This final column of 2015 is devoted to the first 15 years of the 21st century in agriculture and rural America. What is now history has built a tremendous platform for the century’s first quarter mark. Over the next ten years, change will accelerate and opportunities will abound. As we look ahead, some observations and perspectives of the past may prove helpful.
At the beginning of the century, it would have been nearly impossible to predict the great commodity super cycle that brought unprecedented profits to many sectors of agriculture and rural America. Most all commodities were lifted by emerging nations’ demand for food, fiber, and fuel in combination with various other factors.
Additionally, it would have been extremely difficult to imagine the extent to which the great recession, both in the U.S. and worldwide, would benefit agriculture. Directly or indirectly, U.S. Federal Reserve policies placed both commodity prices and land assets on an upward course raising them to unseen levels. Now, policies of central banks around the world are creating the opposite effect for U.S. agriculture and economies. The ultimate outcome of global central bank policy remains to be seen.
In the history books, agriculture’s first 15 years of the new century will be highlighted as a time of technology expansion and implementation. Biotechnology led the way in technology advancements followed by engineering and now, information and data. This technology offered a competitive advantage to many in agriculture, particularly, in the U.S.
I believe a “period of renaissance” accurately describes the time period of 2000 to 2015 in agriculture. The transition of generations and attractive profits were like a magnet drawing young people into the industry. Enrollment in agriculture programs at colleges and universities skyrocketed as agriculture attracted the interest of many millennials, who now seek to establish their place in the industry. The continuation of technology paired with millennials entering agriculture bodes well for the future of the industry.
Despite the tremendous advances achieved from agriculture’s revolutionary changes, the industry continues to encounter various challenges ranging from environmental to food safety to labor laws and more. These obstacles accelerated as a larger share of the population and policy makers moved into suburban and urban areas becoming less aware of rural industries like agriculture. As agriculture continues to advance additional obstacles will also develop that demand attention.
Thus far, the 21st century has highlighted the importance of global economics and trade to the profit margins and sustainability of many producers. Global trade risk is now one of the top three challenges facing today’s producers. A globally integrated industry, agriculture must embrace interdependency for future success.
In addition, in the first 15 years, local, natural, and organic food markets steadily emerged. New entrants in the industry along with traditional producers are aligning with customer segments in the U.S. and abroad who have similar philosophies on food, fiber and fuel. Once thought of as a fad, this consumer market is now a more important economic segment in agriculture.
Extremes in weather along with the importance of natural resource management are forefront issues in strategic planning for individual businesses and the industry as a whole. As many producers assimilate their teams of advisors, the weatherman now holds a more significant role because of the advancements in technology and performance capabilities of weather applications. Paired with agronomic practices, weather data could make dreams a reality in agriculture.
Undoubtedly, the 21st century’s first 15 years were laden with change, challenges, and opportunities. Sound management and financial practices offer a large piece of the profits to those that embrace and execute their strategies. While the past events highlighted here are not a comprehensive list of the century’s beginning years, they do provide a basis for the next decade as one moves toward the first quarter mark of the new century. Looking forward, use the past as your insight into the future to plan strategically for future success.
From our family to yours, we wish you well for a season of happiness, prosperity and peace. We look forward to kicking off the New Year in agriculture together.