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John Block: Farm Economy

By former USDA Secretary John R. Block

I was back on the farm in Illinois last week.  I’m glad to report that the pigs are healthy and happy, and we are ready to start planting next month.  Some farms are not as fortunate.

Wild fires have burned more than 1,000 square miles, killing thousands of cattle in Kansas and Oklahoma.  Senator Pat Roberts, Chairman of the Senate Ag Committee who is from Kansas, said, “It tears at your heartstrings to meet with people who have lost their homes, ranches, and farms.” 

Now, we also have reports of bird flu in the U.S. where thousands of chickens and turkeys must be destroyed.  Bird flu can be spread by ducks and other birds.  That’s always a risk.  Here is a solution.  Effective on St. Patrick’s Day, no more free range chickens in Ireland.  “The egg and poultry sector will no longer be allowed to use the free range label.”  Animal rights advocates won’t like that.

We have our challenges in the U.S. agriculture industry.  In 1970, our share of global grain trade was 65%.  We are now down to 30%.  Net farm income is half what it was just 4 years ago.  Farm income is projected to drop another 9% this year.  180 million new acres have been plowed into crop production in the past 10 years.  Those are not U.S. acres.  We have actually reduced our crop acres.  Look at Brazil – almost overnight, Brazil has become number 1 in soybean exports.  We used to be the world’s largest wheat importer.  Today, Russia is the largest wheat exporter.

We can’t eat any more in our country, so we need to look to the export market.  We export 70% of our cotton and 50% of our soybeans; wheat at 38%, and pork at 20%; and corn, dairy and poultry at 15%.

We run a $16 billion trade surplus in ag products, but have a $12 billion deficit with the EU.  China has been a very good market for us but they could be better.  Their trade surplus with us in all goods and services is $330 billion.  Maybe the EU and China could buy more of our farm products.

Agriculture is a cyclical industry, and very competitive.

In closing, we have good news.  Our candidate for Secretary of Agriculture, Sonny Perdue, will be up for confirmation very soon.  At his request, I met with Governor Perdue in February.  He will be doing all he can to lift our struggling farm economy.

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