Agricultural production in 2012 will in part depend on a number of human factors, among which
A. Financial crisis' impact on investor's appetite for ag land
B. Large agricultural countries curbs on foreign buyers of ag land
C. End of the US corn ethanol incentive & tariff; DDGs export potential
D. Chinese appetite for meat
E. Dairy markets developments
F. Continued EU cattle herd contraction
G. US cattle herd decline (as beef consumption keeps declining)
H. Middle East demand for food imports
I. Oil price given demand and Iranian ambitions to disrupt trade and raise prices
J. Interest rates
K. Global GDP
L. Commodity market prices
My understanding is that the chances for something to go wrong (Iran disruption tactics, fertiliser costs, ME volatility, US corn demand for ethanol prod to rise fast under possible new blending targets) are high enough to impact production costs while (protein) demand is likely to remain robust, hence input costs may rise faster than prices, impacting longer term investment decisions (even in the face of low interest rates). Investment in land may be reasonable this year to take account of the above risks, low interest rates but could be frustrated by governements' new legal barriers for foreign investment, as well as rising sustainability demands on projects. A return to ag land investments could be happening in 2013/14 IF the conditions are right, but it is likely that the current EU and US crisis damps FDIs this year. Let's see...
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