Ag’s Continuing Cycle

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It’s funny, but when I talk with some of my friends about how well agriculture has performed relative to the rest of the world economy since the 2000s began, the same question always comes up: When will the bubble burst?

And this experience isn’t limited to the people I talk with directly – in my local newspaper this past weekend, there was a story discussing the skyrocketing prices farmland is commanding across the Midwest these days. However, the deck of this article warned that “corn prices” could collapse, taking farmland values with them.

Even at industry trade shows I’ve attended the past few years, various analysts and market insiders have predicted that the latest good fortunes for agriculture won’t last. “A crash is coming,” they’ve said, for a couple of years now, pointing to how extremely high fertilizer prices back in mid-2008 essentially derailed that ag boom.

And while I have no doubt the current financially strong cycle for agriculture will wane somewhat, I don’t believe an epic market crash is in the offing, for one very good reason: People need to eat.

[Poll: Do you think the current ag "up" cycle will end soon?]

Based upon the best estimates, the global population is headed towards 9 billion souls by 2050 (up 2 billion from today’s 7-billion mark). On average, 145 new people join the world each minute (subtracting deaths, of course). In my half-century of life alone, the world has passed the 6 billion and 7 billion population marks.

And as I have been reminded constantly from market watchers the past few years, these hungry mouths will need to be fed, and global agriculture (especially in the yield-improving hotbed that is America) will continue to be a major driving force in this effort.

So no matter what else happens in the coming years, the fact remains that the 145 new people born while you were reading this column should keep overall agricultural fortunes strong for a long time.

Sfiligoj is the Editor for both CropLife and CropLife IRON magazines. He travels regularly to cover industry events and has been dedicated to the ag retail industry since he joined the staff in 2000.

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