Bob Young – Chief Economist/Deputy Director Public Policy Farm Credit Council 32 nd Annual Meeting...
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Agricultural Sector Outlook and Challenges Bob Young – Chief Economist/Deputy Director Public Policy Farm Credit Council 32 nd Annual Meeting January 29, 2015 San Francisco
Bob Young – Chief Economist/Deputy Director Public Policy Farm Credit Council 32 nd Annual Meeting January 29, 2015 San Francisco
Bob Young Chief Economist/Deputy Director Public Policy Farm
Credit Council 32 nd Annual Meeting January 29, 2015 San
Francisco
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Energy sector guesses & crop implications The organic
challenge to F&Vs Beefs demographic issue What an amazing ride
& what did we spend our money on? Where does ag and Farm Credit
go from here?
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CountryOil Price Needed CountryOil Price Needed
Iran$136Iraq$116 Kuwait$59Nigeria$124 Qatar$58Saudi Arabia$92
UAE$90Venezuela$117 Source: Oil prices below most OPEC producers
budget needs Reuters, Sept 8, 2014 Rowena Caine Average Weighted by
Production - $98/bbl
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Region$/BarrelRegion$/Barrel Artic$115-122C. & S. America
$29-35 Deepwater$54-60Mid-East Onshore $10-17 North Sea$46-53Oil
Sands$89-96 Russia Onshore $15-21U.S. Shale$70-77
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92 Octane Gasoline Price: $2.71/gal 87 Octane Gasoline Price:
$2.38/gal Cost of Per Point of Octane: $0.067/gal Cost of 113
Octane Ethanol: $2.23/gal Cost of 1 Pt Octne from Eth: $0.02/gal
Ethanol Octane Cost Adv: 84 to 87 Octane: $0.141/gal
644 Farms Produce Half of All Organic Product Sales
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But it is 14% of Fruit & Veggie Sales
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At 2% Net A $2.28 half-gallon bottle of milk adds $0.04 to the
bottom line A $3.75 half-gallon bottle of milk adds $0.07 to the
same bottom line Recognizing All The Retailer Is Really Selling Is
Space Which Would You Rather Sell?
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Would at least ask about their organic production plans Whether
or not consumer agrees, incentive certainly there for retailers to
pander to food snobs Hard to see how we get off this slope You know
how I feel about it
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U.S. Total: -3632 Data Source: USDA-NASS Livestock Marketing
Information Center Average Age of Farmer: 58
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U.S. Total: -3632 Data Source: USDA-NASS Livestock Marketing
Information Center Decline in these herds almost all from herds
less than 50 cows Texas herd decline almost all from 200-500 herd
size
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REAL ESTATE DEBTNONREAL ESTATE DEBT
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Mainline crops need to loose 8-10 million acres.. Usually only
happens with red ink Fruit and Veggies need to consider organic
strategy Cattle sector has and will continue to adjust Rents going
to ratchet down, but will take time