Ag Issues Forum: Looking Ahead

The 6th annual Ag Issues Forum, sponsored by Bayer CropScience, had it all. Topics discussed included feeding the ever-expanding global population, facing regulatory hurdles at all levels, better managing finances and addressing critics of modern agricultural practices.

No matter what way it was sliced, however, the more than 70 media professionals who attended the event came away with one overlaying message — agriculture needs to speak up. “We as members of the agricultural industry need to be advocates for the ag community,” said Mike Deall, vice president of marketing, portfolio management for Bayer CropScience, during his opening remarks.

Tom Nagle, a managing partner for Statler Nagle and The Tipton Group, agreed. “How do we as the food industry respond to the changing needs of media, society and culture?” he asked. “This is the tremendous problem we face as an industry — how our good information gets communicated.” Nagle also suggested the industry form a permanent communications group capable of spreading the industry’s good word and combat negative and false claims.

Mounting Challenges

All speakers at the AIF agreed that getting the industry’s positive message out now is critical — particularly as the political climate in Washington, DC, has changed in the face of multi-trillion dollar deficits rhetoric. As former U.S. Secretary of Agriculture Clayton Yeutter reminded attendees: “Policy in agriculture could depend on how the budget deficit discussion plays out.”

In his estimation, Yeutter believes the 2012 Farm Bill will see significant cuts in its support of conservation and nutrition. More significantly, the “safety net” now provided to the nation’s growers will change. “Agriculture will want to preserve its safety net,” he said. “The new Farm Bill won’t eliminate this, but it will redefine it, with more emphasis on risk management.”

Besides this debate, Yeutter said agriculture will need to work on improving the public’s image of biotech crops as well. “We are going to have a lot of work in the coming years in this area,” he said. “We will not be able to feed the people of the world 50 years from now unless we increase food production significantly. Biotech can help us accomplish this.”

So can new technology. According to Gary Blumenthal, CEO of World Perspectives, U.S. growers are some of the most efficient food producers on the planet, with approximately 34,000 farms producing 50% of all commercial U.S. ag production (out of a total of more than 2 million). For many of these, the use of new technologies has been key to achieving this level of efficiency. “There has been an immense adoption of precision agriculture practices and products as the prices for these has dropped and the technology has improved,” said Blumenthal.

Another challenge from agriculture could come directly from the policies of the Federal Reserve. According to Jason Henderson, vice president and Omaha Branch executive, Federal Reserve Bank of Kansas City, agriculture is well-positioned to take advantage of the nation’s improving economy. “People are eating steaks at restaurants again,” he said. “This, in turn, is helping to keep commodity prices at high levels.” However, he added, long-range projections by USDA predict that crops such as today’s $7 per bushel corn prices will eventually settle back into the $4 per bushel range after 2013 — and remain there for the rest of the decade.

In addition to commodity prices, Henderson said agriculture needs to keep an eye on interest rates. “When interest rates rise, farmland values will fall,” he said. “Right now, where interest rates head will depend upon the pace of inflation and overall economic strength.”

Ultimately, though, World Perspec­tives’ Blumenthal said that the weather might present the biggest challenge to agriculture’s success in the near term. “In 2011, it is 22 years since we had the last major crop failure in this country,” he said. “And historically, the longest strength we’ve ever had in this country between major crop failures is 22 years.”

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