Video Viewpoint

Seasoned investment professionals, sector-dedicated analysts, and creative thinkers are at the heart of our business. Get their perspective on today's market climate.

All Videos

Video Transcript

Agribusiness: 2013 Review and Outlook for New Year

U.S. Crop

SAM HALPERT: The U.S. crop finished the year strongly with a positive yield for crop size.  The USDA recently released statistics of yields over 160 bushels per acre, substantially more than what we expected.  They did take down acreage but it still left us with a very large crop in corn.  Soy also had a good crop. Normalization in yield post-drought from the previous year is something that we'd been looking for and we continue to think that crop size has room to grow.

Renewable Fuel Standard

HALPERT: RFS, which is the Renewable Fuel Standard, will likely be reformed in 2014. There has been a ton of pressure from various constituents on the fuel standard.  It's based on assumptions about gasoline demand that are outdated and we think that it will change – it needs to change.  It probably won't change to the most effective mechanism, but the end result would be lower corn demand, which has a potential negative impact on prices next year.


Outlook for South America


HALPERT: Following the U.S. crop outlook, we think that South America should also see a large crop.  In Real, there's a fantastic return for farmers for soybeans because they are still priced at a premium.  With normal weather, we expect that you'll see good yields and a very large South American crop, which should put pressure on soybean prices next spring.

Outlook for Agribusiness Equities

HALPERT: With the U.S. crop and South American crop both normalizing and being rather large, what does that mean for the space in terms of the equities?  We think fertilizers have struggled recently.  They probably found a [price] floor, although potash might still have some room to move lower given the discord in the industry.

We also think that protein has had a strong run. One of the things that's interesting is that while securing protein supply is still an issue, the demand for protein is there. The Chinese bought Smithfield, the largest pork producer, this year.  We don't necessarily see a repeat of something like that, but I think it just highlights the need for an increased supply of protein.

Finally, I think the area that holds the most interest is in seeds, where you can see that – if you look at soybean yields, even in 2012 with the drought, the variability in yields has really diminished and I think that's largely a function of better technology.  Aside from seed technology, equipment technology has also served to impact yields.  Companies like John Deere have had a huge impact on the ability of the farmers to be more precise with their fertilizer application, to understand what's going on in their field.

- - - - - - - - - -


The views and opinions expressed are those of the speaker and are current as of the video's posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions.   Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index.  All performance information is historical and is not a guarantee of future results. For more information about Van Eck Funds, Market Vectors ETFs or fund performance, visit

Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video. Hard Assets investments are subject to risks associated with real estate, precious metals, natural resources and commodities and events related to these industries, foreign investments, illiquidity, credit, interest rate fluctuations, inflation, leverage, and non-diversification. Investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation. Please read the Fund’s prospectus and summary prospectus carefully before investing.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2013 Van Eck Securities Corporation.

Van Eck Securities Corporation, Distributor

335 Madison Avenue, New York, NY 10017