What is in this article?:
- WASDE: the numbers versus uncertainty
- Uncertainty about supply
The uncertainties of both supply and demand at this time of the year are almost more important than the numbers USDA can pin to the page.
Uncertainty about supply
First, there is uncertainty about supply. Weather can knock production back in one or more major producing countries in any given year. So U.S. producers cannot be complacent about yields or the adequacy of their production.
The short crop in 2010 hit all our customers hard, and their ongoing willingness to rely on U.S. coarse grain supplies depends on their confidence that U.S. producers are ‘producing for the world.’ Clearly the up-side potential for yield increases is there.
Secondly, there is uncertainty about demand. Sure, populations are growing, and incomes are growing in important developing countries. But will that potential translate into ‘effective demand’ — into efficient food production industries delivering safe and affordable meat, milk and eggs to consumers using U.S. coarse grains and products? And when will that happen? That does not happen automatically.
The U.S. Grains Council works to ensure that emerging markets get their policies right — the rules of the game that allow domestic entrepreneurs to build their businesses and allow trade to work.
And then the Council acts as a catalyst in the emergence of dynamic industries and industry associations that build themselves with good information, efficiency, creativity and consumer services.
The lessons from WASDE are these: In spite of uncertainty, U.S. producers must be efficient and aggressive in producing for world demand. They must be prepared to meet the competition in South America and the Black Sea Region.
Global markets offer a great opportunity for the future profitability of U.S. agriculture. We need to remember that, and need to work actively to bring the potential into reality.