Economic Outlook: 2018 and Beyond Independent Professional Seed - - PowerPoint PPT Presentation

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Economic Outlook: 2018 and Beyond Independent Professional Seed - - PowerPoint PPT Presentation

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Economic Outlook: 2018 and Beyond Independent Professional Seed Association Matthew C. Roberts, PhD | www.kernmantlegroup.com 10 January 2018 So its all good news, right? No. There are some major challenges, too. Policy: Trade (NAFTA,

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Economic Outlook: 2018 and Beyond

Independent Professional Seed Association

Matthew C. Roberts, PhD | www.kernmantlegroup.com 10 January 2018

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So its all good news, right? No.

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There are some major challenges, too.

  • Policy:
  • Trade (NAFTA, WTO, KORUS)
  • Farm Bill
  • Infrastructure
  • Ethanol
  • Macro
  • It’s time for a recession
  • Commodity Cycle
  • Crops are still weak
  • Rents are still high
  • Export Competition is high
  • What Fad will strike next?
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I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics, philosophy, […] commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.

  • -John Adams, 1780
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My father studied politics and war so that I may have liberty to study mathematics and philosophy. I studied mathematics, […] commerce, and agriculture, in order to give my children the right to create hashtags such as #Resist and #OccupyWallStreet, spend thousands on tattoos and piercings and organize anti-globalist protests at Starbucks on their MacBooks.

  • -Matt Roberts (2017)
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The Commodity Cycle: Crops

  • We remain 2-3 years out until profits in the crop

sector normalize.

  • Normalize means $50-$75/acre to management.
  • Rents must continue to decline
  • Prices will strengthen some
  • Acres will shift to soy away from corn and wheat

due to higher demand.

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Cash Rents are Finally Weakening

MN IA NE IN

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Put it all together…

  • All forces still point forward for Ag.
  • Crops are still consolidating
  • Livestock is profitable
  • Trade is the biggest worry
  • There will be a recession
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What should you be doing?

  • How will you survive disintermediation?
  • Rethink your product offerings
  • Is a hat enough any more?
  • Be financially conservative.
  • Go long & fix on borrowing.
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Questions?

Matthew C. Roberts, PhD | www.kernmantlegroup.com | @YourEconProf 10 January 2018