AgroNomics vision Presentations
GROSS DOMESTIC PRODUCT CONCERNS
Gross domestic product of nations is a major indicator of economic health and what to expect, according to all three speakers who provided comments to the crowd at different times during the AgroNomics Vision conference.
Conway noted, without agriculture this country’s GDP would be worse than it is. “Look what’s happening on the GDP front. We are like one of the weakest in growth; we’re like 23rd in the world,” he said.
Kohl mentioned Brazil, Russia, India, China, South Africa, South Korea, Indonesia, Mexico and Turkey as emerging nations of major importance to the U.S. ag economy. He contends the future U.S. “economic prosperity and wealth [will] center around these emerging nations,” which account for 25 percent of the world economy. Since 1998, he noted, “they have accounted for 53 percent of the world’s economic growth.”
Kohl explained his 8-5-3 GDP rule. “If you see the gross domestic product of these nations averaging above 8 percent, which since 1998 has averaged 9.8 percent, then there is going to be heavy demand for food, fiber and fuel—oil, copper, steel, etc. If it drops back to 5 percent demand softens, and if it drops back to 3 percent, it means these countries are in a recession. And rural America goes into a recession.”
Another consideration about rural America economics is that the wealth is not being generated as much from the crops today as it has been in recent years. For rural America, it is becoming a situation of what is under the ground instead of what is on top of the ground. “We have this great wealth in agriculture and in rural America, but much of it is coming from oil, gas and minerals,” Kohl said.
He further mentioned that “water will be the new gold in the West and certain parts of the Midwest.”
Being additionally positive about rural America, Kohl suggested that technology will pull farmers and landowners through potentially tough times.
“Technology is going to have a big influence. Look at the drought a couple years ago; it could have been a lot worse if we didn’t have technology. You won’t believe what is coming in technology. You
are seeing the convergence of three technologies that will influence your industry—biotech, information tech and engineering tech. These are going to change where we farm, how we farm and our land management practices.”