Glass Half-Full or Half-Empty
Dr. Jim Budzynski wrote a very good article in Crop Life about five reasons why Agriculture is in worse shape than we think. Here are his five reasons:
- Deglobalization – China relied on cheap farm goods from the US to feed the people that moved from rural areas into urban areas to handle the new manufacturing jobs that moved from the US to China. This resulted in a loss of good paying blue collar jobs in the US and rapid pollution in China. This is now starting to unwind.
- Trade Politics – The changes of NAFTA/USMCA, withdrawal from Trans Pacific Partnership, Phase 1, 2, or 3 with China is gaining US the reputation of being an unreliable Ag trade partner. Several counties (Brazil, Canada, Australia, Russia) are more than willing to take our place.
- Dead Pigs Don’t Eat – With an estimate of 60-70% of China swine herd death due to ASF and other countries liquidating herds results in a reduction of demand for soybeans that may exceed 1 billion bushels. It will be hard for China to buy $50 billion of US Ag products when the demand is not there.
- Debt – In the 1960s-1980s global debt was about 100% of global GDP. It is now 250% of global GDP and every time Central Bankers try to wean us off of it the markets crash.
- Climate Change – the debate is not if we cause it, but what are we going to do about it. Can we upgrade genetics, management, crop inputs, etc. to deal with it more effectively.
Although the tone of the article indicates the glass may be half-empty, I view it as being more half-full. American farmers are very resilient and will figure this all out in time.
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.
Human-caused global warming does not exist and it’s the scientific hoax of the century.