de.html#ixzz2cP3tHszb August 15, 2013 By Gregory Meyer in New York Farmland values in a critical US agricultural region continued their rise in spite of weakening crop prices, as low interest rates and a dearth of investment alternatives spur wealthy farmers to amass more acreage, Federal Reserve economists have reported. Irrigated land in states such as Kansas and Nebraska gained 25.2 per cent year on year in the quarter ended June 30, the ninth straight quarter in which annual price rises have topped 20 per cent, the Federal Reserve Bank of Kansas City said in a survey of bankers published on Thursday. The sharp increase in the face of an expected decline in incomes will further stoke debate about whether land prices reflect fundamental farm economics or have been artificially inflated by low interest rates. In a separate survey of a district that includes Illinois and Indiana, the Federal Reserve Bank of Chicago reported farmland values rose 17 per cent from a year before. But second quarter values were unchanged from the first quarter, in the first flat quarterly results since 2009. The lion’s share of US farmland is still bought and sold by farmers, but it has also attracted large institutional investors such as TIAA-CREF and pension funds. Grain prices fell in the survey period, with hard winter wheat futures down 8 per cent in the year to June 30. Questions about the direction of US biofuels policy also weigh on investors’ minds, said Philippe de Lapérouse of consultant HighQuest Partners. The retreat in crop prices is expected to hit US farm revenues. Equipment maker John Deere forecasts a 6 per cent drop from a record $402.1bn last year to $379.7bn in 2014. The Kansas City Fed said: “Bankers expected income to drop further in the next few months due to the possibility of sharply lower corn and soyabean prices at harvest. Despite lower farm income and expectations of additional declines, farmland values surged further during the second quarter.” The survey found that farmers’ overall wealth levels, as well as “low interest rates and a lack of alternative investment options”, were more important factors behind the boom than expected incomes. To date, concerns about a looming bubble have been answered with the facts that farmers’ debts are low relative to their assets, speculators are in the minority and grain prices are still relatively high. Meanwhile, the average interest rate on farm real estate loans rose slightly to 5.38 per cent in the quarter, its first increase in more than two years in the Kansas City district. “Farm loan repayment rates softened in the second quarter and were expected to weaken in coming months with lower farm income,” the Kansas City Fed said. The Chicago Fed said most bankers envision stable land prices. “The anticipation of lower crop revenues – especially when combined with potentially rising interest rates on farm loans – portended softness in future farmland values,” its survey said. Nationally, farmland has gained 9.4 per cent on average from 2012, the US Department of Agriculture said earlier this month. Continue reading
Notes from the Kansas City Fed Agricultural Symposium July 2013
August 6th, 2013 This is one of the slides that Mike Boehlje of Purdue showed during the July KCFRB agricultural symposium. There was a global cropland expansion of 147 million acres in the past eight years. Most of these acres came from South America, the FSU, and East Asia, and most of those acres went into growing corn, followed by soybeans. Note that some of the added acres are from double cropping. ********* In mid-July, the Federal Reserve Bank of Kansas City hosted its annual agricultural symposium titled, “The Shifting Nexus of Global Agriculture.” I considered attending but did not, so instead I read the twitter feeds of those who tweeted the event and there are some good nuggets in the (modified) tweets which follow. 1) From speaker Mike Boehlje, Professor at the Dept. of Agricultural Economics, Purdue: • Citing a new report he had just seen in the WSJ, Boehlje said that the IMF had decreased projections for world economic growth for the 4th quarter in a row. He said that this article has huge implications for agriculture including in China, India, and Brazil, too. • Don’t drink the Kool-aid that the agribusiness sector is feeding. Growth in INCOME counts, not population growth. ( K.M. Note: This was my favorite quote from this whole post, as I about go ballistic every time I see that “How are we going to feed… ” headline, which is far too often and gets the question wrong! …there are many other things that count besides growth in income, too, but it most certainly isn’t just about production.) • Boehlje said he’s a pessimist on long-term U.S. livestock industry competitiveness, which was based on cheap feed. The U.S. demand for animal protein is “mature at best and probably declining.” Larger multinationals may well off-shore production. He named 12 things to watch: • EU debt crisis • U.S. economic recovery • changing value of the USD • unpredictable Asian growth • current short crop supplies – weather supply shocks • livestock regulations • increased global acreage for crops • farm policy uncertainty • interest rates • fertilizer, seed, chemical, energy prices (input costs) • farm income and land values • counterparty risk 2) Univ. of Missouri’s Pat Westhoff: • Don’t count on $7 corn “unless the world changes in very fundamental ways.” He sees sub-$5 corn the next 10 years. 3) Gavilon’s Ray Wyse: • The FAO food index has tripled since the RFS was implemented, and land prices have increased five fold. • There are still more acres to be had in the FSU region, and double cropping is growing steadily around the world. • Some people are now looking at the People’s Republic of Congo as “the next Brazil.” • Is it possible to double-crop corn in certain regions of the U.S. as Monsanto develops shorter season varieties? • We will miss our corn export market when its gone. 4) Texas A&M economist Joe Outlaw: • You don’t write a farmbill for the good years, you write it for the bad years. Policy makers have to focus on that reality. 5) Next, are a few tweets about farmland. Sorry, I don’t have all of the sources of the quotes. • In fiscal 2012, Farmers National Company has sold more than 600 farms, for over $450 million. Active farmers continue to dominate the buy-side of the market. • Investors purchased between 25-30% of FNC’s 2012 sales. Traditional investors about half, non-traditional investors growing. • Jim Farrell: A new phenomenon we’re seeing is the 80+ year old cash buyer. He’s doing this since there’s no return on investment in CD’s or other “safe” investments. ( K.M. Note: I’ve also seen this going on with home purchases where I live here in Boulder, Colorado. You’d think 75 year olds would downsize, but instead they upsize – presumably for a place to safely invest with a better chance of return on their investment.) • Joseph Bond: Ag expansion in the Black Sea region will require billions of dollars of investment in modern agriculture techniques. • William Mott: More concerned about infrastructure and logistics costs with international farming operations than cost of production. 6) Informa’s Kenneth Eriksen: • There are “center pivots going up all over the map” in central and southern Illinois. Continue reading
