Commodity Prices Will Be Strong Long Term: Agco CEO

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Aug. 5 (Bloomberg) -- Agco CEO Martin Richenhagen discusses the prospects for growth in Africa and the outlook for commodity prices with Hans Nichols on "Taking Stock." (Source: Bloomberg)

Growth?

The population is about 1 billion and will double within the next 25 years.

The beauty of africa is that they own 80% of the world's arable land.

When your member the history of america, it all started with farming long before people thought about industry.

I think this is also a way for us to decide how to develop and mechanization is very important.

Is their money there?

How do we get financing for a combine to harvest we?

The snmall farmers need to form co-ops, it is a good way to do it.

We have egg farms, and investment going into africa.

From south america, from the u.s., also from europe.

What are your forecast looking forward for soy prices, corn prices, how will that change your purchasing outlook?

If i knew that i would be somewhere on the beach.

It is difficult to know.

Long-term, demands will be much higher than supply, and therefore i think that commodity prices will be very strong.

Short-term?

I think we might be on this level more or less.

I think there could be some variables, like wheat.

Are using that reflected in your own urges orders coming in -- are you seeing that reflected in your own purchase orders?

Farm income is basically the difference between cost of input and commodity prices.

Farmers make good money because harvest is very good work.

That is why i am not so concerned about the midterm situation.

How long are we from africa being a breadbasket?

To the laws need to change?

What needs to happen?

They need to fix their own problem and get into food security.

That means infrastructure because in some areas of africa that you have an ok harvest, but they cannot get it into neighboring countries.

Some companies, if you want to do business in africa you have to be there.

Be invested in three areas.

We invested in an assembly factory in algeria.

We bought a state owned company, brought in new technology and change the layout.

We invested in the fact or he, things like that.

Second we have a demonstration farm and zambia where we bring education to the continental where we teach farmers in modern mechanized farming.

We have a big part of -- farm in south africa because we need to make sure that the support is very good.

If i figure out corn futures

This text has been automatically generated. It may not be 100% accurate.

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