The Hand That Feeds U.S.
December 13, 2011
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The Economics of Fortune Telling
 
People have tried to predict the weather since the beginning of time. And while we may have come a long way since believing the world is flat or that everything revolves around the planet Earth, we're no closer to understanding all of the nuances that make the atmosphere react how—and more importantly, when—it does.
 
Likewise, the globalization of our financial system, in the process of creating endless opportunities, has created endless uncertainties—creating its own unpredictable atmosphere.
 
No one can know exactly how either are ever going to turn out and yet, there is one industry that has to deal with the consequences of each on a daily basis: Agriculture.
 
Some, including the Wall Street Journal, have criticized the U.S. Department of Agriculture for its inability to accurately predict these unpredictable circumstances, saying that economists are to blame for inaccurate forecasts.

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Rising Farm Incomes Dampened by Rising Expenses
 
Agriculture has had a strong year.
 
We’ve been reading reports of farms prospering for the better part of a year now. In October it was said that Iowa’s corn and soybean crop alone would almost quadruple the state’s budget. Just last month, the USDA announced that farm exports reached a record high of $137.4 billion in 2011.
 
And now we’re starting to see some of that prosperity make it’s way back to rural America.
 
Last week, the Agriculture Department announced that farm income was up 28 percent from 2010.
 
This growth, says Agriculture Secretary Tom Vilsack, is a reflection of the hard work and innovation of the farmers and ranchers who continue to take risks and embrace new methods and innovations that dramatically improve efficiency.

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Key Scientist Says Agriculture Productivity Growth Must Increase
 
A leading scientist recently told American millers that U.S. investment in agricultural research is less than 1 percent of the total farm gate value of goods, which must be increased by developing a greater voice for "the science of agriculture" through cross-sector efforts.
 
Dr. Robert Beachy, former head of USDA's National Institute for Food and Agriculture (NIFA) and a trustee of the Donald Danforth Plant Science Center, spoke at the North American Millers' Association annual meeting late last week.
 
From his unique perspective as a former Obama Administration official and a leader of a major, non-profit research center, Beachy described for NAMA members his view of opportunities and challenges for both U.S. and global agriculture.

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CONTENTS
The Economics of Fortune Telling
Rising Farm Incomes Dampened by Rising Expenses
Key Scientist Says Agriculture Productivity Growth Must Increase
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