What s Ahead for Agricultural Land Values. Remarks by Mark Pearson Federal Reserve Bank of Chicago Chicago, Illinois November 15, 2011
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- Wendy Sparks
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1 What s Ahead for Agricultural Land Values Remarks by Mark Pearson Federal Reserve Bank of Chicago Chicago, Illinois November 15, 2011
2 Farm Real Estate, Average Value Source: NASS
3 Cropland, Average Value per Acre Source: NASS
4 Farm Sector Business Debt Source: ERS, USDA
5 Farm Sector Equity d Source: ERS, USDA
6 Farm Sector Debt Ratios Source: ERS, USDA
7 Repayment Capacity d Source: ERS, USDA
8 Gross Fed. Debt FY-1900 to FY-2016 Source: usgovernmentspending.com
9 U.S. National Debt Source: U.S. Treasury, CBO
10 Country Sovereign Ratings Source: Reuters
11 Thoughts on the World Economy $71.25 trillion Global GDP $14.89 trillion EU GDP $14.72 trillion U.S. GDP $9.87 trillion China GDP $4.33 trillion Japan GDP $4.04 trillion India GDP Source: 2010 CIA Factbook
12 U.S. GDP FY2004-FY2014 Source: usgovernmentspending.com
13 World Real GDP Growth Source: Int l Monetary Fund
14 U.S. Consumer Confidence Source: Market Harmonics
15 New Housing Starts Source: U.S. Census of Bureau
16 U.S. Industrial Production Source: Federal Reserve
17 10-Year Prime Rate Source: MoneyCafe.com
18 DJIA Five-Year Performance Source: finance.yahoo.com
19 10-Year Treasury Note Yield Source: finance.yahoo.com
20 Five-Year U.S. Dollar Index Source: NYBOT
21 Five-Year Gold Prices Source: kitco.com
22 Light Sweet Crude Oil Source: NYMEX
23 Crude Oil Prices 1970-Oct.2011 Source: WTR Economics
24 Crude Oil Prices 1970-Oct.2011 Source: WTRG Economics
25 China s Total Primary Energy Consumption,
26 China s Demand for Oil Imports
27 Projected Oil Consumption Trends in Key Countries Through 2025 Source: IEA, EIA
28 Vital Maritime Chokepoints Source: EIA
29 10-Year Corn Prices Source: NASS
30 Corn Use: Fuel versus Food Bushels 6 Feed Ethanol Source: USDA
31 U.S. Corn Ending Stocks as Percentage of Use Compliments of PHI Marketing
32 World Corn Ending Stocks As Percentage of Use Compliments of PHI Marketing
33 USDA Corn Supply and Use 2010/11 est. (11/9/11) 2011/2012 proj. Area Planted Area Harvested Yield Beginning Stocks 1,708 1,128 Production 12,447 12,310 Imports Supply, Total 14,182 13,453 Feed & Residual 4,792 4,600 Food, Seed & Industrial 6,428 6,410 Domestic Use, Total 11,220 11,010 Exports 1,835 1,600 Use, Total 13,054 12,610 Ending Stocks Average Farm Price $5.18 $6.20-$7.20 Compliments of PHI Marketing
34 World Corn Supply and Use (est.) (proj.) Beginning Stocks Production Imports Feed Total Exports Ending Stocks Million Metric Tons Compliments of PHI Marketing
35 December 11 Corn Source: CBOT
36 March 12 Corn Source: CBOT
37 10-Year Soybean Prices Source: NASS
38 Projected World Population 2050
39 Brazil s Big Ag Expansion % 60% 50% 40% 30% 20% 10% 0% 24% 46% 36% 39% 48% 68% Coffee Soybeans Cotton Production Exports Source: DTN
40 World Population Density
41 World Population Growth Rate Source: CIA Factbook
42 Youth Bulge Population Impact Millions Afghanistan Iran Pakistan Source: Stanford Center for Longevity
43 Median Age in Mideast Hot Spots 41 Afghanistan Iran Pakistan Source: Stanford Center for Longevity
44 Median Age Global Hot Spots A L G E R I A M O R O C C O 24.2 L I B Y A 24.0 E G Y P T 21.6 S A U D I 20.6 I R A Q 18.0 AF GH AN IS TAN 17.6 SO MA LIA 16.4 YEM EN 15.0 U G A N D A Source: CIA World Factbook
45 Median Age BRICs, PIIGS & More J A P A N 44.2 I T A L Y 43.7 G E R M A N Y 42.2 G R E E C E 41.5 S P A I N 39.7 P O R T U G A L 38.5 R U S S I A 35.4 I R E L A N D 28.9 B R A Z I L 25.9 I N D I A Source: CIA World Factbook
46 Solid as a BRIC? Brazil, Russia, India, China to be among four most dominant economies by 2050 ; 25 percent of world s land mass; 40 percent of global population; $18.48 trillion in combined GDP 41 percent of world s market capitalization by Source: Goldman Sachs
47 How BRIC Stacks Up Part II Middle class in all four countries could reach 200 million by 2025; India alone has 10 of world s 30 fastest-growing urban centers; 700 million to move to cities by 2050; Forbes: March 2011, BRIC has more billionaires than Europe for first time. Source: Goldman Sachs
48 U.S. Soybean Ending Stocks As % of Use Compliments of PHI Marketing
49 World Soybean Ending Stocks as Percentage of Use Compliments of PHI Marketing
50 USDA Soybean Supply and Use 2010/11 Est. (11/9/11) 2011/2012 Projected Area Planted Area Harvested Yield (bushels per acre) Beginning Stocks Production 3,329 3,046 Imports Supply, Total 3,495 3,275 Crush 1,648 1,635 Exports 1,501 1,325 Seed Residual Use, Total 3,280 3,080 Ending Stocks Average Farm Price $11.30 $11.60-$13.60 Compliments of PHI Marketing
51 World Soybean Supply and Use 2009/ /11 (est.) 2011/2012(Proj.) Beginning Stocks Production Imports Crush Total Exports Ending Stocks Million Metric Tons Compliments of PHI Marketing
52 November 11 Soybeans Source: CBOT
53 March 12 Soybeans Source: CBOT
54 10-Year Wheat Prices Source: NASS
55 USDA Wheat Supply and Use 2010/11 (11/9/11) 2011/2012 Projected Area Planted Area Harvested Yield (bushels per acre) Beginning Stocks Production 2,207 1,999 Imports Supply, Total 3,279 2,982 Food Seed Feed & Residual Exports 1,289 1,178 Use, Total 2,417 2,153 Ending Stocks Average Farm Price $5.70 $7.05-$7.75 Compliments of PHI Marketing
56 World Wheat Supply and Use 2009/ /11(est.) 2011/2012 (Proj.) Beginning Stocks Production Imports Feed Total Exports Ending Stocks Million Metric Tons Compliments of PHI Marketing
57 U.S. Wheat Ending Stocks As % of Use Compliments of PHI Marketing
58 World Wheat Ending Stocks as a Percentage of Use Compliments of PHI Marketing
59 December 11 Chicago Wheat Source: CBOT
60 March 12 Chicago Wheat Source: CBOT
61 10-Year Cotton Prices Source: NASS
62 10-Year Cattle Prices Source: NASS
63 10-Year Hog Prices Source: NASS
64
65 Globally Local World: What s Ahead Recovering economy Demographics will drive ag/food product demand Next world industrial expansion: Africa U.S. continues to be ag technology leader U.S., China will drive African development Infrastructure build-out continues in South America Youth bulge means growth in Middle East, but destabilized environment What s this mean for you: Continued strong demand for U.S. agricultural commodities and land values