Two leading economists, Bruce Scherr and Dave Kohl, see a brighter future in 2011 and beyond for U.S. agriculture, especially for crops that are exported.
“The economy is in decent shape,” Scherr notes. “It’s going to be a long haul to get us back to the kind of prosperity we would all love and want, but we will be structurally better off.”
He predicted the U.S. economy will continue to grow at about 3 percent over the next few years now that the country’s financial structure has been corrected.
“The United States became the poster child of industrial failure,” Scherr says. “We led the entire world into the deep, deep economic debacle that we’re just now climbing out of.”
The recovery is due to a rebalancing of the world economy, Kohl adds. “We were living off a false economy for the past decade where we used our homes as an ATM.”
A bright spot the experts see for U.S. agricultural exports is the improving lifestyles in emerging countries. China and India brought “as many as 1.5 billion persons from subsistence level to culturally defined middle income” in the past decade, Kohl notes, adding that millions of families now enjoy the luxury of home refrigerators.
“No longer are they buying just enough for a meal at a time,” Scherr says. “They’re buying for meals at a time.” As proof, he pointed to China’s becoming the world’s most rapidly expanding dairy consumer.
China and India — along with Russia and Brazil — were 18 percent of the world’s economy in 2010 but 47 percent of the world’s growth, Kohl says. “As long as they’re about 40-plus percent of the world economic growth, commodity prices are going to do very, very well,” he adds.
While the future looks brighter, neither expert expects the United States’ jobless rate to recover rapidly.
“It’s a lagging feature,” Scherr says. “Job creation will continue to expand, though slowly, I believe unemployment by 2012 will migrate to somewhere around 8.5 percent.”
Kohl looks for U.S. productivity to help drive recovery. “The United States will produce more in one hour than 25 percent of the countries of the world produce in one year,” he says. “We produce more in 28 days than China does in a whole year.”
The advantage to domestic agricultural grower/shippers is the populations in the less productive countries must eat and their tastes have become more refined. “We will move forward in a world of extraordinary opportunity, as billions around the world have rising incomes and insatiable demands,” Scherr notes.