Golden era of agEconomists agree that today brings prospects and profitability
By: Mikkel Pates, Agweek
FARGO, N.D. — Today’s farmers are in a golden era of profitability and prospects, and technological and economic fundamentals look good, say two economists who addressed the North Dakota Soybean Council’s Northern Soybean Expo, Feb. 19 in Fargo.
“Never in the history of modern agriculture has it been more golden,” says Lowell Catlett, an economist and dean at New Mexico State University. “We have the most differentiated products in the world.”
Catlett says consumers increasingly have enough excess disposable income to demand certain products — things such as organic food, or gluten-free items that have known benefits for small populations.
Gee-whiz technology will play a role, he says. He asked whether anyone 20 years ago had predicted that oil drilling technology would change North Dakota into the economic powerhouse it is today. Specifically, Catlett says a device called a Laser-Induced Breakdown Spectrometer holds promise for agriculture.
The laser LIBS technology was designed to detect the presence of weapons of mass destruction. A New Mexico scientist has worked out a system to determine how much carbon is in soil, as well as nitrogen and phosphorous content, Catlett says. He estimates that a $20,000 LIBS machine could analyze soil at a 4-inch depth and a $100,000 piece of equipment could analyze the soil to a 1-foot depth or so.
He thinks the technology will be important in paying farmers for special protein constituents in soybeans, or their ability to sequester carbon. “Plant agriculture sequesters carbon and we need to get paid for it, and LIBS will prove not only how much soybeans you produce, but how much carbon you sequester too, and it might be a bigger payment,” he says.
Catlett envisions a day when smartphone cameras will be used to take readings on a cow’s eye to diagnose illness. He says technology such as Kindles and smartphones and Global Positioning Systems are changing the way people learn and buy things. It is changing the way crop diagnoses and quality data are collected, aggregated and leveraged in the market.
Used together, the devices can know “real-time weather data on your farm,” Catlett says. “And if I have a near-infrared laser in here, and an app, I know what your nitrogen output is, how much carbon you’re sequestering. Gee, I’ve got data points the likes of which nobody’s ever dreamed about. Don’t think that won’t change aggregation of crops for shipments, for disease control, weather. Powerful: it’ll blow your doors off.”
Also at the meeting, Don Reynolds, an economist who’s company, 21st Century Forecasting, focuses on long-term global, economic, demographic and technology trends, told farmers that the U.S. economy should be growing at 3.2 percent per year, but is only growing at 2 percent, because of political gridlock.
Reynolds says the agricultural prospects are good.
“The United States is entering the ‘golden stage’ of agriculture” because of the increase of 7 billion to 9 billion people in the global economy. The middle class will double in the next 20 years. Chinese consumers have increased from 44 pounds of meat per person to 100 pounds per person. Demands will outstrip ability to produce, despite genetic modifications and other improvements.
“I believe all agricultural commodity prices are headed north, and that $16 per bushel is not the top for soy; $8 is not the top for wheat; $7 is not top for corn, and that over the next five and 10 years, you’ll see higher prices,” Reynolds says.
Reynolds does not see interest rates going up in the next two and a half years, but says the need to solve U.S. financial deficits will eventually lead to inflation.