A Portfolio of Threats to American Agriculture

I. INTRODUCTION American production agriculture is one of the most productive and efficient agricultural industries in the world. So why is it slowly disappearing? In pursuing that question, the author gradually identified a large portfolio of threats to American production agriculture, including economic, political, social, and environmental issues. Each of the threats, considered separately, seemed manageable, but once the author began to take a broader view and tried to consider the interrelationships between and among the threats he began to see the big picture and to realize that solutions are not obvious because the solution to one problem often is the source of another problem. The story behind each of the numerous threats and the interrelationships between them, is laid out elsewhere (Blank, 1998). This article outlines some of the biggest economic issues threatening the long-term survival of American farming and ranching. The declining trends are apparent in Census of Agriculture data reported every five years by the U.S. Department of Agriculture (USDA). For example, in Table 1 are numbers from the nine most recent censuses showing that land and farms are leaving agriculture. Both of these trends have been in place for decades and, until recently, have been explained as natural results of the industrialization of agriculture. Economists noted that as more technology is used in the agricultural production processes, more economies of scale would provide incentives for farms to grow larger (Johnson and Martin, 1993). Indeed, more large farms exist now than in the past (Table 1). Also, technology may generate a substitution toward capital and away from land, which may explain the decline in acreage. However, the trend of declining acreage in agriculture seems contradictory to the trend of increasing total revenues if sales increases are viewed (as many people do) as a proxy for the performance of the agricultural sector. The aut hor's recent analysis of the trends in American agriculture found that there are relatively new changes in U.S. and global agriculture that pose real threats to American producers. In general, the threats to American agriculture are derived from the intersection of global and local scales of decision making. International economic development, personal finance decisions, and political, social, and environmental issues are all part of the portfolio of threats. At the top of the list of threats is the bottom line. II. THE BOTTOM LINE Profits to American agricultural producers are being squeezed. For an increasing number of commodities, price is global, production cost is local. Thus profits vary by location. That means the markets and prices of commodities have become global in scope, whereas production costs remain local. With a single competitive world price ceiling affecting producers of a global commodity, it means that local costs determine the profit per unit for producers dispersed across the globe; therefore, costs determine which producers will survive in the long run. What created global markets and prices? Technological advances. As research provided new and better machines and methods of producing, storing, transporting, and processing commodities, it made it increasingly possible for American and foreign producers to supply commodities to buyers in more distant locations (Antle, 1999). Within the past 25 years science has made it possible for "fresh" produce grown on one continent to be sold to consumers on another continent. In California, for example, consumers eat fruit from Chile during the winter, and many of those consumers do not realize that they are eating imports, rather than the output of California's own fruit industry. Why are American consumers unaware of the increasing amount of imported food in their shopping cart? The price, appearance, and quality of the Chilean fruit and other imports are about same as that for local produce available during our summer. …