Although the statement was simple and she didn't expound upon it, it is creating somewhat of a stir this morning. And, in my personal opinion, I think she's lost it.
Let me count the ways.
This nation has been the breadbasket for the world and we're beginning to lose that due to global competition from Latin America, Russia, the Ukraine, and our "snake eating its tail" ethanol policy. The last time I reviewed how much the Ag commoditiy sector is strengthening our U.S. balance sheet, it wasn't too impressive:
Though demand continues to increase, the fact is, we are facing increasing global competition in the area of agriculture. Omaha federal banking economist, Jason Henderson, recently described increasing competition from the BRIC nations as they improve their productivity.General numbers:
- The U.S. 2009 nominal GDP was $14.3 trillion (breakdown: agriculture: 1.2%; industry: 21.9%; services: 76.9%)
- U.S. Imports were $1.95 trillion in 2009
- U.S. Exports were $1.57 trillion in 2009
- 2009 trade deficit was $380 billion
- 2009 Ag exports were $98.6 billion
- 2009 Ag imports were $71.7 billion
- 2009 Trade surplus in Agriculture was $26.9 billion
- Trade surpluses in the Ag sector for previous years: $5.6 in 2006; $18.1 in 2007; $34.8 in 2008)
- The total agricultural output, including forestry, fishing and hunting, was $136.4 billion in 2009, according to the Bureau of Economic Analysis.
- 0.7% of U.S. employment comes from farming, forestry, and fishing in the U.S.
- Agriculture's share of the economy shrank from 8.6 percent in 1948 to about 1 percent in the past decade.
- USDA expectations are that in 2011 our top three agricultural trading partners will be: Canada $16.8 billion; China $15 billion; and, Mexico $14.6 billion.
Breakdown of Ten U.S. Agricultural Export Categories in Dollar Amounts from 2009:
- Soybeans $16.9 (all in billions)
- Meat and poultry $12.1
- Corn $9.7
- Other foods $8.1
- Fruits and frozen juices $6.9
- Animal feed $6.3
- Wheat $5.5
- Vegetables $4.9
- Nuts $4.1
- Rice $2.2
Energy Sector U.S. Imports/Exports 2009:
- Petroleum imports in 2009 were $254 billion
- Petroleum exports in 2009 were $49 billion
- The 2009 deficit in petroleum products was $204.5 billion
- In 2009, the U.S. agricultural surplus erased 13 percent of our petroleum deficit in trade.
- The 2009 U.S. trade surplus in agricultural goods was equivalent to 7 percent of the year's total trade deficit.
- Agriculture represented 1.2% of U.S. 2009 nominal GDP and employed .7% of workers (directly).
We provide 40% of global corn exports, but now, 42% of our corn production is being turned into ethanol. Other corn exporters are gaining export market share: Brazil, Argentina, So. Africa, Russia and the Ukraine.
We have lost much of our global soy export market share to Latin America, and we are gradually losing global wheat market share, since we have moved to planting the more lucrative crops of corn and soy over the past decade, while wheat productivity has increased around the world.
We already have some of the world's largest agribusiness companies such as Monsanto, Cargill, ADM, John Deere, and Caterpillar.
The agricultural industry employs less than 2% of this nation's workforce, but food and beverage industries are about 12% of this nation's manufacturing. If Meredith expects much more expensive oil in our future, she might picture half of us with hoes in our hands by the end of this next decade. That would be a structural change that would take a while, wouldn't it?
Perhaps Meredith was also referring to energy commodities such as coal, natural gas, and oil. There are insatiable appetites abroad for those commodities from nations with stronger balance sheets than our own, though some might consider ownership of those resources a national security issue. See America's Natural Resources for Sale.
As our dollar devalues, our imported oil prices increase. In agricultural commodities, this helps us export, but it increases our industrial agriculture input costs proportionately.
Oil was one-fourth of our trade deficit in the year 2000 and now it is one-half. The best thing we could do for our balance sheet would be to reduce our dependence upon foreign oil. This might include infrastructure upgrades in rail, bike and pedestrian paths, energy efficiency in our buildings, smart urban planning, and green energy growth in electrical production. We need mass transit for commuting to work and we need to phase out of our big-car culture.
We need to wean ourselves off our most energy intensive farming methods. Although the Ag industry in this nation is very efficient, having achieved huge productivity gains these past several decades, these gains challenge the moral compass of many, and are generally energy intensive. And, yes, that would be a major structural change which would employ more people back to the land. But, I doubt that was what Meredith had in mind.