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Future Ag Trends: Less Protein Consumption, More Women Managers
OMAHA, Nebrasaka -- Changing markets and the demands of the millennial generation are just a few of the breathtaking changes that economist Dave Kohl expects in the years 2020 to 2030, a decade of transition on farms.
Kohl, a retired Virginia Tech economist with an interest in a value-added dairy farm that sells directly to consumers, is a popular speaker at agricultural meetings. He capped off the National Agricultural Bankers Conference in Omaha, Nebraska, on Wednesday with a sometimes upbeat view of the future, in spite of low farm income that’s bringing stress to lenders and farm borrowers.
“The problem is everybody thinks this is just a downer period, but the real good producers are making adjustments,” Kohl said at the meeting organized by the American Bankers Association.
Kohl said he doesn’t expect a return soon to Midwest net farm income that averaged about $125,000 a year between 2007 and 2012. Current income of about $35,000 over the past five years is likely to be more typical.
Although the rest of the world economy is slowing, the U.S. economy is at an all-time record, he said.
Like others, Kohl is watching current trade issues, including whether or not Congress will approve the new U.S.-Mexico-Canada Agreement. Near-term challenges include rising interest rates and a strong dollar.
Unlike the farm debt crisis of the 1980s, farmland values remain stable.
“The major reason your farmland values have not collapsed is because the farmland is owned by baby boomers – farmers who are late in their farm cycle,” he said.
He asked whether those farmers will readjust, “or are they going to refinance themselves into oblivion?”
“That’s going to be the key in 2019,” he said.
Kohl encouraged bankers to look beyond that, to key trends over the next 10 years.
They include changes in diet, especially among millennials. In Germany, one in 10 consumers are vegans who don’t eat animal products. Many U.S. millennials are, too.
Kohl, like others in the dairy industry, is challenged by rising consumption of milk-like products from almonds, soybeans, and other vegetable sources.
“The latest one that came out in The Economist magazine – cockroach milk,” he said. ““I hope that’s a sign, because we can market against cockroach milk.”
Changes in food preferences are just one trend that Kohl expects in the coming decade.
More use of robotics on farms is another. Better managers are using robots for gathering information, not just to replace labor, he said.
Kohl also expects to see farms become larger, more complex businesses run by cousins and non-family members, and with more women in management.