MEGATRENDS IN
AGRICULTURE
Dr. David M. Kohl
Professor Emeritus, Agricultural and Applied Economics
Virginia Tech, Blacksburg, VA
(540) 961-2094 (Alicia Morris) | (540) 719-0752 (Angela Meadows) | sullylab@vt.edu
January 19, 2013
Road Warrior of Agriculture: www.cornandsoybeandigest.com
The Wild World of Global Economics
 Swiss cheese economy
 China 7th in 2000, 2nd in 2012 & Brazil is 14th in 2000 and 6th in 2012
 China vs. USA 2047- 2032 - 2019
 USA household income:
 $54,000 in 2000, $47,500 in 2012
 China household income:
 $1,090 in 2000, $6,500 in 2012
 800 million people in China live on less than $2.00 per day
 27% of the world population live on less than $1.00 per day
 20% of the world population live on less than $2.00 per day
 Commodity boom- super cycle
 50% of the world economic growth since 2000 has been BRICS &
KIM-T
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The State of Global Economies:
Percent of World GDP
Developed/Rich Nations
Emerging/Growing Nations
USA
23.6%
China
9.3%
Euro Sector
26.0%
Brazil/Russia /India/S. Africa
8.6%
Japan
Summation of Developed
8.3%
Total BRICS
17.9%
57.9%
South Korea
1.6%
Indonesia
1.1%
Mexico
1.6%
Turkey
1.2%
Total KIM-T
5.5%
Summation of Emerging
23.4%
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Supersized Supercycle
 half of world growth in emerging nations
 BRICS & KIM-T’s = U.S. economy (as a % of
world GDP)
 ethanol & biofuels
 oil, gas, & minerals
 low value of dollar
 low interest rates
 minimal opportunity for investments
 320/260/60 rule
 mother nature/production concentration
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Global Factors & Indicators
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8-5-3 rule of emerging nations
Euro debt 87% GDP
German elections
China
 economic slowdown
 population shifts
 trade
 PMI < 50
 synchronized slowdown
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USA Economy Indicators
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fiscal cliff/slope/downgrade debt
debt level: 105% GDP & 41% foreign financed
PMI: 50 rule
LEI: 0.3% rule
Housing starts: 1.1 million
Unemployment rate: 5.0%
Core inflation: 2.0% & Headline inflation: 4.0%
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Global Economic GDP Growth
Assessment
Fill in current status and check green, yellow or red for each region.
Location
Current
Green
Yellow
Red
USA
Europe
Japan
BRICS Nations*
KIM-T Nations**
*Brazil, Russia, India, China, and
South Africa
** South Korea, Indonesia, Mexico,
and Turkey
© 2010 by Dr. David Kohl & Dr. Ed Seifried
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Cut Above Super Producer
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profit plan: 60-30-10
growth/evolution plan
working capital & liquidity plan: 33% rule
modest/conservative debt: 50% rule
margin= earns & turns
modest living
sixth “C”
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10 Reasons to be Optimistic
About Agriculture
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10.
50/100/70 Rule
Agriculture is 5-dimensional
One size does not fit all
Young people, women, and minorities
Convergence of technology
1 in 6 jobs
BRICS & KIMT
Think globally & act locally
Profitable
The cooperative system support network
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