US agriculture faces 'colliding' forces

07 Apr, 2010 07:37 AM
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US PORK producers are ending what has possibly been their worst-ever economic period, having experienced huge losses for 30 months because of a combination of factors - most of which have been beyond their control.

In response, the National Pork Board has developed and launched a new strategic plan to advertise and promote pork, conduct industry research and provide consumer and producer information (Feedstuffs, March 29).

In that plan, the board outlined a number of challenges and opportunities for the pork sector that also are just as applicable to all of US agriculture.

American agriculture has entered a new time in which production has not only changed dramatically but will continue to change rapidly, if not abruptly, according to the plan.

"At the very highest level," a number of macro forces are contributing to "a new world order for US agriculture," several of which "are colliding at the same time," according to the plan. These include:

* Most Americans have little connection to agriculture and, therefore, little knowledge of what is required to produce food, especially meat (Figure 1).

* Modern agriculture has changed dramatically in recent decades and no longer resembles "the fond memories" of farms of the 1950s.

* Modern agriculture has become a producer of fuel as well as food and fiber, and this is not likely to change in the future.

* US agriculture is mature, and growth opportunities are very modest as Americans are well fed and need very few additional calories in their diets.

* "Powerful groups" in society distrust the way farmers produce food from both crops and livestock/poultry.

* Public funding for agricultural research is decreasing rapidly and will continue to decrease (Feedstuffs, March 15).

* In turn, proprietary research is increasing as private companies seek competitive advantages and ways to differentiate themselves in the marketplace.

* Public support for traditional agricultural subsidies is likely to decrease or disappear.

* The current economic situation in the U.S. generally and in the pork sector specifically is likely to accelerate consolidation in the production sector (Figure 2). This consolidation in the pork sector has led to tremendous productivity, i.e., since 1980, litters per sow have increased 36 per cent, pigs per litter have increased 28pc and hogs produced per sow have increase 82pc.

As these challenges of change are occurring, so are the challenges of threat, according to the report. These include:

* High corn and other feed ingredient costs and high energy costs;

* US energy policies, especially policies that mandate allocation of corn and other feed ingredients to biofuel producers over livestock and poultry producers;

* Legislation that could decrease efficiencies and increase production costs, including legislation regarding global warming, antibiotic use, manure handling and animal well-being;

* Activities of animal rights/vegetarian activists, including pressure on foodservice and retail companies to force stringent and often unreasonable production standards on producers, ballot initiatives to make animal housing and production practices illegal and pushes to obtain state and national legislation to regulate animal housing and production practices;

* A lack of understanding by consumers - and often customers - of how and why livestock and poultry producers and other farmers do what they do;

* Fragmentation within the various agricultural sectors;

* International markets that are often closed for political or other unjustified reasons, and

* Unpredictable disease outbreaks that can cause loss of animals, loss of demand for meat and poultry or both.

As these challenges of threat are occurring, so are opportunities, according to the report. These include:

* Crop and livestock genetics that are advancing dramatically and improving efficiencies and productivity;

* New products that are convenient, high quality, safe and in demand by consumers from restaurants and retail stores, and

* A global middle class that is projected to grow rapidly and increase demand for U.S. meat and poultry around the world.

Here's the point

CERTAINLY, agriculture has changed dramatically and rapidly in recent years. Most visible is the extent to which farms - be they corn or soybean farms, cattle feedlots or hog or poultry operations - have become fewer in number and larger in size. However, with this consolidation also has come the greatest efficiency and productivity in the world, and no other nation can match what American and Canadian farmers can do.

According to agricultural asset management firm Westchester Group Inc., in 1940, an American farmer produced enough food to feed 19 people; in 1980, that farmer fed 115 people, and today, he or she feeds 150 people.

Most of those people, especially in North America, have not lived on or near a farm for several generations and have no concept of how and why farmers do what they do to produce food. Indeed, mention food to most people, and they conjure up images of restaurants and supermarkets, not of farmers, global positioning systems, radio frequency animal identification or biosecurity measures.

It is due to these images that farmers and livestock/poultry producers face many challenges -- changes that are coming at them as fast as they, themselves, are changing and changes that present both threats and opportunities, as outlined in the pork industry's new strategic plan as well as other industries' long-range objectives.

These challenges are coming from all corners: customers, consumers, legislators, activist groups, nature and the economy. However, as identified in those long-range strategies, producers are responding with production platforms that speak to their socially responsible, sustainable and professional obligations.

As an Iowa corn grower once said, "It starts with a corn seed here on our farm in Iowa, and - 'Wow!' - the world is fed." That 'wow' is well documented at www.FeedstuffsFoodLink.com

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READER COMMENTS

Ted O'Brien
8/04/2010 4:32:55 AM

One day they will discover that the hallmark of their "free market" is the boom/bust cycle. With food production bust means famine.
Dave 66
8/04/2010 6:26:51 AM

For 20 years I have waited for a real adjustment in Agric. returns. In the mean time I have seen economic efficiency and urban culture drift further from food cost reality. Everyone in the food chain (processors, retailers, banks ect) takes a cut except the farmer.
Ffloyd
8/04/2010 7:35:42 AM

Ted, once again you have managed to find a negative in a well researched and presented article. As with Australian, New Zealand and other modern ag producers, the US farmer willl be responsible for providing food to a growing world population. This responsibility should not be under-estimated, as the failure to achieve this will result in catastrophic outcomes. Fortunately the farmer over time has demonstrated the ability to rise to the challenge (as detailed in the article regarding pig production increases in the US). Lets hope that they are supported in the future and encouraged to continue this improvement.

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The US's major export by volume is it's agricultural topsoil due to farming methodology. Same
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I am disgusted with the way the Australian Government allows this huge issue of animal cruelty
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Best you just concentrate on the boxed, especially in WA.