Elite Producer Business Conference Las Vegas, Nevada November 6, Chris Policinski President and CEO Land O Lakes, Inc.

Transcription

1 Elite Producer Business Conference Las Vegas, Nevada November 6, 2012 Chris Policinski President and CEO Land O Lakes, Inc.

2 Telling Our Story Listening to the Marketplace

3 Our Story. The Great Untold Productivity Story of American Agriculture

4 U.S. Farmers Lead Ag Productivity Total output 1 Total inputs 2 Changes in US agricultural output, inputs, since 1948 Index 1948 = 100 ~250% Farming practices Technology One farmer 25% of income spent 22% of the US workforce In 1930 fed 10 people on food in Ag Today One farmer feeds 155 people 10% of income spent on food 1 Total output is an aggregation of crop and livestock commodities and related services 2 Total input is an aggregation of land, labor, capital and intermediate inputs like fertilizer, feed and seed SOURCE: Productivity Growth in US Agriculture, USDA (2007); Economic Research Service; American Farm Bureau Federation 2% of the US workforce in Ag 4

5 U.S. Ag Productivity Drivers Adoption of modern business, production management practices on the farm Application of safe, proven agricultural technologies

6 In Agriculture.Consumer Perceptions Big = Bad Technology = Scary

7 The Great Divide Good or Bad Agriculture Large or Small Specialized or Diversified High-Tech or Traditional Biotech or Conventional or Organic

8 The Risk of Misperception 98%+ of U.S. population are NOT farmers False perceptions can take root influencing public opinion Public opinion can quickly become public policy

9 Productivity Story Even More Important The food industry is one of the great growth industries of our era. World population to grow from 6.8 billion to more than 9 billion by 2050 Global food production will have to increase 70% to meet higher demand SOURCE: United Nations Food and Agricultural Organization World Food Day 2010

10 Challenge: Finite / Stressed Resources There is, at most, 12% more arable land available globally Analysts expect only 5% more land will be cultivated by 2050 Demand expected to outstrip water supply by 40% by 2030 We will have to produce more with less. SOURCES: OECD-FAO, global water supply/demand model; agricultural production based on IFPRI computed general equilibrium model base case; A Daunting Task, Prof. Robert Thompson (2010)

11 The Risk There has been further rioting in parts of the Algerian capital by hundreds of youths angry over increasing food prices. BBC, January, 2011 Highly Publicized Food Riots Indications are that the food crisis of 2008 was a dress rehearsal for future crisis. Paul Krugman, March 2009 Riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention. CNN, April 2008

12 What Can We Do? 1. Build a fact-based understanding of agriculture Advocate but also educate 2. Listen to messages from the marketplace Feedback = opportunity to learn / respond Translate into stronger agriculture and food systems

13 U.S. Farmers Lead Ag Productivity Total output 1 Total inputs 2 Changes in US agricultural output, inputs, since 1948 Index 1948 = 100 ~250% Farming practices Technology One farmer 25% of income spent 22% of the US workforce In 1930 fed 10 people on food in Ag Today One farmer feeds 155 people 10% of income spent on food 1 Total output is an aggregation of crop and livestock commodities and related services 2 Total input is an aggregation of land, labor, capital and intermediate inputs like fertilizer, feed and seed SOURCE: Productivity Growth in US Agriculture, USDA (2007); Economic Research Service; American Farm Bureau Federation 2% of the US workforce in Ag 13

14 Need Size / Technology to Feed 9 Billion! Advanced Management Practices, Technology Are THE Most Essential Productivity Levers Sources of growth in crop production, Percent 23% Arable land expansion / cropping intensity SOURCE: FAO Expert Meeting on How to Feed the World in 2050 (2009) 77% Yield increases via technology / management practices Advances in production practices and technology are needed to achieve the yields the world requires

15 The world has the technology, either available or welladvanced in the research pipeline to feed a population of 10 billion people. The more pertinent question today is whether farmers and ranchers will be permitted to use this new technology. Dr. Norman Borlaug

16 Listen to Messages From the Marketplace Feedback = Opportunity to Learn / Respond

17 Stewardship / Sustainability No one has a greater stake in good stewardship of the environment and sustainable agricultural practices than the farmer.

18 Productivity Drives Sustainability! 2007 vs. 1944: per gallon of milk, dairy farmers used Only 10% of the land Only 35% of the water resources 2007 vs. 1944: per gallon of milk, dairy farming generated Only 24% of the manure Only 43% of the methane cattlenetwork.com July 7, 2010 Megan Pierce, Dairy Herd Magazine

19 Productivity Drives Sustainability! % more corn on 13% fewer acres Source: USDA Economic Research Service

20 Responding to the Green Message The facts are very friendly! Productivity = Authentic Sustainability

21 And Go on the offensive to improve sustainability performance in agriculture

22 Let s talk about production agriculture not only in output or economic terms but also in environmental terms.

23 Animal Welfare Message The public wants and demands, responsible animal care. Undercover video shows abuse of sick cows USDA begins investigation to discover if downer cows may have ended up in school lunches CBS News Animal rights group s video depicts abuse of chickens at egg farms San Francisco Chronicle

24 The Irony of the Animal Welfare Debate Most farmers are very sensitive to animal wellbeing and already operate at a high standard. I have my life invested in my farm and my animals of course, I want to provide the best care I can they are the future of my operation. Quality care is in my best interests, healthy animals are more productive. It makes economic sense and it s just the right thing to do.

25 Responding to the Animal Welfare Message Most farmers are sensitive to animal care issues but not all We must advocate the industry must adopt formal animal care standards and self enforce

26 Food Safety / Quality Message The public wants assurances that the food they purchase is safe and healthful.

27 Food Safety / Quality Reality = Perception The American food supply is the safest in the world, thanks to industry and government efforts. Dr. Jean Weese, PhD., Professor and Food Scientist Extension Specialist, Auburn University

28 Recalls Create Concern

29 Food Safety / Quality There is not good versus bad food based on the type of agriculture just different food.

30 There is Not Just One Nutritious Food Supply Higher concentrations in organic or conventional crops? 1,2 Based on a review of selected studies between Jan 1958-Feb 2008 Nutrient No difference Organic Conventional Nitrogen Titratable acidity Phosphorus Magnesium Calcium Vitamin C Potassium Zinc Total soluble solids Copper Phenolic compounds SOURCE: Nutritional quality of organic foods: a systematic review (The American Journal of Clinical Nutrition, 2009) A review of 55 available studies indicates that organic and conventional foods have similar nutrient content 1 A statistically significant (at P=0.05) difference in the reported mean nutrient counts of conventionally and organically produced foodstuffs 2 Due to an insufficient number of studies to compare nutrient content for specific foodstuffs, nutrient categories were compared across all studies. Only nutrient categories reported in 10 or more studies were included in this analysis

31 Organic vs. Conventionally Grown Foods New Stanford University Study Confirms No Significant Differences... the most comprehensive meta-analysis to date of existing studies comparing organic and conventional foods They did not find strong evidence that organic foods are more nutritious or carry fewer health risks than conventional alternatives Source: Stanford University, Sept. 3, 2012

32 Call to Action 1. Tell our story Advocate Educate 2. Listen to the marketplace Learn Respond

33 Co-existence and Choice Large and Small Specialized and Diversified High-Tech and Traditional Biotech, Conventional and Organic

34 Conclusion: Future Success will be Driven by Co-existence and Choice Large-scale farms driven by science and technology, connected to consumers through global supply chains AND Small-scale farms connected to consumers through local food networks Meet global food demands Keep local/rural communities and infrastructure vibrant

35 We Have To Get This Right! Food Security Economic Security Political Security

36 THANK YOU!