Global Wheat Outlook

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Presentation delivered by Dr. Tray Thomas (The Context Network, USA) at Borlaug Summit on Wheat for Food Security. March 25 - 28, 2014, Ciudad Obregon, Mexico.
http://www.borlaug100.org

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Global Wheat Outlook

  1. 1. Global Wheat Outlook February 2014 1
  2. 2. 3 Feeding The World Population By 2050 9.6 Billion WHEAT FEEDS THE WORLD Planning and investment in global agriculture has become critically important The rate of technology development and adoption continues to accelerateFood Price Index, FAO 2014. Food Prices are Trending Upward 0 50 100 150 200 '61 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '14 Deflated Price Index Index (2002-2004=100) An extra billion tonnes of cereals will be needed by 2030 FAO, 2002. World agriculture 2030: Main findings The caloric needs of the planet are expected to soar by 50% in the next 40 yearsFeeding The World Population By 2050 9.6 Billion
  3. 3. 4 Presentation Outline 4 Global Wheat Outlook Wheat Market Attractiveness Technology Developments for Wheat Value Capture Challenges & Opportunities
  4. 4. 55 GLOBAL WHEAT OUTLOOK “WHEAT – MEETING THE DEMANDS”
  5. 5. 6 Sub-Saharan Africa is cause for serious concern, because the number of chronically undernourished people will only decrease from 194 to 183 million. An extra billion tonnes of cereals will be needed by 2030 FAO, 2002. World agriculture 2030: Main findings Cereals prices have risen by an average of 6% per year since 2000 2014 2000 FAO Cereals Price Index 1 in 8 people in the world (868 million) are undernourished The world needs wheat
  6. 6. 7World cereal markets expected to stay tight amid rising production 0 100 200 300 400 500 600 1800 1900 2000 2100 2200 2300 2400 2500 MillionTonnes MillionTonnes Stocks (right axis) Production (left axis) Utilization (left axis) Source: FAO “World Food Situation”, Jun. 2014
  7. 7. 8 China and the EU are the top wheat consumers globally Selected Wheat Consuming Regions (MM MT) Source: March 2014 USDA FAS World Agricultural Production: 2012/13 values 125 120 84 38 34 24 19 18 16 12 11 10 9 8 8 China EU-28 India US Russia Pakistan Egypt Turkey Iran Ukraine Brazil Canada Algeria Morocco Uzbekistan
  8. 8. 9Though the EU collectively produces the highest volume, China is the top wheat producing country. Top 15 Wheat Producing Regions (MM MT) Source: FAO Worldstat, 2012 8 9 10 13 14 16 20 23 27 30 38 62 95 121 136 Argentina Egypt Kazakhstan UK Iran Ukraine Turkey Pakistan Canada Australia Russia US India China EU-28
  9. 9. 1111 GLOBAL WHEAT OUTLOOK “ATTRACTIVE COMMERCIAL WHEAT MARKETS”
  10. 10. 12 Regions were divided into categories of attractiveness Attractiveness Indicators:  Productivity  Commercial Support  Technology Adoption>100,000 >50,000 <100,000 >10,000 <50,000 >1,000 <10,000 <1,000 1,000 Metric Tons Source: USDA FAS 2014 Estimates Production Volume
  11. 11. 13 Portions of North and South America are highly attractive North America South America Argentina Productivity Yield/ha Technology Adoption Commercial Support US  Multinational Support  Potential Growth with technology Argentina  Productivity trending up >100,000 >50,000 <100,000 >10,000 <50,000 >1,000 <10,000 <1,000 1000 Metric Tons United States
  12. 12. 14 Productivity Yield/ha Technology Adoption Commercial Support Europe and Russia are both high producers Europe Former Soviet Union EU  Multinational Support  High productivity  Subsidies Russia  High growth potential >100,000 >50,000 <100,000 >10,000 <50,000 >1,000 <10,000 <1,000 1000 Metric Tons Russia Europe: UK, France, Germany, Switzerland
  13. 13. 15 Productivity Yield/ha Technology Adoption Commercial Support India and China should be attractive markets in the longer- term East Asia  Both are growing to meet populations’ needs  Technology adoption could follow success in cotton India China Africa Africa / Southwest Asia >100,000 >50,000 <100,000 >10,000 <50,000 >1,000 <10,000 <1,000 1000 Metric Tons
  14. 14. 1616 GLOBAL WHEAT OUTLOOK “TECHNOLOGY DEVELOPMENT IN WHEAT”
  15. 15. 17Technological advancements could pave the way for continuous improvement Technology Possibilities Hybrids MAB Yield + Stress Traits Input Traits CP Enhance- ments
  16. 16. 18Collaborations will lead to enhanced breeding and technology development Acquisitions Wheat Breeding, Yield , Drought Tolerance, NUE Drought Tolerance Various Crop Improvements Exchange of Germplasm & Tech. Water Efficiency, & JV to develop wheat technologie Ukrainian breeding Co.’s SORT and EUROSORT. Collaborations 2010 Selected Collaboration Announcements 2013 Selected Collaboration Announcements Collaborations Wheat Breeding: Environmental Stress Hybrid Wheat Research Drought Tolerant Tech. in Wheat Frontier Agri- Science Inc. Increase Productivity General Crop Improvements Heat Tolerant Wheat Varieties (2012) Develop New Wheat Varieties
  17. 17. 19 2013 2014 2015 2016 2017 2018 2019 Later Commercialization Date Source: Annual Organizational Reports via company websites 19 Technology Development Highlights R&D Company Trait Monsanto Herbicide Tolerance Monsanto Enhanced Yield + Stress Tol. Monsanto + BASF Enhanced Yield + Stress Tol. BASF + MPBCRC Fusarium & Drought Tol. Arcadia BioSciences + Mahyco WUE, NUE and Salt Tolerance Arcadia BioSciences + Vilmorin WUE and NUE Arcadia BioSciences + Targeted Growth Herbicide Tolerance Arcadia BioSciences + CSIRO Increased Yield and NUE CSIRO Drought Tol. and Virus Res. Syngenta Fusarium Resistance Syngenta (deVGen) Insect Resistance DuPont Pioneer Hi-Bred Increase Yield, & Fungal Res Several technologies are being developed in wheat over the next decade
  18. 18. 20 Continuous investment in crop protection products in cereals, along with a push into plant health, will create / provide a huge opportunity for growth in wheat value. CP Technology Over 20 new compounds / combinations entered the Cereals Market from 2010 to 2013 Crop protection products continue to be developed for the Cereals market AI Co. Class Launch Bixafen Bayer Fungicide 2011 Fluxapyroxad BASF Fungicide 2012 Sulfoxaflor DAS Insecticide 2013 Examples Only
  19. 19. 2121 GLOBAL WHEAT OUTLOOK “HOW VALUE WILL BE CAPTURED”
  20. 20. 22 Companies are spending money on R&D Overall Seed & Traits R&D Trend Wheat Seed & Traits R&D Trend
  21. 21. 23 Value capture enhances/enables technology investment Higher Value Capture Increased ROI to Developer Increased Developer Investment
  22. 22. 24 Little value is captured in wheat seed In several major wheat producing countries less than 5% of wheat seed is proprietary. Source: GfK Global Seed Market Database 0% to 5% 6% to 20% 21% to 35% 36% to 50% 51% to 100%
  23. 23. 25 How do the mechanisms prevent saved seed and enhance value capture? • Provide a specific mechanism to prevent saved seed OR pay for technology improvement • Incentive for grower to buy new seed • Patent and license protection Any likely value capture mechanisms will likely revolve around hybrid seed, new traits and/or new systems Value Capture Mechanisms Hybrid Seed New Systems Traits
  24. 24. 26 SUMMARY 1. Wheat acreage AND value will trend up 2. Not all markets are equally attractive 3. Advanced wheat technologies are being developed 1.Value capture systems are essential to achieving the full potential of Wheat as a crop Value ≥ Volume
  25. 25. 27 WHEAT FEEDS THE WORLD – bringing productivity to new places – initiating where nothing was – improving what is in place to provide better – building infrastructure to make the most out of the crop – employing the best tools and tactics of manual labor to and through precision technologies 27 It all comes down to productivity.
  26. 26. 28 For Further Information, Please Contact: THE CONTEXT NETWORK 4601 Westown Pkwy, Suite 220 West Des Moines, IA 50266 Phone: 515/225-2204 Fax: 515/225-0039 www.contextnet.com Tray Thomas: 515-988-6601 Context Multi-Client Reports THANK YOU
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