As we conclude another decade at the end of 2019, it is a good time to reflect back on some things that have occurred in the past decade. Many times, there can be dramatic change over the course of a decade, which has been no different in the decade from 2010-2019. In 2010, I-phones were just beginning to get used by large numbers of people, while today the I-phone is an essential tool in the lives of many in the U.S. population. On-line purchasing of goods and services was just developing at the beginning of the decade, while today, online shopping has forced the closure of many traditional merchandise stores and has changed the entire dynamics of the consumer retail business model.
Most businesses or individuals could come up with many examples how things have changed in the past decade from 2010 to 2019. There have also been some interesting developments in the agriculture industry in the past decade. Following are just a few things that have occurred …….
- There has been a rapid growth of technology in agriculture in the past decade, which has affected everything from farm machinery to farm business management. In 2010, “auto-steer” technology in farm machinery was in its developmental stage and today it has become quite common in crop production. Robotic milking equipment has been initiated during the past decade, and while it is still quite expensive, it is definitely a “wave of the future”.
- The growth of “precision farming” methods was enhanced greatly during the most recent decade, allowing crop producers to more precisely apply crop fertilizer and chemicals, which is both more cost-effective and environmentally friendly.
- In the past decade, we have seen significant genetic improvement in corn hybrids and soybean varieties, which has resulted more weather tolerance and greater yield potential. Some of these corn hybrids and soybean varieties have been bred to allow for alternate chemicals for weed control, as well as for more natural control of diseases and insects, without the use of as many chemicals. While there can be both economic and environmental benefits from the development of advanced seed genetics, there are many groups and individuals opposed to the growth and use of the so-called “GMO” seed hybrids and varieties.
- The livestock industry has also continued to see both genetic and meat quality improvement in the past decade. The industry continues to offer high quality and safe meat and dairy products to consumers in the U.S. and around the world.
- The ethanol industry grew immensely in the decade from 2000-2009, growing from under 50 production facilities to 185 ethanol plants, and production increasing from just over billion gallons per year to over 15 billion gallons per year. In the past decade the U.S. ethanol industry has been more stable, with approximately 200 operating ethanol plants producing over 16.5 billion gallons per year. The capacity to use ethanol in the U.S. has also “flatlined” in recent years at a total usage of just over 15 billion gallons per year, despite efforts by industry groups and States such as Minnesota to increase the amount of ethanol in gasoline fuel blends. The soybean-based bio-diesel industry has also continued to grow and develop during the past decade, and Minnesota has also been a leader in this industry.
- Land values increased sharply during the first few years of the past decade before declining toward the end of the decade. Based on the Iowa State University land value survey, which released in December each year, average Iowa land values were $4,371 per tillable acre at the end of 2009, then reached a high of $8,716 per acre by the end of 2013, before declining to an average of $7,183 by the end of 2016. In the most recent survey, the average land value in Iowa was $7,432 per acre at the end of 2019.
- Government farm programs also changed considerably during the past decade. The 2008 Farm Bill governed farm programs from 2010-2013, which included guaranteed annual direct payments of $25-$30 per corn base acre and $10-$15 per soybean base acre in Southern Minnesota. These direct payments were eliminated in the 2014 Farm Bill (2014-2018) and replaced by a farm program that gave eligible producers a choice between the price-only, price loss coverage (PLC) program, and the ag risk coverage (ARC) program, which was revenue-based factoring in both crop prices and yields. The 2018 Farm Bill has continued a choice between the PLC and ARC programs for 2019-2023.
- The importance of ag trade and exports of grain and livestock products has been growing in importance for several decades and continued to increase in the most recent decade. China, Mexico and Canada account for over 40 percent of all U.S. ag exports, So, when normal ag trading was stymied by tariffs and an ongoing “trade war” between the U.S. and these three countries in the past two years, it reduced the U.S. exports and lowered farm income levels in both 2018 and 2019. The “trade war” also resulted in USDA making significant “market facilitation program” (MFP) payments to crop and livestock producers in those two years to offset the reduced income levels. As we end 2019, there appears to be some hope to end the “trade war” with China and to implement a new trade agreement with Canada and Mexico.
- “Climate change” and “global warming” were just beginning to be discussed at great length by U.S. and World leaders, as well as by the agriculture industry, at the beginning of the decade. As we enter 2020, ways to address these issues are being discussed by every major industry and by all levels of government. Many of our political leaders at the National and State levels are considering measures that could drastically impact farm operations in the future, as well as affect the entire U.S. population.
- During the past decade, there has been a desire by an increasing number of consumers to know more about the original source of their food and how it was raised. This has resulted in the growth of “niche marketing” opportunities for farm families to raise organic crops, to sell products through farmers markets, and to sell “natural” or “source identified” meat and dairy products. This growth of this trend is likely to continue in the coming years, especially closer to urban areas of the U.S.
- The winery and craft brewery industries are quite related to agriculture, with both industries were in their infancy in 2010 in States such as Minnesota; however, both industries are now mainstays in many Midwestern communities at the end of the decade.
- Up until a few years ago, hemp was only associated with marijuana; however, the production of industrial hemp for fiber and CBD oil has really taken off. This was further enhanced when hemp was included in the 2018 Farm Bill as a viable crop, making hemp eligible for crop insurance in 2020. Over 30 States, including Minnesota, now have licensing procedures for raising hemp. In 2016, Minnesota issued 6 grower licenses totaling 38 acres under a hemp pilot program, which had grown to over 300 growers and over 8,000 acres by 2019. There are still many unanswered questions related to hemp production, grower contracts, and the potential for the hemp industry, as we head into the next decade.
There have been many changes in the agriculture industry and in the daily lives for everyone during the decade of from 2010-2019. We are likely to see many more changes and advancements during the next decade …… several that at are positive, as well as some that may be negative. Whether in the agriculture industry or just being a citizen, we all need to be prepared to adjust and adapt to change in the coming years, because it will happen.
Note — For additional information contact Kent Thiesse, Farm Management Analyst and Senior
Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960);