Convergence 2005 to 2010
In my travels and seminars lately I have had the opportunity to listen and observe other speakers and their conversations. What is interesting is that you can feel four forces that will impact the United States’ farm and rural landscape between 2005 and 2010.
- First will be the WTO factor. Whether you feel that the initial stages of the elimination of farm subsidies worldwide may be a dream or not, it will be a force to be reckoned with. These conversations and actions will be taking place in discussion of the next Farm Bill in the U.S. If we have large deficits and depending on our legislators and government leaders at the time, we could see a U. S. and world farm structure with less direct support.
- Second will be the new set of congressmen and government leaders who will have a different, less traditional view of agriculture and rural America. This will definitely impact the agricultural landscape, emphasizing an environmental and green orientation.
- Third will be China, with its vision to become the world’s economic leader by 2050. China was the world’s economic leader for more than 1,000 years. In the early 1800s, China generated 33% of the world’s economy. Contrast this to the U.S., which peaked at 27% in the 1950s. Concerning relations with China, it could be a boom for agriculture or a bust depending upon the enterprises with which you are involved and the needs of the Asian community.
- Fourth will be the emergence of alternative agricultural products in the U.S., such as ethanol, biodiesel and specialized products and services that meet domestic customers’ needs. There appears to be a new group of producers that are positioning themselves to take advantage of this new niche.
Competition with South America
- Our transportation infrastructure in the Midwest is in need of upgrading if we are to compete against South America.
- South America, because of its infrastructure challenges, will start producing more livestock, such as hogs and poultry.
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Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups.
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