Niagara Falls, October 2009 WORLD AGRICULTURAL SITUATION Niagara Falls, October 2009.

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<ul><li><p>WORLD AGRICULTURAL SITUATION Niagara Falls, October 2009</p></li><li><p>Farmers had a miserable time in 2008 and early 2009 Scarce credit owing to banking crisis</p><p> Reduced demand owing to recession</p><p> Fall in trade with product backed up on domestic markets</p><p>Collapse in commodity prices in 2nd half 2008</p><p>High input prices especially for fuel, fertiliser and feed</p></li><li><p>Global Recovery 2009-2010</p><p> World emerging from deepest recession in 60 years</p><p> Recovery led by Asia</p><p> Massive intervention by govts. to stimulate economic activity</p></li><li><p>Economic Growth-advanced economies</p></li><li><p>Economic Growthdeveloping countries</p></li><li><p>Real GDP Growth (%) World &amp; Advanced countriesSource: IMF</p></li><li><p>Recovery in the BRIC Countries</p></li><li><p>Trade and commodity prices are recovering</p><p> Trade is picking up especially with Asia</p><p>Commodity prices are recovering</p><p>Food and agriculture was more resilient to the recession than other sectors</p></li><li><p>Trade volume &amp; Commodity prices (% changes)</p></li><li><p>Export growth from 2006-08 average to 2018Developing countries driving growth in farm exports</p></li><li><p>Exchange rate movements (Index 2000=100)Major currenciesEmerging and developing economies</p></li><li><p>Commodity Price Developments</p></li><li><p>Commodity and Petroleum Prices</p></li><li><p>Impact on farmersOil prices rising faster than food prices</p><p>Low inflation &amp; interest rates</p><p>Large govt. fiscal imbalances</p><p>Stable food and agric. markets</p></li><li><p>Inflation &amp; Interest Rates</p></li><li><p>Government Fiscal Balances (% GDP)Source: IMF</p></li><li><p>Major Food Crops - pricesSource: IMF</p></li><li><p>Major Food Crops - stocks2) Corn, soybeans wheat, rice. Source: IMF</p></li><li><p>Major Food Crops - demandSource: IMF</p></li><li><p>Major Food Crops - biofuelSource: IMF</p></li><li><p>Demand for vegetable oilSource: OECD</p></li><li><p>Meat &amp; Dairy pricesSource: OECD</p><p>Chart1</p><p>235.8232232258166.2650916667129.64819065151.4903846154179.3461538462213.3653846154</p><p>218.612963871106.3116755556139.111522174.8557692308170.25195.0480769231</p><p>233.1207858065104.1070555556128.088422134.5192307692150.1923076923175.5192307692</p><p>247.664166129136.8701583333123.899644122.8846153846181.8173076923182.875</p><p>258.5450325806140.2689475130.293042132.4519230769201.5096153846217.1634615385</p><p>238.3834270968106.92407122.576872104.4230769231137.3557692308170.1442307692</p><p>301.1439803226120.7948041667136.68644134.3269230769176.1057692308189.6153846154</p><p>301.3573306452160.7841613889163.362342179.1346153846202.2115384615261.3461538462</p><p>310.3536025806153.2517097222156.087096212.9807692308226.2019230769283.8461538462</p><p>303.7041841935144.7088072222141.977528177.2596153846218.6538461538268.1730769231</p><p>326.4971103226144.1882719444168.432968293.8461538462416.7307692308402.2115384615</p><p>328.0972377419146.4847511111175.708214364.9038461538391.3461538462468.0769230769</p><p>323.2878149587146.9107083358179.0305789866182.791173782190.3493281145269.7995532508</p><p>299.3255069978142.1302457505165.7186952884180.9812263824196.2270391603248.537616715</p><p>299.462748535147.7293244812162.3964545412201.9049240986219.6575656217266.3339484225</p><p>318.2806217385160.9112795571167.5433750032223.1312401339234.524254218283.2512467924</p><p>322.4142685556157.596097751168.6338645304233.4617325018246.3954124567290.9899551077</p><p>332.5200529576155.2909043286177.709509268237.251903168256.0057318887299.5744565984</p><p>330.746020269151.311516914177.8370971202244.0972597342258.408798112304.3087418741</p><p>328.0201512665154.107784404175.7765209177247.2012692248261.9829225507309.4664610144</p><p>324.7603687489157.8111353066172.2073226687249.8107087499264.9835554328313.495633715</p><p>324.9610745639163.2490737517174.1112471777254.9401437798268.5903778392317.8080079312</p><p>Beef</p><p>Pork</p><p>Poultry</p><p>Butter</p><p>WMP</p><p>Cheese</p><p>USD/100kg</p><p>Sheet1</p><p>1997199819992000200120022003200420052006200720082009201020112012201320142015201620172018</p><p>Beef235.82218.61233.12247.66258.55238.38301.14301.36310.35303.70326.50328.10323.29299.33299.46318.28322.41332.52330.75328.02324.76324.9610745639</p><p>Pork166.27106.31104.11136.87140.27106.92120.79160.78153.25144.71144.19146.48146.91142.13147.73160.91157.60155.29151.31154.11157.81163.2490737517</p><p>Poultry129.65139.11128.09123.90130.29122.58136.69163.36156.09141.98168.43175.71179.03165.72162.40167.54168.63177.71177.84175.78172.21174.1112471777</p><p>Butter151.49174.86134.52122.88132.45104.42134.33179.13212.98177.26293.85364.90182.79180.98201.90223.13233.46237.25244.10247.20249.81254.9401437798</p><p>WMP179.35170.25150.19181.82201.51137.36176.11202.21226.20218.65416.73391.35190.35196.23219.66234.52246.40256.01258.41261.98264.98268.5903778392</p><p>Cheese213.37195.05175.52182.88217.16170.14189.62261.35283.85268.17402.21468.08269.80248.54266.33283.25290.99299.57304.31309.47313.50317.8080079312</p><p>Sheet1</p><p>0.66821006240.80130293130.7218934911</p><p>0.62200090760.92833876250.8698224852</p><p>0.72534905550.90553745970.8579881657</p><p>1.11862881031.40065146571.0710059172</p><p>111</p><p>0.77524005860.90553745970.8934911243</p><p>0.64402159170.76682953320.8402366864</p><p>0.58515976780.7266558090.6834319527</p><p>0.6868343010.73534201960.544871795</p><p>0.67924374760.76547231280.5670611441</p><p>0.86822546520.8792073830.5904832346</p><p>0.84385793580.95901194360.6535996056</p><p>0.82035841530.80618892520.8234714003</p><p>Wheat</p><p>Coarse grains</p><p>Rice</p><p>Figure 3. World price prospects(index 1992=1)</p><p>WLD_WT_XP</p><p>WLD_CG_XP</p><p>WLD_RIXP</p></li><li><p>Meat consumption increases are mainly in developing countriesSource: OECD</p></li><li><p>Policy needs Correct fiscal imbalances Increase investment in agriculture Incentives to mitigate and adapt to climate change Strengthen banking regulations to reduce excessive risk takingStrengthen competition policy especially in retail distribution sector Include risk management instruments in farm programs</p></li><li><p> The world economy is growing again along with trade - but growth is slow and uncertain Farm commodity markets are strengthening However, credit to remain tight; weather patterns irregularOverall the future looks better for farmers until of course the next economic recession due around 2020</p><p>Conclusions</p></li><li><p>www.ifap.org</p><p>Thank you for your attention the farmers voice at the world level</p><p>*****</p></li></ul>