The above 16-page written report (here) is a prelude to the subject of our annual seminar March 21-22 (agenda here):
PRX ANNUAL SEMINAR
American Agriculture after "The Rise of China," the RFS,
and the Collapse of the Price of Crude Oil
--Are We Back to More Supply than Demand?
--And, by the way, Should We Expect a La Nina in 2016?
I truly cannot remember a more uncertain time in world grain markets.
One underlying cause of this is our own difficulty in recognizing the recent "global commodity price super-cycle" as SUPER but NOT A CYCLE.
"The Rise of China" was a remarkable one-time event in human affairs--when a billion people joined the world labor force at once, when this billion people ate lots of pork and cooked it in lots of vegetable oil, and thus drove the imports of 80 mmt per year of soybeans for meal and oil. This new demand alone required almost 70 million acres of top cropland in the Americas (North and South), and was equivalent to almost 10 billion bushels of corn!
But to repeat, "The Rise of China" was a remarkable one-time event in human affairs. It's over. It's not something that's in the least bit CYCLICAL. (I prefer the term "Political Episode," which connotes a beginning, a middle, and an end.)
The RFS as well was triggered by China's increasing demand for crude oil imports, and the near $100/barrel oil prices in 2007. The Energy Act of 2007 itself, as a finished piece of legislation, shows itself to have built-in waivers that make for "annual rules," NOT LONG-TERM MANDATES. In particular, US corn starch ethanol was not given a fixed volume mandate (expected to be 15 billion gallons in 2015), but rather a "residual volume," calculated as Total Renewable Fuel minus Advanced. (As EPA said in the RFS2 Final Rule of 2009, "Even if corn starch-derived ethanol were made so that it met [the 50%] GHG reduction threshold, it would still be excluded from being defined as an Advanced Biofuel." So sugar ethanol imports can replace corn ethanol, as we now know, and corn starch ethanol is subject to an "E10 Blendwall," as defined by EPA.)
What's the future for the price of crude oi (and ethanol!), as fracking goes international and off-shore as well as on-shore? And what about "normal" weather extremes, triggered by the current (natural) El Nino, but which many people take as "Proof of human-caused Global Warming"?
The above written report is intended as a prelude to several others building toward our March 21-22 Seminar--which looks to be our "finest ever!" We have Roy Spencer to cover La Nina 2016, then Rob Johannson (USDA Chief Economist), yours truly, and on the second day JSA (grain markets), Kendell Keith (pure politics), Alan Barkema (pure economics), and Marty Ruikka in the clean-up spot.
Registration now available, more next week on deadline for early registration. 
