The poll of over 350 executives from leading companies in the North American food, beverage and agribusiness industry was conducted at Rabobank’s recent Markets Forum held in New York City. Rabobank is a leading bank to the global food and agribusiness industry and premier financial institution to the North American food, beverage and agriculture sector.
Notably, 68 percent of attendees named weather extremes/volatility as the single biggest factor affecting North American food and agribusiness in 2013. That concern far outweighed the next two closest factors – consumer demand (13 percent) and policy/regulation (10 percent). Geopolitical events, trade/tariffs/exchange rates, and policy/regulation all received votes in the single digits.
“Given that the North American industry, particularly the U.S., is in the middle of the worst drought in over 50 years,” said Cordingley, “these views are quite understandable and represent a significant issue that is top of mind for most food industry players as we enter 2013.”
Reflecting the concern over continued weather volatility, 59 percent of respondents said that 2012 drought has changed their views about risk management in their business. Executives at the Rabobank Forum cited an increased focus on financial liquidity (25 percent), increased investment in risk management and insurance (21 percent), and greater diversification (13 percent) as their three leading solutions to hedge against continued volatility in weather patterns and commodity markets.
“Corn is a critical input to the North American food industry, and strong and consistent yield growth has underpinned the industry in the U.S. for the past ten years. Despite the enormous gains already made due to precision farming, GMOs, and other technologies, attendees at the Forum were very bullish in terms of their outlook for this trend to continue longer term,” said Cordingley.
Social media played a significant role in the news earlier this year about the use of lean finely textured beef (LFTB) in U.S. beef processing. Rabobank asked its Forum attendees if the rise of social media is causing them to adopt a different approach in their business. More than half of executives (51 percent) said that the growing influence of social media is changing the way they handle brand and reputation management and business communications. Nine percent said it is driving changes in the way they handle vendor/customer/supply chain management. However, 37 percent said they are not making business changes in response to the increasing prominence of social media.
While well-established in the U.S. market, GMOs in agriculture remain controversial in many parts of the world and have not had anywhere near the rates of option outside the U.S. Polled on the factors that would most encourage increased global uptake of GMO technology in agriculture over the next decade, 56% of respondents cited sustained high commodity prices. Others said that greater consumer acceptance (34 percent) will be key to higher adoption, but 7 percent said they believe GMO uptake will slow. Three percent said that improved intellectual property rights in developing markets will be the solution to make GMOs more acceptable among consumers and the food industry.