Policies to Meet the Food Needs of a Growing World

Transcription

1 Policies to Meet the Food Needs of a Growing World Bryan Dierlam Cargill, Director, Government Affairs April 17, 2013 Louisville, Kentucky 8 May 2013

2 Key Trends Volatility Sustainability Trade Health & Nutrition Protein Consumption Biofuels Population Growth Income Growth 2

3 GLOBAL FOOD PRODUCTION VS. PRICE (production of grain, rice, major oilseeds, PO, FSHM vs. corn/soybean/wheat futures price index) Percentage change in production Percentage change in price May 2013 Source: USDA

4 world food flows (grains, rice, oilseeds, meals, oils, feed equivalent of meat net interregional in mmt) exporters: more land than people importers: more people than land -200 N Amer S Amer Australia E Eur/FSU C Amer W Euro Asia MidEaAfr

5 More people, more income, bigger appetites mil population (grey bars) grain meat kg / cap / year (lines) sugar/sweeteners vegoil USD income per capita 1997$ May 2013

6 The Effects of Higher Disposable Income Example - Chinese Meat Consumption grew 6-fold in 30 years Meat consumption 1981 (Pork, Broiler, Beef) Meat consumption 2011 (Pork, Broiler, beef) USA 22% 108 Mln Tons Rest of the World 67% China 11% Rest of the World 57% USA 14% China 29% 237 Mln Tons Source: USDA 8 May 2013

7 Biofuels Volumes a Major Shift Grain to ethanol Million Metric Tons Vegoil to biodiesel Million Metric Tons ~9% of world grain market ~14% of world vegoil market May 2013

8 Populations are expanding where it is most difficult to grow food 8

9 Sustainability 9

10 Cargill Supply Chains 10

11 11

12 Cargill Suppy Chains 12

13 Cargill Supply Chains 13

14 Policy Opportunities and Challenges Honor Comparative Advantage Enable Open Markets Invest in Infrastructure Agricultural Productivity Harmonization of Standards Support Smallholder Farm/Property Rights 14

15 COMPARATIVE ADVANTAGE The world will always raise the most food the most economically if every farmer plants the right crop for the soil and climate, and then trades with others. DAVID RICARDO

16 Reactions to Volatility Conflating Security with Sufficiency Comparative Advantage & Trade Export Bans Policy Opportunities in GREEN Policy Challenges in RED Stockpiling & Hoarding 16

17 Disrupted Market Signals Open Markets, Price Discovery, Risk Management Regulatory Barriers Political, Fiscal & Monetary Risk Factors 17

18 Port and River Dredging Fiscal Constraints Transportation Goods to Market Locks and Dams Competitors Infrastructure 18

19 Key driver of production growth: yield increase Genetic improvements and fertilizer intensification drive supply expansion thru yield -- acreage has not been a significant supply drive until recently Index (1975=100) Production Yield Area Source: USDA 8 May 2013

20 Asynchronous Approvals Commercialization before approval in major export markets creates unacceptable risk Biotechnology & Innovation Positive Test at Destination for Unapproved Events Field Escapes 20

21 Export Disaster - Don t Do This! Plants (LT30) (LT30) (Bovine EV) (LT30) (LT30) Open 7/10/08 (Bovine EV) (Bovine EV) (LT30) (LT30) Approved U.A.E. Chile Colombia Dominican El Salvador Hong Kong Japan Korea Lebanon Mexico Panama Peru Russia Singapore St. Lucia Taiwan Thailand Ukraine Vietnam As of 8/18/06 As of 4/30/10 10/1/2008 Dodge City, 86K, Millard Dodge N Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y 10/1/2008 Relisted 11/17/08 Friona, 86E N Y Y Y Y N Y Y Y Y Y Y Y Y Y Y N Y Y As of 4/8/08 Relisted 7/12/07 Ft. Morgan, 86R N Y N Y Y N Y Y Y Y N N Y N Y Y N Y Y As of 9/07 Plainview, 86H N Y Y Y Y N Y Y Y Y Y Y N N Y Y N Y Y Relisted 11/25/08 Schuyler, 86M N Y Y Y Y N Y Y Y Y Y Y Y N Y Y Y Y Y Fresno, 354 Wyalusing, 9400 As of 7/12/07 Allow Canadian YES NO-direct slau YES YES YES YES-AV YES YES YES YES NO-direct slau NO-direct slau NO YES YES YES YES YES Cattle? NO-A Days in U.S. 100 days for bone-in Age Requirement <30 None <30 <30 <30 <21 <30 <30 <30 None None <30 <30 <30 <30 <30 <30 <30 General Product Boneless >30, boneless Beef prods Boneless Boneless Boneless, Boneless Boneless Boneless, >30, boneless >30, boneless Boneless & Boneless Boneless Boneless, Boneless Boneless, Boneless, Requirements Beef Only FTB OK Offals Beef Only Beef Only Bone-in & Bone-in & Bone-in Bone-in & FTB OK FTB OK Bone-in Beef Only Beef Only Bone-in as Beef Only Bone-in Bone-in Tongues (no Offals Offals (no of 11/2/09, Offals <30, boneless Hanging headmeat) No >30s intestines,) <30, boneless <30, boneless No GB must be <30 & bone-in Tender is OK for the QSA No AMR & bone-in & bone-in CDN 100 days U.S. Trim OK per the QSA No Diaphram Special Halal Tallow is not No AMR No Offals, No Mex 7/10/2008 Prod must be Boneless We are not We are not Cannot No Mex No Offals Effecitve No AMR No AMR Considerations Slaughter part of the EV No AMR Cattle for Slau Date rec'd w/in 180 Beef from listed for >30s listed for >30s produce until cattle for 4/1/10 No Offals Only Maintain direct Slau of slaughter Canada is on-site audit direct slau certain offals after 7/15/10 CMS not traceback of Mex cattle Must be on eligible OK to ship kill date listed for >30s cattle to prod Begin w/ do not need vessel w/in 30 (No Cdn No Imported No Trim 7/27/06 Slau 100 days in US days of cert trim) Beef Mex 100 days Allow GB? N Y Y Y N N N Y N Y Y N N Y N N Y Y Require SOV? Y Y N Y Y Y N Y N Y Y Y Y Y Y Y Y Y Specific Offals None Aorta None None None, incl Tongue-all Abomasum None Cheekmeat Aorta Heart None None Tendon None Aorta None (Eligible) Backstrap Diaphram & Abomasum Heart Backstrap Liver Tongue Backstrap as of 9/14/10 Cheekmeat Outside Skirt 86R Only Kidney Cheekmeat Tongue Cheekmeat Heart Livers, Liver Heart Heart Kidney Tendons Omasum Kidney Kidney Liver 86K, M, R Oxlips Liver Liver Omasum Only Tongue Omasum Omasum Oxlips Offals Tripe Oxlips Oxlips Tendon be written in Trimmings Tendon Tendon Tongue the EV and Tongue Tongue Tripe approved by Tripe Tripe AMS

22 Export vs. Domestic Market $60+ advantage/head on 7 products Product Value in Export Market $ Value/# Lb/Hd $/HD/Export Value in Domestic Market $ Value #/hd $/HD/US Short Ribs Korea $ $30.00 US/Canada $ $ 8.00 Navels Japan $ $32.00 US/Canada $ $ Finger Meat Korea $ $2.50 US/Canada $ $ 0.80 Digital Muscle Taiwan $ $2.25 US/Canada $ $ 1.50 Liver Russia/Egypt $ $7.80 US/Canada $ $ 1.56 Oxliips Mexico $ $2.10 US/Canada $ $ 0.23 Tongue Japan $ $15.00 US/Canada $ $ 0.30 $91.65 $ 28.39

23 Inconsistency Create Consumer Confusion Harmonization Trade Frictions Delays 23

24 Property Rights 24

25 The Values Question Values vs. Technology Tin vs. Food Managing the Dichotomy Anonymity vs. Story Food Knowing Your Farmer and Agricultural Values Improve our Messaging Who do we talk to? 25

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