The Costs of Growing Wheat Around the World: A Look at agri benchmark Typical Farms

Transcription

1 The Costs of Growing Wheat Around the World: A Look at agri benchmark Typical Farms Tanja Möllmann Thünen Institute of Farm Economics Seite November 1 13 th Vorname 2015 Nachname Datum Agritechnica, Hannover Titel der Veranstaltung

2 Outline 1. What is agri benchmark? 2. Global Wheat Production 3. agri benchmark Typical Farms 4. Case Study of: 8 farms [RU, UA, PL, DE, US, CA, AR, AU]

3 Let s grow together 1. Understanding growers needs and constraints enables you to improve products and services. 2. Understanding trends in global crop production allows you to adjust strategies. 3. Understanding agronomical and economic drivers of current production systems is the basis for innovations. 4. Understanding strengths and weaknesses of production systems from a global perspective makes it possible to take profitable decisions.

4 Who we are and what we do 1. agri benchmark is a global, non-profit network of agricultural economists, advisors, producers and specialists in key sectors of the value chains. 2. We use internationally standardized methods to analyze farms, production systems and their profitability. 3. We combine our farm-level knowledge with our expertise in international commodity markets and value chains. 4. Thereby we are able to provide scientifically consistent and soundly based answers on strategic issues to decision makers in agribusiness, policy and farming.

5 Present in all major countries and crops Crop coverage : Corn Soybeans Wheat Sugar beet Rice Rapeseed Oats Rye (Malting) barley Sunflower Sorghum Cotton Peas Beans Palm oil Sugar cane Countries participating in agri benchmark Cash Crop Countries to come online 2015/16 Priorities for new partnerships

6 Major clients and research partners

7 Outline 1. What is agri benchmark? 2. Global Wheat Production 3. agri benchmark Typical Farms 4. Case Study of: 8 farms [RU,UA,PL,DK,US,CA,AR,AU] Slide 7 Nov 10th 2015 Elizabeth Lunik

8 Production by Major Wheat Country/Region to / / / / /2016 Proj. 160,00 140,00 120,00 Million Metric Tons 100,00 80,00 60,00 40,00 20,00 0,00 Page 8 USDA WASDE- June 10, 2015 & PSD Custom Query

9 Exports by Major Export Country/Region to / / / /2015 Proj. 2015/2016 Proj. 40,00 35,00 30,00 Million Metric Tons 25,00 20,00 15,00 10,00 5,00 0,00 Page 9 USDA WASDE- June 10, 2015 & PSD Custom Query

10 Changes in wheat acreage ( = 100) 1. Important wheat producing countries reduce wheat acreage (AR, CN, US, CA, ZA) 2. Slight expansion in wheat in RU, KAZ, BR. 3. Many African countries increased wheat acreage some rather strongly. Source: FAOStat 2014 Page 10

11 Changes in wheat yields ( = 100) 1. Increases in yield more or less everywhere. 2. Strong upward trend in BR, CA, moderately in CN, AU, US 3. A few decreases in FR, UK, NO, SE. Source: FAOStat 2014 Page 11

12 Conclusions re. global developments in wheat (1) Globally wheat acreage is shrinking in particular in Central Europe, US, CA, CN. (2) Growth in acreage just in RU, KZ, AU, BR and some African countries. (3) Yield is still growing however only modest increases ( app. 1% p.a.) in US, RU, KZ. Strong growth: AU, CN, BR, CA and many African countries. (4) Declining yields: UK and F (5) Russia only modest increases in acreage and yields (despite a very low starting point). Source: FAOStat 2014 Page 12

13 Outline 1. What is agri benchmark? 2. Global Wheat Production 3. agri benchmark Typical Farms 4. Case Study of: 8 farms [RU,UA,PL,DK,US,CA,AR,AU]

14 agri benchmark Typical Farms X = countries with agri benchmark typical farms which produced wheat in 2014 X X X X X X X X X X X X X X X Source of base map: International Maize and Wheat Improvement Center (CIMMYT)

15 agri benchmark typical farm approach A typical farm represents the origin of a major share of the national output in a given crop is defined by a certain production system and a combination (if any) of enterprises has certain structural features re. ownership of land as well as labor organization (family vs. hired) is regularly being re-assessed to track changes Data is jointly gathered from partners, regional advisors and growers during Focus Group discussions. Basis: Standard operating procedure (SOP). Page 15

16 Percent of crop land in wheat for agri benchmark representative farms, 2014 DE1300MB* UK800CAM* SE570LAV DE120HI AR700SBA CA2000SAS CA2000RRV UA2000FA DE360OW* DE1100VP UK440SUFF UK310WASH RU20000BS DK605FYN FR230PICB* CA1100NWM CA6000SAS DE250KAB CZ1200JM* SE445SK DE160UE* AU4000WB* PL2100ST* UY292SW UA2600WU JP45HO PL420PO UY360CEN HU1100TC AR330ZN PL730WO RO6500IL BR65PR US1000ND CZ4000JC* FR110VGAV UA7100PO* DK1300SL* FR110ALS AR900WBA ZA1600EFS Page US1215INS 16 EU EAST NO. AMERICA SO. HEMISPHERE 0% 10% 20% 30% 40% 50% 60% 70% 80%

17 UK310WASH DK1300SL* FR230PICB* DE1300MB* DE160UE* DE250KAB DE120HI DK605FYN UK440SUFF DE360OW* DE1100VP PL2100ST* UK800CAM* FR110ALS PL730WO SE445SK UA2000FA SE570LAV FR110VGAV CZ1200JM* UA7100PO* PL420PO HU1100TC RO6500IL JP45HO CZ4000JC* UA2600WU US1215INS CA2000RRV RU20000BS US1000ND AR330ZN AR700SBA CA1100NWM AR900WBA CA2000SAS ZA1600EFS CA6000SAS UY292SW BR65PR AU4000WB* UY360CEN Page 17 Wheat yields, 2014 (t/ha) EU EAST NO. AMERICA SO. HEMISPHERE 0,0 2,0 4,0 6,0 8,0 10,0 12,0

18 ZA1600EFS BR65PR CA6000SAS DE120HI UA7100PO* DE360OW* AU4000WB* SE445SK DE1100VP SE570LAV DE160UE* DE1300MB* PL2100ST* PL730WO DE250KAB DK605FYN CZ1200JM* HU1100TC RO6500IL CA1100NWM US1000ND UK800CAM* CZ4000JC* FR110VGAV FR110ALS FR230PICB* UK310WASH UA2600WU DK1300SL* UK440SUFF CA2000RRV PL420PO CA2000SAS UA2000FA US1215INS RU20000BS UY292SW UY360CEN AR700SBA AR330ZN AR900WBA Page 18 Wheat price, 2014 (USD/t) Summer Wheat Summer Wheat Summer Wheat Summer Wheat Summer Wheat Durum EU EAST NO. AMERICA SO. HEMISPHERE

19 Outline 1. What is agri benchmark? 2. Global Wheat Production 3. agri benchmark Typical Farms 4. Case Study of: 8 farms [RU,UA,PL,DE,US,CA,AR,AU]

20 Wheat yield of selected farms, 2014 (t/ha) High yielding systems vs. low yielding systems

21 Direct Costs, 2014 (EUR/t) Cost advantages in RU and UA AU: high herbicide costs due to increasing resistancy problems

22 Operating Costs, 2014 (EUR/t) AU: high labor cost AR: major share of operations done by contractor RU: high machinery cost

23 Total Costs and revenues, 2014 (EUR/ha) Profitable wheat production in 2014 (except AR farm) Big differences in total cost of production on per ha basis (RU/AU: 300 /ha vs. DE 1600 /ha)

24 Total Costs and revenues, 2014 (EUR/t) Cash cost between 60 and 120 per tonne RU: advantages in land and labor costs

25 Typical farm Argentina, (EUR/ha) Example Argentinian farm (South of Buenos Aires) Profitable wheat production in previous years on EUR basis consider exchange rate effect(!)

26 On farm competitiveness: Typical farm Argentina, 2014 (EUR/ha) On farm competitiveness of different crops: Corn and soybeans are more profitable in 2014

27 Case Study: Summary of Cost of Production Russia and Ukraine farms have a strong cost advantage in: Fertilizer Pesticides Land Labor (after Argentina and Canada) U.S. farm (North Dakota) has high costs in: Fertilizer Crop insurance Land Australia farm has high cost per ton produced: Herbicides resistance problem Machinery Family labor

28 Cost of Production - Continued Germany and Poland farms have high costs on a per ha basis: Direct cost (all inputs) Landcost Global perspective: German typical farm is competitive (per t basis) Argentina farm substituted contractor cost for machinery and labor costs wheat increasing on farm competitiveness Carefully consider exchange rate effects!

29 Knowledge is our Business business Thank you for your interest in agri benchmark. Tanja Möllmann - Member of agri benchmark Cash Crop team - Thünen Institute of Farm Economics Bundesallee 50, Braunschweig Germany phone mobile tanja.moellmann@ti.bund.de website: