Golden age over already for U.S. ag?

U.S. NEWS: "Glory Days Fade for U.S. Farmers: Plunging Crop Prices and Higher Costs Cloud Horizon for '09 Profits and Land Sales," by Scott Kilman, Wall Street Journal, 22 October 2008.

Just got a speaking gig not too far from the Twin Cities in MN for the middle of January, that will be open to the public, for those of you looking to catch either the last time I give the old brief or one of the first times I give the new one (haven't decided, but assume the latter).

Not surprising, given the rise in food prices, as suddenly people recognize it as a strategic issue worth thinking through.

But just at the dawning of this alleged golden decade, the global economic downturn now clouds the vision of higher crop prices, due in part to reduced demand and higher costs of inputs (fertilizer especially).

Interesting chart showing steady and steep rise in net farm income in U.S.—as in from around $20B in 1980 to almost $100B in 2008. Not surprisingly, the debt-to-assets ratio decline from low 20s (%) to under 10% over the same time frame, and the price of farmland increases anywhere from 4-to-5-fold.

So much for the death of ag in America (no, I forget that we're really supposed to boo-hoo the loss of the small farmer).

So, even while we're looking at a small cliff here, I guess I would have to say that the long-term forecast still seems amazingly strong.

But short-term ups and downs are nothing new to farmers—hence the reliance on futures markets to smooth out.

Comments

[Craig Meidinger]

Re: "speaking gig not too far from the Twin Cities in MN for the middle of January"

While I should be more excited about one of your speaking gigs in Jamaica…in January, I would still love to attend. When and Where?

Not To IntuitiveWoodbury, MN