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![Page 1: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/1.jpg)
34th North American and European Union Agricultural Conference
Session 3: Seeking Price Security in Volatile Markets
October 20, 2009
Lic. Enrique Domínguez LuceroConfederación de Porcicultores Mexicanos MEXICO
![Page 2: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/2.jpg)
Seeking Price Security on High Volatile Markets
The correlation between the grain and soy markets,
The price correlation crude oil–corn in the past 12 months shows a correlation coefficient of 0.64%, with a R2 that equals 42%.
Crude oil prices also associated with the US dollar
![Page 3: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/3.jpg)
Seeking Price Security on High Volatile Markets
![Page 4: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/4.jpg)
Seeking Price Security on High Volatile Markets
![Page 5: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/5.jpg)
Seeking Price Security on High Volatile Markets
![Page 6: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/6.jpg)
US Farm Bill and or Energy Act as unilateral policy causes mayor crisis on Mexico:
• Dependence in corn for feed at 50% because competence in market price.
• Taking a 25% of corn for producing subsidized ethanol and soybean for bios fuel brings to broke the livestock industry in Mexico in the past two years
SOURCE OF VOLATILTY
![Page 7: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/7.jpg)
Corn – Ethanol PerspectivesThe needs for renewable fuels
![Page 8: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/8.jpg)
Grain Prices Impact Livestock Production Cycle
• Prices paid for feed doubled from 2006 to 2008, mainly due to higher corn and soy meal prices
• Feed prices has bean declined for 2009, but the the cost already for livestock industry was really bad and
• Limited or reduce demand for animal protein is coming worse and over supply by region bring us a new attention (other H1N1)
![Page 9: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/9.jpg)
PRECIO PROMEDIO GRANO NACIONAL - CERDO EN PIE 06 - 09
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0en
e-06
feb-
06m
ar-0
6ab
r-06
may
-06
jun-
06ju
l-06
ago-
06se
p-06
oct-0
6no
v-06
dic-
06en
e-07
feb-
07m
ar-0
7ab
r-07
may
-07
jun-
07ju
l-07
ago-
07se
p-07
oct-0
7no
v-07
dic-
07en
e-08
feb-
08m
ar-0
8ab
r-08
may
-08
jun-
08ju
l-08
ago-
08se
p-08
oct-0
8no
v-08
dic-
08en
e-09
feb-
09m
ar-0
9ab
r-09
may
-09
jun-
09ju
l-09
ago-
09se
p-09
$/TO
N
0
5
10
15
20
25
$/K
g.
MAIZ
SORGO
SOYA
CERDOEN PIE
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Corn – Ethanol
Corn+Soybean=Animal Protein
Future prices driven by:
• Ethanol produce from corn, soybean? Or
• “Bussines as usual” (WTO ISSUES: Doha Round)
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PRICE SECURITY UMBRELLA(limited)
1.Buying by Contract
2.Hedges (B&S)
3.Finance
4.Compensation
![Page 12: 34th North American and European Union Agricultural Conference Session 3: Seeking Price Security in Volatile Markets October 20, 2009 Lic. Enrique Domínguez.](https://reader035.fdocuments.us/reader035/viewer/2022062518/56649e5e5503460f94b57aa1/html5/thumbnails/12.jpg)
CONCLUSIONS
Volatility on commodities, by Agriculture or Energy Policy assumed by mayor players.
• Alternative source of energy will play a mayor rule on the next future.
• Financial Crisis brings us a new scenario about free market regulation and about…
• Doha as to be finished and go on!
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G R A C I A S
www.porcimex.org
www.cna.org.mx