Schmidhuber assessed the price prospects for wheat somewhat more reservedly than for maize. He said that here the market was following in the wake of such great surpluses that there would only be scope for slight upward potential. Wheat was so far only being processed to produce bioethanol to a minor extent, so that this sales valve had hardly any effect on markets. He added that the further price developments for oilseed – also linked with the energy market through production of vegetable oil and biodiesel – depended crucially on the soy harvest in South America early next year. Weather markets were to be expected in the coming months, characterised by strong price deflections in both directions. The agricultural expert assumes that high energy prices could smooth the path out of the vicious circle of continuously falling producer prices. At the same time Schmidhuber warned against cheering too soon. The prices of farm diesel and fertilisers that would necessarily rise with the price of crude oil meant there was no guarantee of higher unit gains.

 

DLG President Carl-Albrecht Bartmer pointed out at the opening of the conference that successful business farmers not only observed agricultural commodity prices here and now, but also considered their possible development scenarios. It was a known fact that short-term prices sometimes emit the wrong signals for long-term trends. “Two globally excellent harvests with corresponding effects on global storage stocks combined with the impacts of a dramatic economic and financial crisis do not speak out in favour of any great potential for price increases at present”, conceded the DLG President. However he added that in the event of sudden changes in supply, e.g. due to adverse weather conditions or faster than expected recovery of the economy from the crisis, the slight elasticity in demand could trigger positive price reactions that were just as strong as those recently experienced in the opposite direction. In the medium term the uninterrupted megatrends of population growth, urbanisation and growing affluence in transforming countries, changes in consumption habits and not least the topic of bioenergy would ensure rising demand. At the close of the conference DBV Vice President Dr. Klaus Kliem voiced confidence that a foundation stone marking a relaxation of the pressure on the agricultural commodity markets with rising price trends could be laid in 2010. On the other hand, farmers had to realise that global economic data had direct impacts on international agricultural commodity markets. The times of protected markets were past now, not only for arable farmers.

 

Alexander Korbut’s predictions are not very promising for the future development of grain prices. The Vice President of the Russian Grain Union stated that his home country will boost grain production by a third in the next five years and then regularly thresh between 120 and 125 million t. In addition to satisfying domestic demand, this would allow exports of up to 35 million t. The improvements would be made possible by the use of modern varieties and agricultural machinery, with weather influences taking a back seat. Korbut expects Russia’s export surplus to rise as high as 40 to 45 million t by the year 2030, but storage capacities and transport logistics would first have to be expanded. Developments in recent years had proved that the country was capable of investing in port facilities and silos. Whereas Russian seaports had only been able to handle 12 million t grain in 2006, capacities had now reached 26 million t. By 2015 Russia would also be in a position to export brewer’s barley. The country had its sights above all on China as a future market here. However, the economic and financial crisis raging particularly heavily in Russia could put a stop to these ambitious goals. In boom times the banks had been glad to collaborate with large farms that in Russia not seldom worked 100,000 hectares. However, in times of crisis such large dimensions meant higher risks that were reflected in interest rates of up to 20 %. At such interest levels expedient investments were simply no longer possible, complained Korbut. Russia would be able to boost grain harvests quickly as soon as it made economic sense to do so. However, returns at present were so low that it was simply not worth spending money on higher fertiliser inputs. Yet the harvest potentials were considerable. By 2030 grain harvests could be increased from the present 2.3 t/ha to 3.5 t/ha. Moreover Russia had major land reserves – following the economic upheaval 25 to 30 million hectares of arable land with sufficient rainfall had been taken out of production and were now being gradually reactivated. Korbut predicted that there would be no change in the (for producers) disastrous price situation by the end of the year. However, he expected that the grain intervention starting in Russia and the EU at more or less the same time would at least bring about a stabilising effect.