1. Global Outlook Julian Binfield (binfieldj@missouri.edu)
Food and Agricultural Policy Research Institute
University of Missouri
ReNAPRI Outlook Conference
Nairobi, Kenya
November 10-11, 2016

2. U.S. Election Result
Typically president does not have significant impact on the U.S. farm bill
Will impact competitiveness through changes in regulations and immigration
Republicans will control house, senate and administration
But will they all get along?
There has been a lot of talk about trade in the election. It is trade policy rather than domestic policy that will impact commodity markets

3. Outlook from August FAPRI-MU baseline update
Issued August 2016
Based on mid-August conditions
Remember – things change fast! We don’t have a crystal ball!
Now entering our 2017 baseline cycle

4. Things change fast!
Source: November 4, 2016

5. Exchange rates 2015 2016 2017 2018 Euro per dollar 0.90 0.93
(dollars per euro)
1.11
1.08
(Nov. 4, 2016)
Chinese yuan per dollar
6.28
6.62
6.82
6.97
6.76
Japanese yen per dollar
121
107
106
112
103
Brazilian real per dollar
3.33
3.50
3.68
3.89
3.24
Sources: IHS Global Insight, October 2016 and Nov. 4, 2016

6. Global real GDP growth outlook
2015
2016
2017
2018
World
IHS (Oct.)
2.5
2.2
2.6
2.9
China
6.9
6.6
6.3
6.4
Economist poll (Oct.)
Euro area
1.9
1.6
1.4
1.5
1.3
Sources: IHS Global Insight, October 2016 and The Economist magazine poll of forecasters, October 2016

7. China’s meat consumption (Pork, chicken and beef)
Increase in China’s consumption from : 49 mmt
Total U.S. consumption in 2015: 36 mmt
Source: USDA’s PSD Online, September 2015

8. Biofuels “boom” bust?
Source: Oilworld, September 23, 2016

9. World Price Outlook ($/tonne)

10. Important prices - outlook

11. Policy developments EU U.S.
Has been re-coupling policies
Brexit
Means less money for Common Agricultural Policy
Means a different UK policy environment
U.S.
Has moved away from direct payments
Trade agreements could have impact on policies elsewhere

12. Summary points – Global markets
Global grain and oilseed supplies remain large, depressing prices
Under normal conditions, expect agricultural prices to average well below peak levels
Weather and other factors can always cause a positive (or negative) surprise in any given year
With a mature biofuel sector and questions about China, what will be the future engine of crop demand growth?

13. World population Source: IHS Global Insight, July 2016
The world’s population continues to grow. Asia accounts for most of the world’s population, but Africa’s share is rising. By 2030, Africa accounts for most of the annual increase in the world’s population. Overall, the annual increase in the world’s population peaked in 2013 at 85 million. While growth continues, the world as a whole is growing more slowly. All else equal, this makes it easier to meet food security goals.
Source: IHS Global Insight, July 2016

14. Population

15. Population

16. Population

17. Population

18. Thanks! FAPRI-MU website: www.fapri.missouri.edu
Follow us on
To contact Julian Binfield:
FAPRI-MU team:
Julian Binfield
Sera Chiuchiarelli
Deepayan Debnath
Scott Gerlt
Hoa Hoang
Lauren Jackson
Willi Meyers
Kateryna Schroeder
Wyatt Thompson
Patrick Westhoff
Jarrett Whistance
Peter Zimmel
This material is based upon work supported by the U.S. Department of Agriculture, Office of the Chief Economist, under Agreement # , and the USDA National Institute of Food and Agriculture, Hatch project number MO-HASS0024.
Any opinion, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the view of the U.S. Department of Agriculture nor the University of Missouri.

19. 2015 Missouri estimated corn ARC-CO payments per base acre
Note wide differences in expected payment rates for corn harvested in 2015
Same national price used in all calculations
But differences in 2015 county yields vs average yields cause large differences in payment rates
$0/acre in many counties; over $60/acre in others—all in just one of the 50 states
Jackson
Lafayette
Saline
Johnson
Cass
Bates
Henry
Pettis
Ray
Clay
Clinton
Platte
Buchanan
Caldwell
Carroll
Livingston
Linn
Chariton
Randolph
Howard
Cooper
Moniteau
Morgan
Benton
St. Clair
DeKalb
Miller
Camden
Hickory V
ernon
Boone
Callaway
Audrain
Montgomery
Lincoln W
arren
St. Charles
St. Louis
Jefferson
Franklin
Gasconade
Osage
Maries
Phelps
Crawford
ashington
Pulaski
Cole
Monroe
Pike
Dent
Iron
St. Francois
Ste.
Genevieve
Dallas
Laclede
Polk
Webster T
exas
Wright
Douglas
Ozark
Howell
Shannon
Oregon
Ripley
Carter
Reynolds
ayne
Butler
Christian
aney
Stone
Greene
Pemiscot
Dunklin
New Madrid
Mississippi
Stoddard
Bollinger
Cape
Girardeau
Madison
Scott
Perry
Clark
Lewis
Marion
Shelby
Ralls
Knox
Scotland
Schuyler
Adair
Macon
Sullivan
Putnam
Nodaway
Andrew
Holt
Atchison
Harrison
Worth
Gentry
Daviess
Grundy
Mercer
Cedar
Dade
Lawrence
Barry
McDonald
Newton
Jasper
Barton $0
$1 - $20
$21 - $40
$41 - $60
$61 - $80
Insufficient data
Source: FAPRI-MU estimates based on USDA county yield data and May 2016 estimates of 2015/16 prices