There is no single market for agricultural and soft commodities – each commodity has its own unique value chain and combination of production methods, processing/transformations, and consumption patterns; the combinations of which any particular commodity can, and in many cases will, vary significantly by geography.
Prices for these commodities are influenced by weather, input costs (seed, fuel, fertilizer, equipment and labor), changing consumer lifestyles, wealth distribution (both globally and within individual countries), currency values, interest rates, regulations (including impacts of GMO regulations), subsidization, and emerging technologies (such as bio-fuels). Where any particular enterprise falls within the value chain from producer to consumer, the influence and impact of any one or more of these factors will vary.
With the majority of agricultural and soft commodity wholesale prices at or near 5 year lows, and the outlook projecting more of the same, almost all market participants are facing significant challenges in maintaining profitability. From producers to processors, any company that operates in the ags and softs market must remain vigilant and constantly adjust to these rapidly changing market conditions, including uncertainty driven price volatilities, in order to ensure a profitable operation.
Read the document online or download it from the CTRM Center Analytics to Address the Increasingly Complex Global Agricultural Market