Our President, Duncan Allison, again surveys the ag scene and provides timely comments.
FARMING NOTES – MARCH 2015
We have just been celebrating National Ag Day on March 18th. We are lucky being Americans as on average in 2013 we spent 5.6 percent of our disposable personal incomes on food at home and 4.3 percent on food away from home. This is amongst the lowest in the world.
U.S. Secretary Vilsack said “America’s farmers, ranchers and growers are some of our nation’s greatest assets. Not only do we rely on agriculture for our food, feed, fiber, and fuel, our agricultural producers preserve our environment, and help drive our national economy. As I travel the country, I often ask folks when they last took a moment to thank or appreciate a farmer. The truth is that we owe a debt of gratitude to the hard working men and women who provide us – and much of the world – with a safe, reliable, affordable, and abundant food supply.” We have recognized this since Daniel Webster (1782-1852) said “Let us not forget that the cultivation of the earth is the most important labor of man. Unstable is the future of the country which has lost its taste for agriculture. If there is one lesson in history which is unmistakable it is that national strength lies very near the soil.”
Agriculture careers Good news -– USA Today article on 02/02/2015 claimed that for those considering a career in Agriculture and Natural Resources, starting salaries averaged $51,200, comparable to Business $51,508, Math and Sciences $56,171, Computer Science $61,287 and Engineering $62,998. Average lifetime earnings $2.6 million for agriculture, business and Math/Science. Agriculture and Natural Resources cover such a wide range of occupations these days and definitely involve science and high tech with computers playing an ever larger role. I have seen 200 and as many 300 different occupations used to describe agriculture and agribusiness. We need the best and the brightest at all levels in our large industry to ensure we have the most productive and sustainable agriculture in the world to feed the expected 9.6 billion.
Farmers still reading ag trade magazines – Social media may be making the headlines but Readex Research reports that their recent research is showing that 85% of farmers age 44 and under are reading ag trade magazines. In fact ag magazines are the media used most often on a weekly basis by these young professionals (ABM October 2014).
Possible good news for egg producers – The Dietary Guidelines Advisory Committee is filing its spring report with USDA and Dept. of Health and Human Services and so egg producers could be allowed to sell eggs and egg products without a caution against eating foods that contain cholesterol. Peak egg sales were 421 in 1945 but fell to 250 in 2012 but have been increasing in 2013 and 2014. Cheaper protein than meat and seafood and eggs are a popular breakfast food so that sales may increase significantly with publicity from the proposed new Guidelines.
Not such good news but still strong financial position – Net farm income is forecast to be $73.6 billion in 2015, down nearly 32% from 2014’s forecast of $108 billion. This is the lowest since 2009 and a drop of nearly 43% from the record high of $129 billion in 2013. Lower crop and livestock receipts are the main drivers of the change….production expenses are projected up less than 1%….Total production expenses are forecast to increase by $2.5 billion in 2015, extending the upward movement in expenses for a sixth straight year. The rate of growth in farm assets is forecast to slow in 2015 compared to recent years ….Despite the anticipated higher debt, the historically low levels of debt relative to assets and equity reaffirms the sector’s relatively strong financial position despite 2 years of declining farm income.” ERS,
USDA Sustainability and Climate Change – Major international companies are committed to sourcing their food ingredients from sustainable sources and reducing GHG. Coca Cola – sustainably source key agricultural ingredients by 2020. General Mills – sustainably source 100% of 10 priority ingredients by 2020. Unilever – Source 100% of our agricultural raw materials sustainably by 2020. These three companies also undertake to reduce their Greenhouse Gas emissions over the same period. Walmart – one of the largest global food retailers – Reduce and optimize the resources required to producer that food and driving more transparency into its supply chain. Reduce fertilizer use on 14 million acres of U.S. farmland by 2020.
British report on food self-sufficiency – Britain is likely to source only 53% of the nation’s food needs from home farms in the next 25 years “with potential for serious implications for the British economy, food security and employment.” A recent market research report shows that 85% of the population wants to see supermarkets selling more food from British farms – an increase from 79% in 2014. The report made it clear that the decline in self-sufficiency was due to shifting and conflicting direction in government farm policy, declining investment in publicly funded research and development, poorly crafted legislation and weak bargaining power within the food chain. “Education, health and food and farming should be intrinsically linked.” Clearly the situation is very different in the U.S. with the strong support of farming by our successive governments. However it provides a clear warning sign of what happens when the nation’s food security is put at risk to volatile world markets and governments do not wholeheartedly support research, government policies, education and extension in agriculture. We also know that consumers are looking for more local food produced more sustainably. Our farmers must be able to meet this need.
Coca Cola enters milk market – Fluid milk sales have been declining steadily representing 68% of total milk sales in 1975 down to 29% by 2013. Many bottlers have already got rid of the rBST label in the hope of getting back customers. It is reported there is not sufficient organic milk to meet demand. So how will Coca Cola’s Fairlife fare? It has 50% more protein, big deal these days as we cut our meat consumption, 30% more calcium, and lactose free with 50% less sugar than conventional milk and cost 2x milk. It will be described as coming from family farms and taste the same as regular milk. Will this marketing strategy create a bigger market for milk? 3/23/15