OABA Industry Conference Highlights

first_imgShare Facebook Twitter Google + LinkedIn Pinterest The Ohio AgriBusiness Association (OABA) Industry Conference always features a diverse and interesting program and this year was certainly no exception. Thursday’s topics included an overview of the state’s livestock industries, a look at global grain markets, and regulations, just to name a few. The Friday program for the OABA event included consumer relation efforts, equipment hazards and safety, technology updates, herbicide challenges, and edge of field management.One highlight was the recognition of this year’s OABA Industry Excellence Award winners: Jason Nowakowski, Centerra Co-op: Excellence in Safety & Stewardship; Kevin Brinkman, United Equity Inc.: Excellence in Customer Service; and Kevin Fall, Rosen’s Inc.: Achievement as an EmergingChris HenneyLeader. In addition Chris Henney with OABA provided an update on the state of the agribusiness industry, future challenges and OABA’s new strategic plan. Keynote Speaker Tom Balzer of the Ohio Trucking Association kept attendees laughing when he shared leadership lessons found in YouTube videos. Ohio Department of Agriculture Director Dorothy Pelanda served as the closing session speaker.Ohio Department of Agriculture Director Dorothy PelandaThe conference kicked off with a presentation from Arlan Suderman, INTL FCStone, chief commodities economist. He pointed out a long-term bright future of agriculture and some significant short-term concerns.“We’ll I’m bullish agriculture but we’re going to have to work in order to do it,” Suderman said. “I think we have some real challenges ahead of us in 2019.”Top of mind is the ongoing trade war with China.“Any agreement we do get is going to be good for commodities, specifically corn, wheat, perhaps ethanol and DDGS, also crude oil, liquefied natural gas, and pork. Those are the commodities that stand to benefit,” Suderman said. “I think it is going to be difficult to fix the soybean balance sheet with the trade agreement. Part of that is it is so late in the cycle and we have a big South American crop coming on, even with the weather issues down there.“The second big issue of 2019 is African swine fever. That is dramatically reducing hog feeding in China. The death losses are rather small as a percent of that herd right now — China has 54% of the world’s hogs — but feeders are so afraid of this disease that they are liquidating their herds early and not restocking. Hog feeding is down 15%. USDA is dramatically overstating soybean demand as the South American harvest comes on.”Arlan Suderman, INTL FCStone, chief commodities economist. Photo by OABA.With eroding Chinese demand and a large supply, significant price correction could be coming for soybeans.“There are a lot of farmers and fund managers anticipating that China will fix the balance sheet and they are keeping the soybean market propped up here. I do not see that happening. At some point, the reality of this supply is going to hit us,” Suderman said. “In order to really fix the balance sheet we need to lose 10 million to 15 million acres of soybeans. The last time we had a major loss in soybean acres was in 2007 and we had a new crop soybean to corn price ratio of 1.93 to 1. Doing that with $4 Dec corn would mean $7.73 Nov soybeans. That is the type of adjustment in the market that needs to happen to fix the soybean balance sheet if weather doesn’t do it for us.”If a trade deal with China can be negotiated, many other commodities stand to benefit.“The other commodity balance sheets could improve dramatically if we get a trade deal with China, and I think that is a big if. The deadline in March 1 and no good agreement is reached before the 11th hour. China is willing to throw their ag sector under the bus for an agreement that would avoid addressing the structural issues. I would expect the U.S. team to keep the focus on the structural issues. Before March 1, President Trump and President Xi are going to have to decide how far they are willing to go,” he said. “I do not foresee us having an agreement with structural issues with verification and enforcement, but there may be some common ground where they can make some progress and see some more commodities moving to China. They will need some corn, pork, maybe some ethanol and they want to keep the focus off the structural issues.”last_img

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