Convention gives ranchers ideas for 'Growing for our Future'
By Kylene Scott
Record-breaking attendance at “Growing for our Future,” a joint convention of Colorado Cattlemen’s Association, Colorado Livestock Association, Colorado CattleWomen, Junior Colorado Cattlemen’s Association and Future Livestock Leaders, helped make the second annual convention a success. The event was June 17 to 19 in Breckenridge, Colo.
Each day was filled with meetings and events for each of the organizations. CCA committee meetings highlighted the first day. Damian Mason, an agricultural humorist, woke up the crowd June 18 as part of the speaker session. He is a professional speaker, entertainer, writer, businessman and farm owner.
Following the humor segment, attendees got into the real meat of the industry by listening to Andy Gottschalk, senior vice president at RJ O’Brien & Associates. But first, Tony Frank, president of Colorado State University, addressed research, facilities and related issues. In his five years at in the position as president, Frank has learned a few things about agriculture and the future of CSU.
“We’ve been fortunate to have some absolutely great livestock leaders within the university, but I think it’s also fair to say that as a university, we haven’t necessarily given those people and programs, the resources to replace themselves,” Frank said. “We’ve let some of our programs decline a bit. We’ve let our facilities slip, and as I tell my cabinet when ever we talk about this, that didn’t happen on our watch, but it falls to us to fix it. And we have to take that responsibility seriously, because to my way of thinking, one of the biggest challenges we have as a society is global food security.”
During the last four years, Frank said, CSU has invested $12 million in agricultural sciences, $8 million of that going into the animal science building. Another $2 million was invested in incentives around tuition return.
“One of the things we’re trying to do as an institution is to give more incentives to the programs to grow their enrollment and have great high-quality programs,” he said.
Another million was spent on deficits that had been run up in a couple of programs, and more money was spent on new start-up expenses and programs within the college of agriculture sciences.
“A $12 million dollar commitment is something that I’m pretty proud of, and I don’t think we’re done yet,” Frank said. “(Our dean has) developed along with his chairs and faculty a strategic plan for the college of agricultural sciences and I’ve told him to build on that. To come back and pick a couple of areas where we can continue to make investments over the next 5 to 10 years and really develop programs that are among the very best in the world.
Frank hopes the programs are linked to Colorado agriculture—animal agriculture and beef in particular.
“So usually, when we say we need your help and we are going to need your help to get there, that means we’ve got our hands out and we hope your wallets will follow. But I’m not here this morning to ask you for money,” Frank said. “I suspect we will at some point, but I’m not here to do it this morning, because candidly I’m not sure at this point necessarily that we know what we ought to ask you for.”
Frank said one of the challenges he faces is what is worrying the leaders in the agriculture industry. He wants to better understand those issues.
“Now I think we can solve those things. I think they’re solvable through communication channels, so one of the ways I’m going to ask you to help us is to get involved,” Frank said. “We have no shortage of ways we are trying to improve communication between the ag industry—particularly the animal ag industry—and our university.”
Gottschalk spoke about new world economy and growth opportunities for U.S. agriculture in the coming years.
“What is happening around the world is more important today than ever in your lifetime. Things are changing at a breakneck speed right now,” Gottschalk said. “It’s difficult to stay on top of it, but I submit that the future of agriculture is outside of the borders of the United States and you all need to be aware of what is happening.”
Change around the world is happening very rapidly, and it’s unbelievable, he said.
“We have gone through a dynamic period of growth, and the emerging countries and the developing countries over the last 30 years,” Gottschalk said. “Many of you have probably been told it’s a straight-line situation and it’s going to go on forever without interruption forever, and I would disagree with that—respectfully disagree with that.”
Gottschalk said to compare what is currently going on in the world, take a look back at the changes that occurred from 1995 to 2011. The U.S. represented 24 percent of the world’s Gross Domestic Product, and in 1995 it was a fourth of the world’s GDP—all produced by 5 percent of the world’s population.
“When children are taught in school that we’re a wasteful society and we consume a fourth of the world’s resources, they fail to tell them in the next breath that we produce a fourth of the world’s goods and services and we are 5 percent of the world’s population,” Gottschalk said. “That is something to be proud of. That’s not something that we ever have to apologize for. We are the envy of the world—the absolute envy of the world. People that dislike us dislike us because of our success, not because of failure.”
Gottschalk said to be aware of the BRIC countries, or Brazil, Russia, India and China. If their GDPs are combined, they are still slightly less than the GDP of the United States. There are a lot of other developing countries besides the BRIC, but they all will be growing and changing. Gottschalk predicts that by the year 2025, the consuming class will swell to 4.2 billion people.
“Those people will add to the consumption by the total of $30 trillion or about half of global spending by the consumers. This trend is projected to occur by the year 2025,” he said. “So when I said earlier, that the future of American agriculture is outside the borders of the United States, this is the reason why. Your consumption growth is going to occur outside our borders. You need to know what is happening, but more importantly you need to understand what you have to do to capture these markets.”
Gottschalk said approximately 78 percent of China’s wheat crop is irrigated, but in his next breath the average farm is 1.16 acres. Many farmers don’t own the land they work on. Provincial and local governments have control of the land.
“Why hasn’t agriculture grown? Why don’t we have larger entities? Remember I said it’s going to take some tremendous change from the government,” Gottschalk said. “But how is China going to become self-sufficient in food? You’re not going to do it with people trying to make a living on 1.16 acres of land. The reason you can’t do anything is the government involvement.”
“There are no private ownership rights in China, and until that changes, China is going to be forced to import increasing amounts of food to cope with the rising standard of living to meet those needs,” Gottschalk said. “I don’t know how well that’s going to sit with the political environment they have over there or the political structure but it’s something that’s going to have to happen.”
Gottschalk is familiar with a couple of instances of state-sponsored entities in China that could help the country become self-sufficient in food production. One, a 300,000-acre farm is just in the development process. It looks a lot like an American farm with modern irrigation practices.
“They understand the need and the things that they have to do and become self-sufficient. But I think one of the things that will continue to act as a barrier to this is the fact they don’t have enough land ownership,” Gottschalk said. “You don’t have land ownership you can’t go to a local bank and use that as equity to borrow to expand your operation, so you’re just kind of stuck.”
Fifty-two percent of China’s crops are irrigated, and they have more irrigated land or a higher percentage of land irrigated than any country in the world. News reports, Gottschalk said, say China, too, has water shortages; however, the country is working to remedy that, and just recently opened a viaduct to deliver water from the Yangtze River to the eastern corridor, up to the northern plains and into Beijing. Supposedly it will move 170 times the amount of water that is used by the city of Los Angeles in a year.
“I think ultimately you’ll see more of the state owned enterprises develop with modern irrigation and everything. But it’s to help the whole agricultural area because a significant portion of the agricultural output is grown in that northern region,” Gottschalk said. “So it’s to help that whole region, but I think to meet their internal demand you are going to see more and more state-owned operations on that scale.”
China has other problems too, Gottschalk said. Annual double-digit growth for GDP is now for the history books, and they no longer have the cheapest labor pool in the world. That is moving to other areas of Asia and into South America—countries like Laos, Thailand, Vietnam, Cambodia, Indonesia and Mexico.
“One thing that China is having to confront this upward pressure on labor rates. It’s already been going on for the last several years, and as a result of that you have seen more companies deciding not to locate in China,” Gottschalk said. “Or move from China to some other country. The United States, too, is benefiting from this.”
Times are changing in China, Gottschalk said, and leaders are beginning to think that the market is the creator of social wealth and wellspring of self-sustaining economic development.
“China is the lead dog in terms of developing and emerging economies and you need to pay attention to what’s going on there,” Gottschalk said. “As I said, with China slowing down, the countries that were aggressively exporting industrial raw commodities to China are suffering—Australia, Canada, South America.”
Gottschalk fielded a number of questions. One asked if there is really going to be a large explosion of world population, and he didn’t believe that is going to be the case.
“As economies improve and the standard of living goes up family size gets smaller,” he said.
He also believes that world scare of food production is overstated as well. “Way overstated.”
To wrap up, Gottschalk reiterated the changes going on in the world. World GDP growth will slow having a negative impact on industrial commodities—which have already peaked. Food commodities are separate that from industrial commodities.
“Food is a necessity and people will respond differently,” he said. “Food demand is separate from industrial demand. Food demand is expected to grow consistent with improvements in developing and emerging economies and their incomes.”
The decline in industrial commodity demand is China’s growth slows will negatively impact countries like Australia to South America as well as Canada. Rapidly changing demographics are a drag on Asia, Europe and the former Soviet Union countries. Demographics favor India, Mexico, South and North America.
“We’re in the driver’s seat folks. Do we know how to drive this vehicle? The greatest opportunity for you as agriculture continues to see quality improvements and expand exports of meat,” Gottschalk said. “Quality sells. We produce the best product in the world. We should learn how to sell it. Knowing what is selling in the rest of the world is more important today, than it is in the past. The future of American agriculture lies beyond the borders of the U.S.”
Kylene Scott can be reached by phone at 620-227-1804 or by email at email@example.com.