72 / SEEDWORLD.COM JANUARY 2019 WHAT IMPACTS GLOBAL grain trade? Any number of issues, according to AgResource Company’s Dan Basse who spoke at the American Seed Trade Association’s CSS 2018 & Seed Expo in December. Population growth, lending rates, net farm income and politics make the short list. At the end of 2018, the U.S. Census Bureau shows that the world’s population is 7.5 billion people. World population is still growing, Basse said, but the rate of growth is slowing. Economists now project the global population to reach 9 billion between 2054 and 2056. “We are stepping down our world growth estimates,” Basse said. “If you ask the U.S. Department of Agriculture (USDA), they say it’s because of world debt. It’s not only fewer people but also how much money people have to spend.” Interest rates are part of that equation. Basse reported that interest rates in the 1980s were 13 percent. “The U.S. farm lending rate is at 5.25 to 6 percent, the highest rate since 2010,” he said. “My concern is that as interest rates rise, net farm income continues to be compressed.” Basse shared that farm inputs, especially that of equipment, have all been all been on the rise since 2008, with the exception of corn seed prices which have come down and been generally flat since 2014. Couple the rising farm input prices and interest rates with stagnant commodity prices and Basse said there’s potential for an operational crisis on the farm. U.S. farmers are having more and more difficulty getting bankers to approve their borrowing requests each year, Basse shared. However, down in South America, unlike farmers in the United States, Basse said farmers in Brazil are loving life. “It does depend on where you sit [in this world], “Basse said. “Currency makes the difference. If you are in Brazil, you are making money because of the [poor] valuation of the Brazilian real. They are cheering for their president to screw up …” Back in the United States, President Donald Trump has pro- posed a 25 percent trade tariff, the same level as during WWII. Trump’s Tariffs Since the 1940s, U.S. tariffs have generally ranged from 5-10 percent, Basse showed. “Moving back to 25 percent on our biggest trading partner (China) is a really big deal,” he said. Those seeing the biggest impact are soybean growers. Look at the soybean price in Argentina and you can see the impact of Trump’s trade tariffs, and the same in Brazil, Basse said. He explained that in the U.S. Gulf, we had a big drop in the U.S. market, while the Brazilian and Argentinean FOB (free on board) premiums went up dramatically. “Those in North and South Dakota have really shouldered the load,” Basse said. “Basis relationships dropped $2 and in some How might global grain trade and stocks impact business? Dan Basse provides some perspective in his 2019 outlook. Julie Deering jdeering@issuesink.com SIDEWAYS SEEDING