A recent poll shows China’s influence on agricultural commodity demand and global economic growth – along with increasing weather extremes – are key issues for North American food, beverage and agribusiness in 2013.
Three-hundred-fifty executives from leading companies in these industries were polled at a Rabobank Markets Forum in New York City. Sixty-one respondents said China will have the greatest impact on global agricultural commodity demand over the next 10 years. India was the second most-mentioned country at 14-percent. The large majority of the executives polled by Rabobank also see China continuing to be the most important driver of long-term global economic growth. Forty-one percent of those responding said China would drive the economy for between five and 10 more years – with 40-percent saying China will remain the primary driver of global economic growth for the next 50 years.
Nearly 70-percent of those polled named weather extremes and volatility as the single biggest factor affecting North American food and agribusiness in 2013. The next two closest factors were consumer demand with 13-percent and policy/regulation with 10-percent. Speaking of weather – the 2012 drought has changed views about risk management in the business of 59-percent of respondents. Executives at the Rabobank Forum cited an increased focus on financial liquidity, increased investment in risk management and insurance and greater diversification as the three leading solutions to hedge against continued volatility in weather patterns and commodity markets.
Despite the concern about weather – over 90-percent of executives said they expect U.S. corn yields to exceed 170-bushels per acre by 2025. Twenty-six percent even forecast yields of more than 250-bushels per acre – with 40-percent expecting yields between 200 and 250-bushels per acre.