Embed Size (px)
DESCRIPTION
Trends in Agriculture. Michael Duffy Associate Director of ISU Leopold Center. Trends in Production. Decreasing farm numbers and changing distribution Narrowing profit margins Increased dependence on government Increasing age of farmers Changing sources of income Increased concentration. - PowerPoint PPT Presentation
Citation preview
Trends in Agriculture
Michael Duffy
Associate Director of ISU Leopold Center
Trends in Production
• Decreasing farm numbers and changing distribution
• Narrowing profit margins
• Increased dependence on government
• Increasing age of farmers
• Changing sources of income
• Increased concentration
NUMBER OF IOWA FARMS
0
50
100
150
200
250
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
Year
Th
ou
san
ds
Thousands of Farms
Average Iowa Farm Size
0
50
100
150
200
250
300
350
400
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
Year
Ac
res
Distribution of Iowa Farms by Sales Category
0%
10%
20%
30%
40%
50%
60%
70%
1978 1982 1987 1992 1997
< 10 K 10 - 1000K 100 - 500K > 500 K
Percent of Iowa Farms by Sales Class, 2001
0%
5%
10%
15%
20%
25%
30%
35%
40%
< $10,000 $10,000 - $100,000 > $100,000
Distribution of Farms in the United States, 1999
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Limite
d Res
ourc
e
Retire
men
t
Reside
ntial
/lifes
tyle
Farming
Low
-sale
s
Farming
High
-sale
s
Larg
e Fa
mily
Far
m
Very L
arge
Fam
ily F
arm
Nonfa
mily
Far
m
Narrowing Profit Margins
Iowa Farm Output, Total Expenses, and Net Farm Income
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
Output Net Income Total Expenses
Iowa Net Farm Income as a Percent of Gross Income
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
Increased reliance on government payments
Iowa Direct Government Payments
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
Government Payments as a Percent of Net Farm Income
0%
20%
40%
60%
80%
100%
120%
140%
160%
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
Farm Distribution of Direct Government Payments in Iowa, 1996 - 2000
0%
10%
20%
30%
40%
50%
60%
70%
80%
1% 10% 20% 80%
Percent of Farms
Per
cent
of P
aym
ents
Increasing age of farmers
Average Age of Iowa Farmers
0
10
20
30
40
50
60
1964 1969 1974 1978 1982 1987 1992 1997
Percent of Iowa Farmers by Age
0%
5%
10%
15%
20%
25%
1959 1964 1969 1974 1978 1982 1987 1992 1997
< 35 > 65
Changing sources of income
Percent of Iowa Farms by Off-Farm Employment
0%
10%
20%
30%
40%
50%
60%
1964 1969 1974 1978 1982 1987 1992 1997
Any Off-farm Over 200 days off-farm
Percent of Iowa Farms with Hogs or Cattle
0%
10%
20%
30%
40%
50%
60%
70%
80%
1964 1969 1974 1978 1982 1987 1992 1997 1998 1999 2000
Hogs Cattle
Iowa Market Hogs and Breeding Herd
0
2000
4000
6000
8000
10000
12000
14000
16000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Mar
ket
Ho
gs
0
500
1000
1500
2000
2500
Bre
edin
g H
erd
Mkt Hogs Breeding herd
Average Number of Hogs per Farm with Swine in Iowa
0
200
400
600
800
1000
1200
1400
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
2001
Percent of Farmers Who Think Overall Economic Prospects will Improve over Next 5 Years
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Trends in Processing and Retail
• Disappearing middle
• Increasing concentration
Number of Pork Slaughter Plants
0
100
200
300
400
500
600
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Percent Hogs Slaughtered by Plant Size
0%
20%
40%
60%
80%
100%
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
% H
ogs
Sla
ught
ered
<300,000 300,000-999,999 1,000,000 +
Number of US Cattle Slaughter Plants
0
100
200
300
400
500
600
700
800
900
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
Cattle Slaughtered by Plant Size (thousands)
0%
20%
40%
60%
80%
100%
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
% C
attle
Sla
ught
ered
<500,000 500,000-999,999 1,000,000 +
Concentration Ratios for the Top Four Firms
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
BeefPackers
PorkPackers
Flour Dry Corn Wet Corn Bean Crush Ethanol
Top Five Grocery Retailers in the United States*
1997• Kroger Co• Safeway• American Stores• Albertson’s• Ahold USA• CR5=24%
2000• Kroger Co.• Wal-Mart• Albertson’s• Safeway• Ahold USA• CR5=42%
* Source: Heffernan, William
Trends in Consumer Behavior and Spending
• Where food is consumed
• How much is spent for farm production
Expenditures at Home vs. Away from Home
0%
10%
20%
30%
40%
50%
60%
70%
80%
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
Per
cent
age
Spe
nt
% at home % away from home
Farm Value Share of Retail Price
0
10
20
30
40
50
60
1994 1995 1996 1997 1998 1999
Pe
rce
nt
Beef Pork Lettuce Green beans Pork and beans Corn flakes
Trends in Agriculture
• Agriculture has changed and will continue to do so• Increased awareness of environmental and other problems
associated with current farming systems are leading to a rethinking of our current approach
• Changing consumer preferences and lifestyles off new options and alternatives for production agriculture
• Increased awareness of our dependence on imported energy is opening new opportunities for agriculture to lead the way in a biobased society
• We can not go backwards. We have to go forward recognizing that things will continually change but that we do have some control over the direction of the change.
