Farm Decline Inevitable

A drop in US farm exports and a shrinking of the agricultural economy is inevitable, top economists from the American Farm Bureau Federation claim following news of another year of record-breaking farm exports.
For the past several years, despite a sluggish overall economy, farming and agriculture has remained one of the few bright spots in the United States. Over the past several years, US farm exports have broken record after record as farmers across the country meet enormous overseas demand for US agricultural products.
The resulting growth in the farm sector has led to a massive increase in farm income (rising from $275 billion in 2003 to $425 this year).
This massive growth is likely the agricultural industry’s high water mark, economists at the Farm Bureau argue. The decline is due to a drop in corn demand as well as increased production from major US trade partners. Corn demand and ethanol production, for example, has driven US farm exports. With gas prices declining and consumption dropping, however, ethanol demand has decreased, leading to a drop in corn production in the US.
In addition, major US trading partners like China have stepped up their own agricultural production in order to create a more self-sufficient farm sector. Chinese farmers have significantly increased their production of soybeans, for example, a major element of US-Chinese trade.
Despite a likely decline, the Farm Bureau argues that farmers are in significantly better financial shape than ever before and will be able to weather whatever downturn comes their way.
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Written by: Justin Ellison / Farm Plus Staff Writer