- Involved in global crop production for 40 years, his experience in South America started in the early 1970s when he conducted agricultural experiments in central Brazil.
- A keen observer of the development of the soybean industry in South America. Fluent in Portuguese and travels regularly to Brazil, Argentina and Paraguay to inspect soybean and corn crops.
- Appears frequently on national television and radio programs to discuss world agricultural issues; conducts numerous seminars dealing with agricultural production for regional and national audiences.
- President of Soybean And Corn Advisor, Inc., a consulting firm that works with Fortune 500 companies and the agricultural trading community specializing in fundamental analysis of soybean and corn production with special emphasis on South America.
- Worldwide client base includes: Investment companies, banks, grain merchants, food manufacturers, agricultural processors, information and advice services, commodity traders, agricultural co-ops, chemical companies, fertilizer companies, livestock feed companies, large-scale farming, and governments.
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Soybean and Corn Production - North and South America
- South America's influence and role in the grain market are growing.
- Grain and soybean production is growing rapidly in South American countries like Brazil. Brazil already produces nearly as much soybeans as the United States. Increases there have been from 5 percent to 11 percent year in recent years. Government programs tend to promote the growth of soybeans in Brazil, and the weather and other conditions are highly suited to production. With economic forces pushing Brazil toward higher production every year, annual fluctuations in which lower production is noted likely will be more related to weather than long-term trends.
- China is a growing grain market.
With one-fourth of the world's population and a growing economy, China has been, and is sure to remain, a growth area for crop sales for the foreseeable future. This is particularly true for soybeans for human and livestock consumption, and no one sees any way it’s going to be reversed. It might slow down a little bit if the Chinese economy slows, but it’s going to continue growing.
For corn, on the other hand, the Chinese government has decided that they want to try to be self-sufficient. Increasing Chinese production of corn should work to a degree because they can increase the corn production by increasing their yields, which are relatively low. A limiting factor is the necessary land area. In fact, China's farming acreage is getting smaller because of urbanization and desertification.
- Increasing ethanol use is affecting domestic consumption of corn.
Traditional grain consumption figures have revolved around such things as the trends for the size of the national hog or cattle herd or poultry flock. Today, market watchers increasingly are studying plans for ethanol production from corn. Diverting corn to ethanol plants in the United States supports corn prices and encourages more corn acreage to be planted, which creates a fluid dynamic for prices.
Government policy can come into play, as well. Currently, the United States blends all auto fuels with 10 percent ethanol. Brazil, meanwhile, has just moved from 25 percent to 27.5 percent. Most vehicles in Brazil have flex-fuel engines than run on pure ethanol as well as gasoline. The nation is making a big push on biofuels. Almost all Brazilian ethanol is produced from sugar cane, which actually competes very little with Brazilian corn production, but recently the nation has begun to build corn-based ethanol facilities. That is an emerging trend in Brazil driven by a glut of corn production in the interior of Brazil. High transportation cost makes it more cost effective to convert the corn to ethanol than to transport the corn long distances to export facilities.
- South American farmers are quick to adapt new technologies.
- The pace of acceptance of new technologies, especially in South America, is working to change the dynamics for crop production and marketing. This has made Brazil a strong growth market for companies like Monsanto with chemicals and crop varieties, seed provider Pioneer, and equipment giant John Deere. The influx of these technologies has boosted production and taken Brazil to its top status as a soybean producer. This trend is likely to continue even as Brazilian farmers play it cautiously in regard to potential buyer or consumer pressure to avoid some technologies.
- Climate change is altering how and where crops are grown.
- As the long-term trend toward a warmer climate continues we are seeing states such as North Dakota, which did not grow much in the way of corn and soybeans in past decades, becoming a big corn and soybean producing state. In general, corn is moving north and west in the United States. It has moved into Montana, and even into Saskatchewan and Manitoba in Canada with help from new short season corn hybrids. There’s going to be a big increase in corn production in Canada in the next 10 years.