By DOUG GRAVES

Ohio Correspondent

RICHMOND, Ind. — There were five industry leaders speaking to several hundred people who attended the Harvest Land Winter Innovation Forum Feb. 20 at the Wayne County Fairgrounds in Richmond.

All topics were intriguing, but the one given by nationally recognized economist Terry Barr was standing room only, for good reason. Attendees were concerned about their future and factors like Chinese tariffs, commodity prices, consumer demands and a global grain outlook.

“We’re in a ‘good news, bad news’ situation in agriculture right now,” said Barr, during his speech titled “Global Outlook – Grains, Growth, Trade and Mother Nature.”

“We’ve been through a lot of volatility in the past. Some may recall the 1970s when we saw the doubling of prices. Then for 30 years we went at that price level. This was followed by a super cycle where the commodity prices really took off over the next decade. Today we’re just trying to figure out where these prices settle out.”

Barr is senior director for CoBank’s Knowledge Exchange Division, an information-and-knowledge-sharing initiative created in 2009. Previously, he served as chief economist for the National Council of Farmer Cooperatives in Washington, D.C., from 1985-2009. He also served as chair of the World Agricultural Outlook Board.

“Right now the biggest problem is commodity prices have done down with the larger supply, but input costs have not dropped as fast,” he explained. “The biggest challenge in ag right now is on the input side, going forward.”

People questioned Barr about the U.S. and how it might affect agriculture. “I think the U.S. economy will remain in pretty good shape with a strong consumer demand,” he answered, “which is good for the animal protein and dairy side, which in turn is good for the food growers.

“I am optimistic in the short term. We’ll see slowing growth, but I think it will be steady in the U.S.”

There was also concern about turmoil in the European region. “Europe will have problems, but that’s not a major market for the U.S. Our markets are Asia, Canada and Mexico, and we’re in a big trade dispute with all three of them. That creates a lot of uncertainty for our agriculture.

“When you’re in the commodity business and you’re looking for the new normal, it’s hard to find that new normal with all the stuff going on around the world. There’s a lot going on globally that will impact agricultural products for sure,” he said.

“As for China, I’m one who believes we’re going to get a working agreement and China will make some short-term buys, but I believe we’re going to have an ongoing debate with China in terms of enforcement. We’re going to go head-to-head with China the next two to three years. Just because we get an agreement with China doesn’t mean the turmoil on the trade side will go away.”

Barr pointed out the largest importer of U.S. wheat and rice is Mexico, while Japan is the top importer of U.S. corn. China is high in U.S. tree nut and soybean exports, while Turkey imports the most U.S. cotton.

According to Barr, between 2000-10 the U.S. saw 4.5 percent global growth. Now, he said, it has been at 3.5 percent annually since 2010.

“We’re still solid with demand, but we’re not growing our markets,” he explained. “One problem for ag is we’ve ramped up production in response to these higher prices, but now that demand has slowed down. We’re building supplies in excess of what we need.”

According to Barr, it’s a precarious time to be a wheat farmer. “There’s a lot of wheat being grown around the world. This is one market that is oversupplied at this point in time. In this country we’re producing the lowest acreage of wheat since the 1890s. I don’t think we’re going to produce that much going forward, as globally, we have a big supply of this crop.

“It’s not as burdensome with corn, though. We need to grow the export market of corn to keep up with expansion in ethanol use and corn for feed. In 2005, the U.S. had 56 percent of the export market in corn. Today we have just 32 percent. Russia (22 percent) and Brazil (14 percent) expanded their production. So the corn market will be competitive going forward,” he said.

With soybeans, Barr said the market remains strong, though China is starting to “ramp up their own production of soybeans.

“China is importing less soybeans than they did a year ago, so we’ll have to wait and see if this shift in the market materializes.”

He said the U.S. exports 20 percent of pork it produces – a good indicator. “We saw a 2.6 percent increase in exports in 2017 from the previous year, 3 percent by 2018 and we expect between 4-5 percent in 2019,” Barr noted. “The hog industry is expanding very rapidly.”

The Harvest Land gathering is biennial event, first meeting in 2017. The next meeting in Richmond will be in 2021.

“This is our third year of doing this,” said Lindsay Sankey, communications manager and event organizer. “We brainstorm to see what the hot topics are out there and then try to bring in the most dynamic, nationally known speakers for this one particular day.”