Speaker reminds growers: Not all the news is bad
By Jennifer M. Latzke
Many people choose to focus on the bad news from any one of thousands of media outlets, but according to the keynote speaker at the recent Colorado Ag Classic, there is good news to be found, even in this sagging economy.
"I was not only born in the best country, but in the best period of mankind," said Al Ambrose, vice president of risk management for oilseed process at CHS, Inc. "There's a lot of bad news out there, but there is some good news, too."
Through a brief lesson on economic history, from World War II to the present, Ambrose gave producers a look at just why agriculture has it so good today.
A prosperous formula
Ambrose began by explaining just how prosperity is allowed to flourish in a society. He gave a simple formula for prosperity that allows for citizens to set their own economic goals.
"There must be rule of law, or ordered liberty," he said. "People need to be free to capitalize on their talents and interests and know that their things will not be taken by thugs." Along those same lines, there must also be limited taxation and clear property rights.
Another key to prosperity is the individual's opportunity to participate in capitalism. "You all are here to be better or smarter or to advance in life and be more informed," Ambrose said. "We all have equal opportunities, but we choose how far we want to push those opportunities."
Other components include competition, trade, a sensible immigration policy, and, most importantly, democracy.
"India has a democracy, but no capitalism," he said. "China has capitalism, but no democracy. Democracy in absence of opportunity is worthless."
U.S. agriculture is healthy
Agriculture is one of the healthiest segments of the U.S. economy, Ambrose said, and that can be attributed in part to a rising global market for U.S. food exports.
"As people get jobs, 90 percent of their income is used for food," Ambrose said. "Per capita vegetable oil consumption is measured by the IMF as an indicator in the changing living standards around the world. Very poor people don't purchase meat. But with rapidly rising incomes come better diets." He said that best estimates have nearly 950 million families moving into the middle class by 2020.
"If even half of that number is correct, we have to create that much more food," he said.
To meet the rising demand for food, feed, fuel and fiber, farmers will need to tap the potential of biotechnology. He gave the example of China where, in 1978, 82 percent of the population, or 790 million, lived in rural areas. In 2002, that number dropped to 61 percent. As the Chinese leave their rural communities for the jobs of the cities, they join the middle class, and they require more food and fuel. Biotech can meet that rising demand, and do so with fewer chemicals, he added.
"It's supply side economics," Ambrose said. "Supply creates its own demand." As China opened to trade with U.S. companies, he added, U.S. companies began moving their production factories there. Consumer goods were then sent to the United States and as profits rose, the Chinese ate better and so they bought more U.S. grain.
"We need to stop demonizing trade partners," he said. "We're in this together. We either grow together, or fight with trade restrictions and we all go down.
"Americans can only be beaten by Americans," Ambrose added. "We continue to have 25 percent of the global GDP, but we have less than 5 percent of the population. There is $14.6 trillion in the U.S. economy, and that's more than Japan, Germany, China and the UK combined."
"Most of the world wants to live like us," he said. "They just have to persist at it.
"The forward march of global prosperity hangs in the balance."
Jennifer M. Latzke can be reached by phone at 620-227-1807, or by e-mail at email@example.com.