Global Crop Yield Becoming Stagnant
Market expert Dan Basse says global yields are stagnating. The economist from AgResource Company says elevated temperatures occurring more frequently around the world may be the cause.
Basse… “These heat episodes are causing crop yields to stagnate globally. Now it may only be a region that's affected, but if we look at Argentina today, and their soybean crop is 25 million tons, that's a 50 percent yield reduction, we don't see that with these kinds of soils that Argentina possesses very often. So, heat and inflation and duration of weather, by that I'm seeing pattern stagnation, is something we're becoming more worried about in this overall climate change that's being discussed in many circles. I’m trying to be apolitical here. I don't know who causes climate if it's man or God, but I do see in the data that temperature is a worry for the world in terms of crop yields.”
For dairy, Basse says there is downward pressure overseas.
Basse… “Particularly in Europe, but then Oceania, the countries of Australia, New Zealand are coming along and U.S. dairy farmers, although cow numbers aren't rising dramatically, we are seeing better productivity of those animals, whether it's through genetics or other things. But this year, it looks like we'll produce more milk than our consumption will grow in this ever rising interest rate environment and for that reason, it looks like dairy profitability be down somewhere between ten and 15 percent.”
Without the yield, Basse says more acres are needed.