While everyone’s mind is on snow, ice and sub-zero temperatures, the Midwest economy continues to thaw.
The Business Conditions Index for the Mid-America region rose for the fourth straight month, to 58.9 in January, according to the Associated Press. That compares to 57.5 in December, 55.9 in November and 52.3 in October. January was the 14th consecutive month that the index came in above growth neutral.
The people who compile the index say that any score above 50 predicts economic growth in the next three to six months.
The states that comprise the region are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota, all states that produce grain and livestock.
There is every reason to believe that these happy trends will continue — and quicken when it finally warms up.
Commodity prices are high, farm economists say, because they are driven by increased demand created by a growing world population and the increased ability in Asia, the Mideast and elsewhere to buy food — and to upgrade their purchases to include more meat. Because grain and meat prices are being driven by more mouths to feed rather than market conditions created by drouth, flood and other fluctuating factors, the future looks more and more secure for food producers.
That is not just good news for America’s Midwest, but also for farmers in Brazil, Australia, New Zealand and Europe.
U.S. farm states should gear up to respond to what looks to be a long-lasting and growing market for grains, poultry, beef, pork and lamb. Congress should also be ready to shift from farm production subsidies no longer needed to help create infrastructure to move America’s farm production to the world’s hungry mouths most efficiently — highways, rail, river barges, modern ports.
The U.S. Department of Agriculture should also support an expansion of research in all phases of food production. Kansas State University and the nation’s other land grant universities with strong farm research faculties will only need more funding to meet the challenge that a world fast moving toward a population of 7 billion (with 9 billion within demographers’ vision) presents.
Farming, the world’s second oldest profession, is coming full circle back to the prominence it enjoyed when Kansas was a baby 150 years ago.
— Emerson Lynn, jr.
