From Corn to Cannabis: Gro’s Top 5 Insights of 2018

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How Slumping Oil Prices Batter Agricultural Markets

Oil markets gyrated late in the year amid concerns about economic growth and excess supply. But slumping oil prices bruised more than just the energy industry—they also caused collateral damage to corn, soybean, and other agricultural commodities futures. That’s because of how commodity speculators increasingly are managing risk in their portfolios, by selling a wide range of commodities, even when just one, in this case oil, becomes volatile. The upshot: Commercial end-users, including crop processors and food producers, have taken advantage of price dips in agricultural commodities to hedge future supplies.

Read the complete Insight here.

China’s Road Map to Food Security

Nearly 1 out of 5 people in the world lives in China. That’s a lot of mouths to feed, and officials in Beijing and elsewhere have long fretted about what that will mean for global food supplies. Drawing on vast amounts of public information, Gro conducted a detailed analysis of China’s food needs, now and in the future, and came up with some surprising conclusions. One is that China may already be largely self-sufficient in basic foodstuffs to feed its people. But to raise pigs and other livestock for the meat increasingly being demanded by its growing middle-class, China needs to import vast amounts of soybeans. Our Insight article looks at how China is addressing this protein-import dependency by using its economic muscle to enlarge its global agricultural footprint.

Read the complete Insight here.

High Times Ahead for Cannabis

It’s not hard to imagine cannabis-futures contracts someday trading alongside corn and cattle futures. Sales of marijuana, both legal and on black markets, total more than $50 billion, exceeding the market size for either milk or hogs. Currently, more Americans live in states where cannabis is legal in some form than those who do not. And, with a bright industry outlook and potential for increased federal tax revenue, it seems likely that the cultivation and use of cannabis will become legal before long. Rapid expansion of legitimate cannabis cultivation could mean market trading volumes rivaling those of some of the most heavily traded commodities.

Read the complete Insight here.

Developing Economies Challenge Europe’s Chocolate Reign

Chocolate is one of the few light-manufacturing industries in which Europe still holds a dominant place. Not only does the continent account for 70 percent of global chocolate exports, Europeans also are among the world’s biggest consumers of the luxury treat. That has begun to shift. Rising disposable incomes in East Asia have spurred greater consumption of chocolate in that region, which in turn has prompted increased investment in processing and manufacturing, including in China and Indonesia, the largest producer of cocoa beans outside of Africa. Investment also has flowed into chocolate processing in some countries in Africa, where about two-thirds of the world’s cocoa is grown. Europe won’t be dethroned as king of chocolate anytime soon. But the product’s economic potential is attracting more players around the world.

Read the complete Insight here.

Argentine Beef Industry Primed for Revival

Argentine beef is synonymous with high quality, appreciated both at home and abroad. But the country’s beef industry suffered for years from steep export tariffs and disease outbreaks. Economic and agricultural reforms launched in 2015 have helped spark a recovery, and both herd sizes and exports are growing again. As incomes, and meat consumption, rise in many countries around the world, Argentina is doing well to increase investments in its beef industry.

Read the complete Insight here.

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