|Just so you know we're all still alive, here's a team photo|
taken in the entry of Toepfer International.
We clean up pretty well, no?!
The Toepfer officials underscored the emerging power of Ukraine in global agricultural production. Roughly the size of Texas, Ukraine is the world's second largest exporter of grain and will only gain in importance and impact in the coming years. There is very little corn processing in Ukraine at this point–no HCFS, no ethanol. But that may change as well. This is tempered by the fact that the entire nation of Ukraine has the same GDP as the city of Hamburg. In spite of high winter kill rates, Ukraine is expected to have a large wheat crop (13-15 million tons). And many winterkill areas will likely be replanted into corn.
In the EU north and west, winter crops are well developed, thought there was some winter kill in Germany, France and Poland. Spain continues to be too dry, affecting wheat and barley crops. In the south and east, there was lower rapeseed planting due to fall drought, but grains have been less affected.
The EU intends to shut down all nuclear plants over the next eight years, and at this point, coal is the primary energy source. Biogas is growing like the ethanol industry in the U.S. Germany has 20% renewable energy, which like ethanol in the U.S., has brought wealth to rural areas of the nation. In fact, it has one of the lowest rates of energy consumption per GDP. Toepfer buys and sells carbon emission certificates among its portfolio.
|Phil Thornton of Illinois listens as |
Ludwig Striewe of Toepfer shares his
insights on the impact of Ukraine on
world grain markets.
An interesting insight from Toepfer: Argentina is building up its ethanol industry. "If they are smart, they will create distillers grains and corn gluten feed that are GMO-free," one staffer noted. Clearly, the opportunity lies in the development of second generation biofuels under the current scenario.
While we were there to pick the brains of Toepfer top brass, they were just as interested to hear from the farmers in our group regarding planting intentions and how they aligned with estimates. Our group was relatively consistent in terms of potential corn acres planted. An interesting comment from one farmer in our group: High cash rents are going to continue to drive farmers to plant corn in order to make farming profitable.
"Iowa, Nebraska and Illinois are key regions in the world in terms of corn production," said Stefan Vogel, head of the Toepfer economics department. "You will always be competitive."