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DUPONT PIONEER PRESIDENT CALLS 2014 A "TRANSITIONAL" YEAR
Des Moines Register reports:

After years of strong growth, agriculture is poised for a "transitional year" in 2014 as the sector digests lower commodity prices and a drop in planting acreage, Paul Schickler, president of DuPont Pioneer, said in an interview.

During the last half-decade, the agriculture industry benefited from high commodity prices that helped spur a boost in acres planted.

That left farmers flush with cash they could invest to purchase more land or seeds or make other improvements on their farms.

As a result, agribusiness companies have seen their revenue soar and have been able to hire more employees to meet the demand.

But some of the momentum has been lost, due in large part to a sharp drop in commodity prices.

Schickler said he was expecting a return in 2015 to more "normalized" plantings and crop prices that would still be "favorable" and above their recent historical averages, despite being about 40 percent below the record high reached two years ago.

"I look at 2014 in many areas - global, industry and the DuPont Pioneer business - as a transitional year," Schickler said. "In the longer term we're going to be a bit more normalized. So what that means is you're going to be back into an environment that is going to be more demand driven."

The U.S. Department of Agriculture has estimated farm income will plunge almost 30 percent in 2014, to $96 billion - a sharp drop but still the seventh-highest income since 1973 after adjusting for inflation.

Schickler said demand for seed will come from a growing population, as well as a burgeoning middle class around the world that is demanding more and better quality food. Further growth will be stoked by the livestock, dairy and ethanol industries.

Pioneer's parent, DuPont, said in April that its agriculture business in the first quarter was hurt in part by farmers delaying their seed purchases to the second quarter as they waited longer to get a better read on volatile market prices. While Schickler said it's too early to determine if seed sales will be down in 2014, he said Pioneer is "going to have a strong second quarter."


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