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

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, 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?

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

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)

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.

Cash Rents are Finally Weakening NE IA MN IN

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

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.

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