Each year, the most well-attended sessions at ASTA’s Field Crop Seed Convention are economist Dan Basse’s Agriculture Economy Report and the “Majors Panel”, which brings together senior leaders from the ‘Big Four’ to talk about the year ahead. This year was no different: the sessions were packed.
Dan Basse, an economist with AgResource, offered his annual update on the global agricultural market, following up on his predictions from 2022 to help to shed light on what global markets have in store for the seed industry in the year ahead.
Basse talked about current global conflicts, Russia and Ukraine, and Israel and Hamas, and how escalation of these two theater wars will have a lasting impact on agriculture. But perhaps even more of a factor is the decreasing value of the U.S. dollar.
“The debt of the United States is about $33 trillion, rising to near $40 trillion within the next three years,” he said. “That’s something I believe is going to put the dollar under pressure.”
Another big challenge going forward will be the climate, no surprise. Basse explained that record-low river levels in the Mississippi River and the Amazon River in Brazil, with no real relief in the near future, will lead to trade and transportation challenges. Add in the low levels at the Panama Canal spells trouble all around.
“As we look at the world as it sits today, I’m becoming more concerned about climate change and what it means about feeding the world going forward,” Basse said.
Basse also spoke about China and its importance to the world economy.
“You can’t pick up a newspaper in the United States and not find a bashing of China,” he said. “We need to remember that China is our biggest agricultural customer with $35 billion a year in ag trade.”
Speaking about the importance of Brazil in global agriculture, Basse said that the growing seasons in the South American country are becoming more important to North American agriculture.
The “Brazilian futures market now leads the U.S.,” he said.
U.S. farmland prices keep rising and there is still a strong appetite for U.S. farm real estate, despite an increased cost of financing and sagging margins. Basse said buyers still see cropland is a more profitable investment than the S&P 500.
The Majors Panel brought together senior leaders from the seed industries’ four largest companies, moderated by Basse, to dig more deeply into Basse’s economic forecast. The panelists included Tom Schuler, VP, Global Strategic Marketing, Seeds & Traits, BASF; Tim Glenn, vice president, Seed Business Unit of Corteva Agriscience; Eric Boeck, Regional Director, North America, Syngenta Seeds: and Jagresh Rana, SVP of Global Business Development & Licensing, Bayer.
The panel answered questions from the audience and discussed their plans and concerns for 2024. They all shared the idea that each company has a local mindset to deliver to their customers.
