slide1 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Presenter name Subject PowerPoint Presentation
Download Presentation
Presenter name Subject

Loading in 2 Seconds...

play fullscreen
1 / 50

Presenter name Subject - PowerPoint PPT Presentation


  • 63 Views
  • Uploaded on

Agrimark trends Agric outlook 2 October 2008. Presenter name Subject. Agricultural outlook - Content. General market trends Field crops Maize, Wheat, Sunflower, Soya Fibre Cotton, Wool, Mohair Livestock Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Presenter name Subject' - winter


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Agrimark trends

Agric outlook

2 October 2008

Presenter name

Subject

agricultural outlook content
Agricultural outlook - Content
  • General market trends
  • Field crops
    • Maize, Wheat, Sunflower, Soya
  • Fibre
    • Cotton, Wool, Mohair
  • Livestock
    • Poultry, Pork, Beef, Mutton, Dairy Ostrich
  • Vegetables
    • Tomato, Potato, Cabbage, Carrots
economic market principals with in agriculture

SA Agricultural's Exposure to the International Market

45,000

80%

40,000

70%

35,000

60%

30,000

50%

25,000

(R '000)

40%

20,000

30%

15,000

20%

10,000

10%

5,000

0

0%

1980

1985

1990

1995

2000

2005

Exports

Imports

Import + Exports as % of GPV

Economic market principals with in agriculture
  • Comments
  • South African farmers face a 60% plus price exposure to the outside world and are therefore by implication global players in a global market.
  • They therefore have very little control over pricing levels and tend to be price takers, with prices ranging between import parity and export parity depending on local supply and demand resulting in increased price volatility
  • Factors influencing prices over which they have no control are international production trends, international farming subsidies, exchange rates, import and export tariffs.
  • Production risk due to nature also contributes to production volatility which in turn lead to an increase in price volatility
  • Framers therefore have to manage PRICE and PRODUCTION if they want to make a success of their business
new market environment technology is changing the world
New Market environment – Technology is changing the world
  • Pointers
  • Demand technology
    • Taste enhancement / Packaging / Presentation / Time value enhancements
    • Variety, safety and convenience is taken as a given
  • Information technology
    • Connectivity
    • Here now attitude
  • Transport technology
    • World is becoming a smaller place
    • Delivery just in time
  • Storage technology
    • Improved shelf life
    • No more seasonality
  • Production technology
    • GMO’s - Selection / fertilizers etc.
    • Productivity enhancement
economic market principles within agriculture
Economic market principles within agriculture
  • Cost curve
  • In the long term agriculture is experiencing a cost curve of approximately 3% per annum (The price of Farming requisites increases faster than producer prices however for 2008/09 season we expect a cost curve of more than 30%
  • To survive this, farmers need to become more productive (increase output in relation to inputs) this is mainly done by:
    • Improving production efficiencies (use of technology)
    • Value adding
    • Lowering fixed costs (economies of scale)
  • World agriculture is poised to enter a new growth phase that will be much greater than colonization and industrialization.
    • During the period of industrialization after the second world war, agricultural production expanded exponentially, compared to the growth in population (due to the development of fertilizer and production machinery).
    • Production of coarse grains, beef and mutton however peak during mid eighties as these commodities were mainly dependent on the availability of natural resources. Commodities like poultry and pork continued to grow as they were able to utilize surplus coarse grains.
    • Production has however once again since the mid nineties started to increase due to advances in geo-technology (GMOS etc.)
  • The net effect of the above is that production volumes will continue to increase thus improving the survival potential of agriculture in general
slide9

Economic market principals with in agriculture

  • World agriculture commodity prices to increase substantial over the medium term.
  • There are two main driving forces at work that will have a positive impact on agricultural commodity prices namely:
  • Global Warming
    • Sentiment around global warming is driving legislature around the world to continuously push for the implementation of so-called carbon friendly legislation. As agriculture is the prime beneficiary this type of legislation (due to the ability of plants to extract carbon from the air) new markets will place upward pressure on agricultural commodity prices. Agriculture could however never produce enough energy to replace all fossil fuels.
  • Demand for Food and Energy
    • During the late nineties Capitalism replaced Communism as economic system in the world (signs of the time where the collapse of the Berlin wall in ’98 the repatriation of Hong Kong in to China in ‘99)
    • This led to an exponential economic growth in Eastern European, Middle East and Asian countries with a resulting increase in the buying power of these consumers, hence the growth in demand for food and energy
agricultural outlook content1
Agricultural outlook - Content
  • General market trends
  • Field crops
    • Maize, Wheat, Sunflower, Soya
  • Fibre
    • Cotton, Wool, Mohair
  • Livestock
    • Poultry, Pork, Beef, Mutton, Dairy Ostrich
  • Vegetables
    • Tomato, Potato, Cabbage, Carrots
agricultural outlook content2
Agricultural outlook - Content
  • General market trends
  • Field crops
    • Maize, Wheat, Sunflower, Soya
  • Fibre
    • Cotton, Wool, Mohair
  • Livestock
    • Poultry, Pork, Beef, Mutton, Dairy Ostrich
  • Vegetables
    • Tomato, Potato, Cabbage, Carrots
agricultural outlook content3
Agricultural outlook - Content
  • General market trends
  • Field crops
    • Maize, Wheat, Sunflower, Soya
  • Fibre
    • Cotton, Wool, Mohair
  • Livestock
    • Poultry, Pork, Beef, Mutton, Dairy Ostrich
  • Vegetables
    • Tomato, Potato, Cabbage, Carrots
agricultural outlook content4
Agricultural outlook - Content
  • General market trends
  • Field crops
    • Maize, Wheat, Sunflower, Soya
  • Fibre
    • Cotton, Wool, Mohair
  • Livestock
    • Poultry, Pork, Beef, Mutton, Dairy Ostrich
  • Vegetables
    • Tomato, Potato, Cabbage, Carrots
slide50

Thank you for the opportunity to share some ideas

Contact details

E Janovsky

Tel (011) 350 6102

Emailernst.janovsky@absa.co.za