What is in this article?:
• China has the second largest middle class in the world at 157 million, which will surpass the U.S.'s middle class in the next 10 years, so China's demand for agricultural commodities is going to continue to grow.
• Continued weather extremes will be dominant factor for North American food and agribusiness.
• What factor will most influence acceptance of GMOs? High commodity prices
Notably, 68 percent of attendees named weather extremes/volatility as the single biggest factor affecting North American food and agribusiness in 2013. That concern far outweighed the next two closest factors — consumer demand (13 percent) and policy/regulation (10 percent).
Geopolitical events, trade/tariffs/exchange rates, and policy/regulation all received votes in the single digits.
"Given that the North American industry, particularly the U.S., is in the middle of the worst drought in over 50 years," said Cordingley, "these views are quite understandable and represent a significant issue that is top of mind for most food industry players as we enter 2013."
Agribusiness increasing risk management in response to volatility
Reflecting the concern over continued weather volatility, 59 percent of respondents said the 2012 drought has changed their views about risk management in their business. Executives at the Rabobank Forum cited an increased focus on financial liquidity (25 percent), increased investment in risk management and insurance (21 percent), and greater diversification (13 percent) as their three leading solutions to hedge against continued volatility in weather patterns and commodity markets.
66 percent expect U.S. corn yield to exceed 200 bushels per acre by 2025
"Corn is a critical input to the North American food industry, and strong and consistent yield growth has underpinned the industry in the U.S. for the past ten years. Despite the enormous gains already made due to precision farming, GMOs, and other technologies, attendees at the Forum were very bullish in terms of their outlook for this trend to continue longer term," said Cordingley.
Over 90 percent of executives at the Rabobank Forum said they expect U.S. corn yields to exceed 170 bushels per acre by 2025: notably, over a quarter (26 percent) forecast yields of over 250 bushels per acre, while 40 percent forecast yields of between 200 bushels per acre and 250 bushels per acre.
Those expectations compare to U.S. trend line yields of between 150-160 bushels per acre in recent years, prior to this year's drought-driven decline to 120 bushels per acre.
Impact of social media on food & agribusiness sector
Social media played a significant role in the news earlier this year about the use of lean finely textured beef (LFTB) in U.S. beef processing.