The lead presentation at the Fields on Wheels Conference held in Winnipeg, MB on Dec 2, 2015. The presentation considered the location of expected population growth and its implications for the Canadian grain industry in the future 2035, with a glimpse at 2100 (used UNPD and other sources).

1. World Grain
Marketing: Why the
location of population
& economic growth is
crucial for long-term
planning
Chris Ferris
Senior Grains Analyst, Canada
www.twitter.com/chrisferris3
December 2, 2015
20th Annual
Fields on Wheels Conference

2. About Informa Economics
 Informa Economics, Inc. (formerly known as Sparks Companies, Inc.) is a
world leader in broad-based domestic and international agricultural and
commodity/product market research, analysis, evaluation and
consulting.
 We analyze most major value chains in the crops, livestock sectors, along
with transportation.
 The company was founded in 1977. It was acquired by Informa plc
("Informa") in 2003.
 Informa Economics, Inc. serves hundreds of firms, institutions and trade
organizations worldwide. http://www.informaecon.com/aboutus.asp

3. Summary
3
1) Demand Pull
A. Population Growth
B. Economic Growth
2) Supply Implications
3) Some Logistics Implications
4) Implications

4. DEMAND PULL
4

5. Demand Pull
Factors:
 Population
 Urbanization
 GDP per person
 Income Distribution
 Consumption per person
 Many more
5

6. (1) World Population
Growth
6

7. 9 Billion People by 2035 – 2040!?
Slide 7
2015, 7.349
2035, 8.839
2040, 9.157
2100, 11.213
0.000
2.000
4.000
6.000
8.000
10.000
12.000
WorldPopulation(Billions)
WORLD World Median Forecast 9 Billion
Source: UNPD http://esa.un.org/unpd
This projection is too
vague for those of you
making large, long-
lived infrastructure
investments;
UNLESS, ….

8. … We Understand the Location of This
Growth!
… So where will the population growth be?

9. (2) World Population
Projection to 2035;
by Region and by Key
Countries
9

10. World Population Projection (Millions) to 2035;
Asia Dominates, Africa Growing Quickly (1)
10
Source: UNPD http://esa.un.org/unpd
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2015 2020 2025 2030 2035
Population(Millions) World Population Projection (Millions)
ASIA AFRICA LATIN AMERICA AND THE CARIBBEAN EUROPE NORTHERN AMERICA OCEANIA

11. World Population Projection (Millions) to 2035;
Asia Dominates, Africa Growing Quickly (2)
11
Source: UNPD http://esa.un.org/unpd
4,393
4,598
4,775
4,923
5,045
1,186
1,340
1,504
1,679
1,866
0
1,000
2,000
3,000
4,000
5,000
6,000
2015 2020 2025 2030 2035
Population(Millions)
ASIA AFRICA LATIN AMERICA AND THE CARIBBEAN EUROPE NORTHERN AMERICA OCEANIA

12. World Population Projection (Millions) to 2035;
Top 10 countries: India, China still dominate
12
Source: UNPD http://esa.un.org/unpd
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1 800 000
2015 2035
Population(thousands)
India China United States of America
Indonesia Nigeria Pakistan
Brazil Bangladesh Mexico
Ethiopia

13. (3) World Population
Projection to 2100
13

14. World Population Projection (Millions) to
2100, Africa is the Projected Growth Story (1)
14
Source: UNPD http://esa.un.org/unpd
0
2,000
4,000
6,000
8,000
10,000
12,000
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100
Population(Millions) World Population Projection (Millions)
ASIA AFRICA LATIN AMERICA AND THE CARIBBEAN EUROPE NORTHERN AMERICA OCEANIA

15. World Population Projection (Millions) to
2100, Africa is the Projected Growth Story (2)
15
0
1,000
2,000
3,000
4,000
5,000
6,000
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100
Population(Millions)
ASIA AFRICA LATIN AMERICA AND THE CARIBBEAN EUROPE NORTHERN AMERICA OCEANIA
Source: UNPD http://esa.un.org/unpd

16. World Population Projection (Millions) to 2100;
Top 10 Countries, highlighting fast growth
16
Source: UNPD http://esa.un.org/unpd
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1 800 000
2015 2035 2100
Population(thousands)
India China Nigeria
United States of America Democratic Republic of the Congo Pakistan
Indonesia United Republic of Tanzania Ethiopia
Niger
African countries
forecast to have
strong population
growth and population
count to 2100:
2100 Rank:
(3) Nigeria
(5) D.R. of the Congo
(8) Tanzania
(10) Niger

17. World Population Projection (Millions) to 2100;
Top 3 Countries: China, India & Nigeria
17
Source: UNPD http://esa.un.org/unpd
India
1,659,786
China
1,004,392
Nigeria
752,247
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100
Population(thousands)
India China Nigeria
United States of America Democratic Republic of the Congo Pakistan
Indonesia United Republic of Tanzania Ethiopia
Niger

18. (4) World Population:
Forecast Changes to
Fertility Rates
18

19. Fertility Rate: 2015
Slide 19
Source: UNPD
Africa
has the
highest
fertility
rates

20. Fertility Rate: forecast for 2035
Slide 20
Source: UNPD
Africa
has the
highest
fertility
rates,
but
expect
it to
slow

21. Fertility Rate: forecast for 2050
Slide 21
Source: UNPD
Africa
has the
highest
fertility
rates,
but
expect
it to
slow
more

22. Fertility Rate: forecast for 2100
Slide 22
Source: UNPD
Africa
has the
highest
fertility
rates,
but
expect
it to
slow to
around
the
replace
ment
rate

23. (5) Urbanization
23

24. Urbanization & Large Cities: 1970s
Slide 24
Source: UNPD

25. Urbanization & Large Cities: 1990
Slide 25
Source: UNPD

26. Urbanization & Large Cities: 2014
Slide 26
Source: UNPD

27. Urbanization & Large Cities: 2030 F
Slide 27
Source: UNPD

28. Share Urban: 2014 by Income Categories
Slide 28
Source: UNPD
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Share Urban

29. Urbanization Rates vs 54% World Average
Slide 29
Source: UNPD

30. (6) Some Challenges for
GDP/Person Growth
30

31. Key Challenges
 Need to grow GDP/person:
◊ This requires the building of infrastructure
◊ the improvement of education (although literacy has improved markedly in many
countries
◊ Faster and easier business formation, with strong respect for private property
(ILD)
◊ Improved freedoms of various types (Heritage Foundation):
 In some cases, the world has made fairly good progress.
 In others, there is substantial room for improvement
31
Source: qqq

32. 2015 Economic Freedom Index - Overall
32
Source: Heritage Foundation, in Partnership with the Wall Street Journal
Note:
The following
indexes were
created by the
Heritage
Foundation
and represent
their methods
& judgements.
They are
being used as
illustrations
only.

33. 2015 Economic Freedom Index
- Business Freedom
33
Source: Heritage Foundation, in Partnership with the Wall Street Journal

34. 2015 Economic Freedom Index
- Trade Freedom
34
Source: Heritage Foundation, in Partnership with the Wall Street Journal

35. 2015 Economic Freedom Index
- Fiscal Freedom
35
Source: Heritage Foundation, in Partnership with the Wall Street Journal

36. 2015 Economic Freedom Index
- Government Spending
36
Source: Heritage Foundation, in Partnership with the Wall Street Journal

37. 2015 Economic Freedom Index
- Monetary Freedom
37
Source: Heritage Foundation, in Partnership with the Wall Street Journal

38. 2015 Economic Freedom Index
- Investment Freedom
38
Source: Heritage Foundation, in Partnership with the Wall Street Journal
There is
room for
improve
ment

39. 2015 Economic Freedom Index
- Financial Freedom
39
Source: Heritage Foundation, in Partnership with the Wall Street Journal
There is
room for
improve
ment

40. 2015 Economic Freedom Index
- Property Rights
40
Source: Heritage Foundation, in Partnership with the Wall Street Journal
According to
this Index,
there is
substantial
room for
improvement

41. 2015 Economic Freedom Index
- Freedom From Corruption
41
Source: Heritage Foundation, in Partnership with the Wall Street Journal
According to
this Index,
there is
substantial
room for
improvement

42. 2015 Economic Freedom Index
- Labor Freedom
42
Source: Heritage Foundation, in Partnership with the Wall Street Journal
According to
this Index,
there is
room for
improvement

43. Why is Economic Freedom Important?
◊ With rapid population growth, rapid economic growth is needed to prevent food
insecurity, food riots and things like the Arab Spring. Crises like this can
degenerate into failed states, terrorism, civil war and/or mass starvation.
◊ Corruption, slow processes, unclear property rights – all these things slow down
economic growth.
 While not everyone would agree with how the Indexes above are defined,
they illustrate several problems.
◊ A lack of economic freedom, freedom to rapidly form businesses, a lack of
recognition of property rights, and unclear operating environments make it harder
for entrepreneurs to build their small businesses up from small “grey economy” /1
business into bigger ones than generate jobs for others. Some of the businesses
can then grow into medium and large businesses.
43
1/ “Grey Economy” - Hernando de Soto, of the Institute of Liberty &
Democracy, Peru

44. (7) Example: Nigeria
Wheat + Rice
44

45. Nigeria, Wheat Consumption:
Actual & Forecast
Slide 45
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2005
2010
2015
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Wheat: Food Use

46. The Most Recent
Commodities Super-cycle:
Oil, Grains, Oilseeds
46

47. Monthly World Crude Surplus/Deficit vs
OPEC Price
47

48. Growth in Canadian Crude Oil Production
48
Canada’s monthly
Crude Oil Total Net
Withdrawals
(roughly equivalent
to production) rose
sharply from 2010
onwards.
With strong oil
prices, & the
application of
frakking, we saw
rising supplies.

49. Growth in Canadian Crude Oil Exports
49
Much of the growth
was exported to the
USA, with a portion
of it being delivered
by rail, given the
lack of pipeline
capacity to carry the
new supplies.

50. Fuel Oils and Crude Petroleum by Rail
50Source: Statistics Canada
On a Crop
Year basis,
you can see
crude by rail
dipped
slightly in
2014-15,
after surging
300% from
2010-11.
Expect 2015-
16 to flat to
lower.
Expanded Oil-by-Rail

51. 0
25
50
75
100
125
150
175
200
225
250
275
300
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
EndingStocks
Production&Use
World Corn Production, Use and Ending Stocks
Million Tonnes
Production
Use
Ending Stocks
Ending Stocks Ex. China

52. 0
2
4
6
8
10
12
14
16
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
BillionGallons
US Ethanol Production and RFS
Ethanol Production
Implied Domestic Disappearance
Renewable Fuel Standard

53. 0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
75/76
77/78
79/80
81/82
83/84
85/86
87/88
89/90
91/92
93/94
95/96
97/98
99/00
01/02
03/04
05/06
07/08
09/10
11/12
13/14
15/16
Dollars/Bushel
MillionBushels
US Corn Ending Stocks and Prices
Ending Stocks
Farm Price

54. World Soybean Supply and Demand
(Million Tonnes)
54
0
2
4
6
8
10
12
14
16
18
20
22
24
26
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
80/81
81/82
82/83
83/84
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
USEndingStocks
WorldProductionandUse
World Production
World Use
US Ending Stocks

55. 4
5
6
7
8
9
10
11
12
13
14
15
16
0
50
100
150
200
250
300
350
400
450
500
550
600
80/81
81/82
82/83
83/84
84/85
85/86
86/87
87/88
88/89
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
Dollars/Bushel
MillionBushels
US Soybean Ending Stocks and Prices
Farm Price
Ending Stocks

56. 0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
MillionTonnes
Sep/Aug
Soybean Exports by Major Exporters
Ukraine
Canada
Paraguay
Argentina
Brazil
US

57. 0
5
10
15
20
25
30
35
40
45
50
55
60
65
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
MIllionTonnes
Vegetable Oil Import Demand
FSU
W. Hemis
Europe
Africa
China
India
Other Asia

59. North American Grain
Logistics
59

60. Agricultural Supply Chain
60

61. Comparing the Modes:
One 15-Barge Tow Equals 216 Rail Cars or 1,050 Trucks
61
216 Rail Cars + 6 Locomotives
1,050 Large Semi Tractor-TrailersOne 15-Barge Tow

62. 62
Comparing the Modes:
Ton-miles Traveled per Gallon of Fuel
576
413
155
Super-B
trucks
improve the
relative
economics
somewhat
more that
this.

63. Multi-Client Study
North American Commodity Constraints
63
North America’s Commodity Constraints
The Modal Requirements Transporting North
America’s Commodities in a Highly Utilized
Modal Environment
A Three Segment
Multi-Client Study Effort:
Grains,
Oilseeds &
Products
Fertilizer
(N, P & K)
Coal
Key Issues to be Addressed in the Study
Presented by a Premier
Industry Intelligence Team :
Through a combination of higher commodity flow patterns, insufficient equipment, inadequate infrastructure
investment, weather and congestion, the North American transport logistics enterprise has been strained. Yet,
the outlook for commodities is very strong in context of an expanding global population and higher
consumption levels. However, those higher demand volumes will further strain an already congested transport
system. An understanding of the scope, scale and requirements of moving expected higher volumes of North
American commodities and products is needed. A premier team has launched this important study. Be sure to
sign up today by visiting www.informaecon.com.
Prepared and Organized by:
informa economics, inc. www.informaecon.com Enroll Today

64.  Freight Movements at all
Time Highs
 Freight a Leading Indicator
on the Economy
 Multi-Modal Economy
Freight Movements Running Strong
64

65.  Coal Consumption
Dominates Flow Patterns
 Grain Prominent in Canada
 Fertilizer Relatively Small
but Important in Reach
Commodity Composition Skewed to
Agriculture and Energy
65
Canada
53%
Canada
4%
Canada
43%
U.S.
32%
U.S.
2%
U.S.
66%
Total
33%
Total
2%
Total
65%
North American Commodity Consumption
Share by Country and Total
Grains and Oilseeds Fertilizer Coal

66.  Abundant Supplies of
Commodities to be Moved
 Crop Production as an
Example
 Challenges on Horizon
 Demand still Strength
Abundant Supplies
66
0
100
200
300
400
500
600
700
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
CropProduction(millionmetrictons)
Crop Year
U.S. and Canada Crop Production
Canada
United States

68. Questions and Answers, and
Discussion
68

69. World Grain
Marketing: Long term
planning implications
of the location of
population &
economic growth
Chris Ferris
Senior Grains Analyst, Canada
www.twitter.com/chrisferris3
December 2, 2015
20th Annual
Fields on Wheels Conference