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Corn Industry Trends Tom Lilja [email protected] December 18, 2013.
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Transcript of Corn Industry Trends Tom Lilja [email protected] December 18, 2013.
Ag Revolutions
Mechanical – 1794 Cotton Gin
Chemical – Post World War II
Financial – 1980’s collapse
Biotechnology – mid 1990’s
Protein Revolution today?? Or Logistical??
Fundamental Demand Changes Occurring
3
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
World PopulationMillions
4
Chinese Domestic Corn Feed Demand
0
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
MMT
5
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
1980 1984 1988 1992 1996 2000 2004 2008 2012
Per Capita GDP Rates in SE Asia
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
1982 1986 1990 1994 1998 2002 2006 2010
China India
6
Delta in World Meat Demand
0%
50%
100%
150%
200%
250%
300%
BRIC EU & US
Doubting Thomas
Malthusian Theory – population is inclined to increase more rapidly than the supply of food that such growth necessitates
Can we disprove Malthus?
Yield Enhancement Drought Tolerance
More Corn Per Acre
North Dakota Yield Variability 28% 1975-1995
0
10
20
30
40
50
60
70
80
90
100
1975 1979 1983 1986 1988 1992 1995
ND Avg Yield
North Dakota Yield Stability 15% 1997-2010
0
20
40
60
80
100
120
140
1997 1999 2001 2003 2005 2007 2010
ND Avg Yield
What Helped Stabilize Yield?
• Corn Borer trait (Bt) introduction 1997 Southeast North Dakota
NK 3030 115 bushels / acreNK 3030BT 141 bushels / acre
• Roundup Ready technology in corn and soybeans has not stunted plant growth as with traditional chemicals
• Corn Rootworm Traits• Stacking of Traits
Supply Side Economics ??
90 bushels / acre – mid 1990’s
115 bushels / acre – 2012
25 extra bushels across 3.5 million acres
Or Bonanza??
87.5 million more bushels x $6.67 USDA
$584 million more to ND economy
$2.47 Billion (2004-2008) CAPTS, NDSU
$9.7 Billion (2008-2012) CAPTS, NDSU
Land UseAmount of landto produce onebushel of corn
Soil LossSoil loss per
bushel, above atolerable level
Irrigation
Irrigation wateruse per bushel
EnergyEnergy used toproduce one
bushel
Climate
Emissions perbushel
Corn’s Impacts, 1987-2007
37% 69% 27% 37% 30%
Pesticide Use TrendsIncreasing adoption of hybrids with insect-resistant and
herbicide-tolerant traits have greatly reduced the need forsynthetic applications of herbicides and insecticides.
Insecticide Pounds Per Acre Herbicide Pounds Per Acre
Source: USDA
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
3.5
3
2.5
2
1.5
1
0.5
01990 1992 1994 1996 1998 2000 2002 2005
1990 1995 2000 2005
Actual
Corn Growers BecomeMore Efficient With Nitrogen
COMMERCIAL NITROGEN APPLIED PER BUSHEL OF CORN PRODUCED1980 - 2006 ACTUAL & TREND TO 2030Pounds per Bushel
1.80
1.60 Trend
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
1980 1985 1990 1995 2000 2005 2010 20202015 2025 2030
Source: Blue, Johnson & Associates, Inc.
Source: Blue, Johnson & Assoc. Inc.
Enjoy the Value Added Summit
Contact Info
Tom Lilja – [email protected]
Greg LaPlante – [email protected]
