Dr. Mike Boelhje, an agricultural economist at Purdue University addressed the MFA members about current trends in agriculture. Boelhje said, that like some in the audience, he didn’t like every aspect of change in modern agriculture. But, he said farmers must face the realities of today’s global market.

“The most important implications of opening up markets, of free trade, of WTO and all of those things that try to move products in the market may not be what we historically thought they were. Ten years ago, when I talked about globalization of agriculture, I would ask audiences what was the first thing that came to mind. They would almost always say exports. Now if I were to ask you what comes to mind, many of you would say competition. Many of you might even say imports. For the last 50 years, the United States has had a positive balance of trade. No longer true as of next year.”

“We are building a port in the Carolinas, not for a military base, not to handle container ships from Europe, but to import soybeans from Brazil to supply the southeast U.S. livestock industry. You can water transport soybeans cheaper from Brazil to the East Coast than you can 100-car unit trains from Ohio.”

“The good news is that we see growing demand outside of the U.S. domestic nutrition market. One of those is the industrial uses market. The most exciting growing part of this market is the energy substitution—ethanol, biodiesel. Does it surprise you ethanol is consuming 11 percent of the total corn crop of the United States? Ten years ago it was less than 2 percent. It will not be too many years, if the trend continues, that ethanol, or these industrial uses in general, will be more important as a source of demand for ag products than exports.”

“As people make more money, after they buy their television set, they move from a vegetable-based protein diet to an animal-based protein diet. One of the most exciting things about the long-term future of agriculture is that roughly one quarter of the world—now living in Asia—is going through the process of dietary transition. That dietary transition means they’re going to move from vegetable-based protein to animal-based protein. The only fundamental question we have is who will have the opportunity to supply this increased consumption and demand for grain products? Will it be us? Will it be the Ukraine? Will it be the Brazilians? Will it be the Australians? Who gets to participate in this market?”