What is in this article?:
- Foreign markets opening quickly for U.S. farm goods
- Big market for cotton
- Foreign markets are opening up quickly for U.S. farm goods, as is reflected by the current high prices for U.S. grown crops.
- American farmers are positioned well to meet these demands and get a very good payday for doing so, says Virginia Economist Dennis Gartman.
- "Global economies are getting stronger and growers should do everything the can to avoid selling their crops too quickly into a backwardated market."
Foreign markets are opening up quickly for U.S. farm goods, as is reflected by the current high prices for U.S. grown crops.
American farmers are positioned well to meet these demands and get a very good payday for doing so, says Virginia Economist Dennis Gartman.
Gartman publishes the Suffolk, Va.-based Gartman Letter, a daily commentary on commodity and marketing issues. He has been publishing the daily commentary since 1987, and over the years has conducted numerous presentations and courses on issues relating to the capital markets and derivatives for various brokerage firms, central banks, and U.S. government entities.
“The recession is over, though it may not seem like it in the U.S. or western Europe — we have been slow to recover. In parts of South America and even a few countries in Africa, recovery is progressing faster. In Asia the recovery is unbelievably rapid and it’s going to continue to grow, Gartman says.
“The first time I went to China, 18 years ago, I remember standing on a corner, waiting for a traffic light to change. I thought I was going to be run over by 10,000 bicycles. The last time I visited China, standing at the same street corner, and I thought I was going to be run down by 10,000 Mercedes,” he adds.
The point is, he explains, the Chinese middle class is growing at a remarkable pace. This middle class is already bigger than the total population of the U.S. — and growing. The Chinese middle class wants ‘stuff’ — they want cotton clothes, meat and high protein food and cars and fuel for those cars.
“The one thing you can count on is that Asian per capita income is going from the low end of the world spectrum to the high end at a very rapid pace. The advent of the Internet has had a profound impact on the growth of Asian economies and the economic power of countries like China and India will grow for a long, long time,” Gartman says.
There are now 55 provinces in China with populations higher than 5 million. That’s good for the Chinese economy, but not so good for China’s agricultural industry. Cheap labor in these areas is moving to the city and leveling the playing field for food and fiber products from the U.S. and other countries around the world.