Some are projecting apocalyptic collapse in the U.S. economy and widespread unemployment, beginning as early as 2013.
But not everyone is in agreement as one agricultural economist speaking at the recent USA Rice Outlook Conference says good times are ahead for U.S. agriculture, and for the U.S. economy if proper steps are taken to correct its course.
Hopefully, old planet earth is still spinning at this moment – due to a shortened Christmas schedule, this was written prior to Friday, Dec. 21, 2012, which is the ominous last day of the Mayan calendar, the December solstice and the first day I can renew a prescription for my allergy medicine.
Of course, we could very well escape the Mayan apocalypse without a scratch, which was supposed to have happened at 5:11 a.m. central time by the way, then walk right off something called a fiscal cliff.
Robert Wiedemer, who correctly predicted the collapse of the U.S. housing market back in 2008, possesses one of the darker minds of the fiscal cliff club. He is now saying the United States could face 50 percent unemployment, a 90 percent stock market crash and 100 percent annual inflation, starting as soon as 2013.
If this happens, I am willing to do light farm work for food.
On the other hand, economist Michael Swanson, senior vice president of Wells Fargo and Co., who spoke at the recent USA Rice Outlook Conference in sunny San Diego, Calif., recently, thinks the fiscal cliff is nothing more than a really bad metaphor.
“They make it sound like it’s an actual cliff,” Swanson said. “But if we raise tax rates and cut spending, what would happen to investor confidence if we could take this huge deficit down from historic levels?”
Swanson is bullish on U.S. agriculture. “When you look at the resource base that we have, and what we do with it, it’s incredible. U.S. agriculture is going to be a long-term, thriving competitor in a global economy that wants more food and fiber. Agriculture is doing extremely well, and it’s not something that we can outsource.”
Another positive Swanson sees are the technological changes in energy which have increased both domestic crude oil and natural gas production. “Those are two avenues that are going to be huge benefits for the U.S. economy on an ongoing basis. It’s going to close our trade gap and give us a huge cost advantage over a lot of our rivals around the world in most commodity production.”
That’s not to say there are not pitfalls out there, beginning with inflated land values, made possible by low interest rates and high commodity prices.
Swanson stresses that the future will be more about bushels than acres. Every farm situation may be different, he says, but if your goal is to increase production, consider that the cost of improving an acre to increase production has risen at a far lower rate than the cost of purchasing an acre to increase production.
Agriculture’s future looks brighter than many would think, as long as we don’t fall off a cliff or bump into another planet.