Crop prices are poised for gains, Monsanto's Mac Marshall
said, flagging that even after a series of bumper world harvests, inventories are
closer to food crisis levels than to the gluts which pressed values to turn-of-the-century
Mr Marshall, lead in strategic planning and communication at
Monsanto, told Agrimoney LIVE that he was "long-term bullish on prices" of
crops such as corn, soybeans and wheat.
"We will start to see some appreciation on the price side."
The forecast – which echoed a forecast on Wednesday to the conference
from BlackRock commodities expert Skye Macpherson - reflected a pace of
stockbuilding which appeared relatively weak, given that the world had enjoyed
four successive strong harvests.
'Closer to crisis
Global inventories of storable commodities, such as grains,
meat and oilseeds have recovered to the equivalent of 73-74 days' supply, well above
the low of 58 days seen in 2008 which drove a spike in food prices.
Even so "we are a lot closer to the lows we saw when we had
the food crisis that the real surplus we had at the turn of the century", when
inventories rose to the equivalent to 93 days' consumption.
Food prices as measured by the United Nations Food and Agriculture
Organisation (FAO) hit their record low in May 2002, on data going back to 1990.
The inventory rebuild is "more a temporary factor than a structural
change. It is not a sea change", Mr Marshall told the conference, in London.
Need for investment
While "we have seen prices come down very significantly",
higher values would prove beneficial for farming, in providing an incentive for
measures to promote output needed to meet long-term demand growth.
"High prices are a good incentive for investment in agtech,"
Mr Marshall said.
Yield growth was paramount given that the area of global farmland
will remain "restricted", and indeed decline to the equivalent of one-third of
an acre person in 2050, from around one-half of an acre now, and 1 acre in
"We have to deliver more efficiency in each acre we farm."