Demand Drivers

Short-Term Demand Drivers

• Grain prices
• Grain inventories
• Weather
• Crop yields
• Crop mix
• Planting intentions
• Fertilizer inventories
• Shipping rates
• Exchange rates
• Current economic conditions
• Dumping
• Feedstock costs
• Availability of credit

Mid-Term Demand Drivers

• New capacity announcements
• Plant shutdowns and mine closures
• Current economic conditions
• Changing tax regimes and government policies
• Energy price changes
• Shrinking agricultural land base
• Adoption of genetically modified seeds
• Irrigation improvements
• Political unrest
• Cash costs of swing producers
• Permanent capacity utilization rate changes
• Farmer income, subsidies, protection, and financing

Long-Term Demand Drivers

• Global population growth – could increase by 40%+ by 2050
• Arable land per capita is shrinking fast
• Global meat consumption per capita is increasing
• One tonne of poultry requires feed corresponding to 2 tonnes of grain
• One tonne of pork requires feed corresponding to 4 tonnes of grain
• One tonne of beef requires feed corresponding to 7 tonnes of grain
• Global GDP growth should get back on track – higher disposable incomes lead to a demand increase for higher-protein diets, including the consumption of more meat, and higher-quality fruits and vegetables
• Adoption and growth of biofuel markets