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Westchester Group CEO Reveals Exciting Times Ahead for Agriculture
PEORIA, Ill.-(Business Wire)-February 19, 2008 - "The real driver in the global agriculture market is the dramatic increase in caloric intake in the world's most populated country: China," said Murray Wise, founder and CEO of the Westchester Group, Inc., at a presentation on global agriculture this morning at the Illinois Feed & Grain Association Meeting.
Wise says we are experiencing only the second demand-driven market in the last 50 years. The Chinese population has more income now than ever before and they are spending that extra money on food. "Over 97 percent of inflation in China over the last year is directly related to increased food costs," says Wise. Some of the key points discussed in his presentation about agricultural demand in China as well as around the world include:
— Chinese soybean imports have more than doubled in the last seven years.
— Today China consumes more than 22 million metric tons/year of vegetable oil, up from only 5 million metric tons in 1990.
— Global corn ending stock is the second lowest in history and stocks continue to decrease.
— World rice supply as a percent of consumption is at the lowest point in history.
— Canadian wheat ending stocks are at their lowest in modern-day history.
— U.S. wheat export commitments are the largest on record.
The growing economies and caloric intake in countries around the world will continue to set new records over the next 10 years. Wise is extremely optimistic about the future of agriculture, "We have a very exciting decade ahead of us."
Something operating farmers need to watch closely over the next 90 days is the "war for acres" we are experiencing. Wise says it is in part driven by high seed and fertilizer prices for corn, but as we've seen dramatic increases in demand for corn around the world, it has decreased stocks of other commodities, particularly wheat and soybeans, thereby increasing demand for all three commodities.
The increased demand for commodities has also effectively played a role in driving up land values throughout the world. As land values rose by 22 percent in the Midwest last year, European countries were seeing similar and even greater increases. English land values were up 22.6 percent and Scottish land values increased by almost 30 percent in 2007.
Wise's research and his depth of industry knowledge have become a resource for many producers, investors and others in the agriculture industry to rely on for current and upcoming market trends. He summarizes his outlook on agriculture as he repeatedly says, "This is an exciting time to be involved in agriculture and I have no doubt we have a very bright future to look forward to."
Westchester Group, Inc. is a leading agricultural asset management firm, providing a complete range of agricultural real estate and management services as well as auction services. The company specializes in portfolio management and acquisition of farmland for institutional and corporate clients, individual farmers, as well as individual investors. Westchester manages a diverse range of crops for their clients, including corn, soybeans, almonds, wine grapes, apples and citrus. For more information on Westchester Group, Inc., visit www.westchester-group.com and www.westchester-auctions.com.
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