Feed price volatility is here to stay says industry expert

Volatility is here to “stay as long as you’re growing things in the ground”, Dave Buchanan of Cargill International told the recent NFU conference.

He said that weather means we’re always going to have volatility.

“We have had some good weather in recent years, but that is probably a short-term thing, not a trend. Therefore, commodity volatility is here to stay because weather plays such a big part,” the senior corporate vice-president of Cargill International said.

He said that corn production has grown from 200m tonnes in the 1960s to 980m tonnes, almost an 800m increase in production and that consumption pressures had also increased.

Buchanan asked where had this increase come from – the US and China, and China’s growth is more than the total world production in 1960.

Buchanan also spoke about how megatrends and disrupters trigger volatility.

“The four megatrends are economics, demographics, agricultural supply and climate and demand,” he said.

Focusing on economics he said how business analysts at Cargill International are looking at light emittance from cities at night.

“You can see where it’s lit up, where there’s economic activity; where the population of the world has the money to have economic activity at night. Our analysts look at the data like that and figure out the growth potential of those areas.

“They say there’s a billion people worldwide who will be soon moving into the meat consuming incomes, and another billion who will move into staple consuming, incomes,” he said.

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