Mr. Mick Keogh, Executive Director of The Australian Farm Institute, provided a positive long term outlook for grain. Mick identified that in the long term the following trends will have a positive impact on grain price:
- Global population increase (1 billion extra people by 2025),
- Increase in GDP per head and associated increase in protein intake, requiring more grain fed animals,
- Limited supply of arable land in developed countries and poor infrastructure in countries with potential (especially South America and Africa),
- Reduction in tariffs, particularly in China,
- Against all of this, the strong $A is making our products expensive on the work market.
Mick pointed out that whilst commodity prices have fallen from recent highs, they are stabilizing at levels which suggest a long term uptrend compared with the long term downtrend which has occurred throughout the 1970s, 1980s and 1990s.
It is easy to go broke while waiting for the fundamental forces to have an effect.