Futurist takes on ag trends
In a world that is wealthier than ever before, and in a nation with more disposable income, the next generation of farmers will have more opportunities than ever.
That’s the take home message of New Mexico State University economist Lowell Catlett, who spoke Monday to students at the New Century Farmer Conference at the headquarters of Pioneer in Johnston, Iowa.
Catlett is often billed as a futurist, but he reminded his listeners that no one really knows the future, and that experts like economists, political scientists and generals are no better than the general public at predicting financial trends, politics, of wars. Instead, Catlett lays out important existing trends to watch.
They turned out to be far more optimistic than today’s headlines.
When he was asked by one of the students at the conference what government debt means to agriculture, he said simply, “Ignore it.”
The net worth of U.S. households is $62 trillion, Catlett said. Federal debt amounts to $14 trillion.
“Americans can pay off the national debt and have a hell of a party,” said Catlett.
U.S. debt as a percent of gross domestic product ranks 37th among all nations, he said. That’s a smaller share than all of the countries in the European Union, even those regarded as strong, such as Germany.
“It’s popular right now because we have folks in political parties posturing for what? The elections,” he said.
Catlett’s view of economic trends is a remarkable contrast to today’s gloomy headlines. The U.S., has bounced back from the second worst recession since the 1930s to become a $15 trillion per year economy for the first time ever, he said.
And disposable income pays a lower share for necessities than ever. U.S. consumers spend just 32% of their income on food, alcohol, restaurant meals, housing and utilities (including the internet), he said.
That means, “I’ve got 68% of my income to do what with?” No one answered. “Buy crap.”
By that, he doesn’t mean junk, just things that aren’t really necessities. Like the 17 pairs of shoes that American women own on average. Or the Starbucks coffee his wife drinks, he calls it Four Bucks, and makes his own for pennies a cup. His own weakness is tools. “I’ve found it’s easier to buy a tool that look for a tool,” he joked.
All this means that Americans have the money to pay for differentiated products, whether it’s gluten-free beer made from sorghum or organic peanuts now grown by most of the commercial peanut farmers in Texas and New Mexico.
Demand for food, especially meat, is growing in the rest of the world, where some 2 billion people have gone from poverty to the middle class in the last 20 years.
“The first thing you do is change your diet,” Catlett said.
The newly comfortable include 300 million Chinese, who buy imported chicken from the U.S., as well as pecans and other nuts.
In the future, Catlett sees agriculture providing even more than today’s food and fuel.