Farm Exports May Hit Record for 2010/11
I just read an article in the most recent issue of BloombergBusinessWeek magazine that had some interesting facts and comments.
First, for the first 8 months of 2010, farm exports are up by 14% to about $ 70 billion and this is before the recent increase in prices.
Second, it is estimated that China will become the second largest importer of our ag goods with $15 billion in 2011 second only to Canada’s $16.8 and slightly ahead of Mexico at $14.6 billion.
I am not sure if their math is correct since they say Ag is only 1% of our $14.3 trillion dollar economy which would be about $143 billion. Our corn sales alone would be about $65 billion, so I am not sure if I agree with the math, but they do indicate if you include farm equipment sales, inputs, food processing, etc., the actual impact may be about 10 times higher or over $1 trillion in sales.
Tom Neher, vice president of AgStar Financial says their bank has issued twice as much farm equipment loans as expected in a recent promotion. “I’ve seen more brand-new combines bought that I’ve seen for a long, long time”, says Neher, who helps manage $2.1 billion in grain-related loans and leases for AgStar.
That is also one of the prime reasons for BHP to try to buy Potash Corp.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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