What is in this article?:
- Good fiscal news: emerging economies lead the global recovery. “And those economies still look to the United States for products.”
- Demand for agriculture land is fueled by equity capital returns. Agriculture looks very good in relation to other assets and has remained steady over the past few years.
- A weak dollar supports increased agriculture commodity trade.
- With estimated world population at 9 billion by 2050, demand for food will increase significantly.
- Demand for energy crops also will compete for acreage.
U. S. farmers may face some troubling times as they deal with uncertain support for traditional government agriculture programs, a decline in research funding and increased pressure from regulatory agencies.
“But it’s still an exciting time to be involved in agriculture,” said Neil Conklin, president of the Farm Foundation in Oak Brook, Ill.
Conklin was a keynote speaker at the Oklahoma Rural Economic Outlook Conference at Oklahoma State University in Stillwater.
Conklin said despite signs of recovery the recession effects still linger with slow growth, low interest rates that could led to deflation, dismal prospects for real estate, persistent imbalances in global trade and finance, and plenty of downside risk.
Unemployment continues to dog the U.S. economy and improvements may take longer than usual following a recession. Unemployment in the Mountain and Plains states has been less severe than on the coasts. “These areas are less dependent on manufacturing,” Conklin said.
The good news is that emerging economies lead the global recovery. “And those economies still look to the United States for products.” That includes agricultural commodities, which will be in demand as developing nations’ incomes improve and citizens seek more protein in diets.
A weak dollar also supports increased agriculture commodity trade.
He believes the United States can expect tighter fiscal policies, but that the fiscal stimulus bills were effective. “They worked in spite of what people hear,” he said. “Without the stimulus, unemployment would have been 3 percent to 4 percent higher. We can’t prove that definitively, however.
“This doesn’t mean we couldn’t have done a better job (managing the stimulus), but it helped.”
He said the current fiscal path the United States is following “is not sustainable” and will result in a $20 trillion debt by 2015. “Both Republicans and Democrats realize that it’s a problem. They have policy differences on the way to fix the problem, but it’s a positive sign that they both recognize it. A split party control may be helpful, but we have to overcome the political gridlock.”