by Chas Bonner
This morning on the radio was an interesting discussion about news organizations and their focus. Sadly, most do not report on good news. That is the expected. As a result, most news throughout the world centers on disaster, war, crime, intrigue, and rumor.
But we want to report in this blog on some of the positives in the agricultural world:
- Balance of trade is a consistent problem for the U.S., with imported oil accounting for about $180BB (yes, billion) negative balance, by far the worst contributor on the negative side of the ledger. However, agriculture should produce a positive balance of $126BB in 2010, by far the biggest positive contributor.
- Most of agriculture is profitable this year, and looks to continue profitable, with expectations up 10-20%. Naturally, there are terrible sectors that must work through the downside, and there will be painful transitions.
- The developing world, especially the Far East is performing as expected. China, India, Indonesia and others are seeing a growing middle class that is consuming more food and more meat, all great for the future of U.S. agriculture.
- The use of bio-fuels is increasing. The U.S. government is now pushing 15% ethanol additive to gasoline instead of the past 10%. Many diesel rigs are now running on bio-diesel. One of the airlines recently converted to bio-diesel in its jets. All changes increase the demand for corn, soybeans and other food sources.
- The importance of farming in a growing world is becoming clear to virtually all governments, and therefore there is much encouragement of agriculture through favorable legislation, regulation, and policy (although all of us can point to disincentives to better crops and higher production).
There are dozens more examples of a strong farm economy and a strong future for farming and ranching, but we are limited by space and the desire for brevity.
And briefly, we expect a happy new year, and wish you all the same!
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