Agribusiness Trends,
Issues, and Challenges
Bert Greenwalt
Arkansas State University
and
Greenwalt Company, Hazen, AR
11-0...
Agribusiness Trends
• Technological Change & Industrialization
• Demand for Water - irrigation
• Globalization - world com...
Technology
• New technology is:
– increasing output
– substituting capital for labor
– generating economies of scale
Technology Applications
in Agriculture
–GPS navigation and positioning
–Precision Agriculture:
• Digital mapping - soil & ...
Technology Applications
in Agriculture
–Remote sensing
• Rainfall
• Soil moisture
• Grain storage conditions

–Remote cont...
Technology
• Farms are becoming larger and fewer
– acres/eyes ratio is increasing

• Precision agriculture technology
gene...
Technology
• New technology is increasing output and
substituting capital for labor
– High Tech Equipment
• Large, Fast, E...
GMO Technology
• Genetic engineering has created:
– Herbicide tolerant plants
• Roundup Ready, Liberty Link

– Insect resi...
GMO Technology
• Herbicide resistance problem
– Roundup Ready (1996) and other GMO
technology reduced the management &
lab...
Pressure on Water Resources
• Aquifer decline
– Alluvial Aquifer (shallow aquifer)
– Sparta Aquifer (deeper, used by citie...
Globalization
• Creates world market for commodity
producers
–Free trade moves production to
the low cost producer
–Does U...
Globalization & Industrialization
• Evolving consumer demand
–Global vs Local
–How and where food is produced
has value to...
• Market forces are driving Arkansas
farmers to diversify into new enterprises
– Arkansas farmers are adding new
commoditi...
• Market volatility has increased
• Output and input pricing & timing
more critical now
–increased demand for marketing
co...
Government Farm
Policy (Farm Bill)
• 1996 Farm Bill: Move to market
orientation and production flexibility
• 2013 Farm Bil...
Farmland Prices
• Income Capitalization:

Land Value =

Annual Net Income
---------------------------Interest Rate
Farmland Price Drivers
• Net Income from crop production
-- expected to be strong in short-run
-- long-run ?
• Interest ra...
Farm Management Team
• Intellectual capital in the farm business
is as critical as financial capital
• The next generation...
Arkansas State University
Agribusiness Conference
•
•
•
•

February 12, 2014, 8:30 AM - 4:00 PM
ASU Fowler & Convocation C...
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
Bert Greenwalt - Luncheon Speaker
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Bert Greenwalt - Luncheon Speaker

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UALR Institute for Economic Advancement 2013 Economic Forecast luncheon speaker.

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Bert Greenwalt - Luncheon Speaker

  1. 1. Agribusiness Trends, Issues, and Challenges Bert Greenwalt Arkansas State University and Greenwalt Company, Hazen, AR 11-05-13
  2. 2. Agribusiness Trends • Technological Change & Industrialization • Demand for Water - irrigation • Globalization - world commodity market • Evolving Consumer Demand and Perception of Agriculture • New Farm Bill • Increasing Farm Land Values
  3. 3. Technology • New technology is: – increasing output – substituting capital for labor – generating economies of scale
  4. 4. Technology Applications in Agriculture –GPS navigation and positioning –Precision Agriculture: • Digital mapping - soil & yield • Variable rate application – fertilizer, seed, pesticides
  5. 5. Technology Applications in Agriculture –Remote sensing • Rainfall • Soil moisture • Grain storage conditions –Remote control • Irrigation equipment • Grain drying equipment
  6. 6. Technology • Farms are becoming larger and fewer – acres/eyes ratio is increasing • Precision agriculture technology generates a large volume of data • Growing demand for consultants and advisors who can: – Provide more eyes – Help turn data into information
  7. 7. Technology • New technology is increasing output and substituting capital for labor – High Tech Equipment • Large, Fast, Expensive • The large capital investment must be spread over a large acreage • But timeliness of operations is critical –Excess capacity may not be excess
  8. 8. GMO Technology • Genetic engineering has created: – Herbicide tolerant plants • Roundup Ready, Liberty Link – Insect resistant plants – Plants with increased yield potential – Plants with nutritional and quality benefits
  9. 9. GMO Technology • Herbicide resistance problem – Roundup Ready (1996) and other GMO technology reduced the management & labor requirement for weed control – But poor management of the technology has allowed weeds to become resistant to Roundup herbicide – Now weed control costs are increasing
  10. 10. Pressure on Water Resources • Aquifer decline – Alluvial Aquifer (shallow aquifer) – Sparta Aquifer (deeper, used by cities) • Surface water alternative – Runoff recovery and storage reservoirs – Grand Prairie Project : White River supply
  11. 11. Globalization • Creates world market for commodity producers –Free trade moves production to the low cost producer –Does U.S. agriculture have a comparative advantage? In what? • CA affected by natural resources, labor, infrastructure, and regulation
  12. 12. Globalization & Industrialization • Evolving consumer demand –Global vs Local –How and where food is produced has value to some consumers Some now refer to commercial farming and agribusiness as “Big Agriculture” (not a compliment)
  13. 13. • Market forces are driving Arkansas farmers to diversify into new enterprises – Arkansas farmers are adding new commodities to their crop mix • corn, peanuts – New specialized niche crops & livestock • Sesame, food grade soybeans, Edamame • Antibiotic free chicken
  14. 14. • Market volatility has increased • Output and input pricing & timing more critical now –increased demand for marketing consultants and advisors
  15. 15. Government Farm Policy (Farm Bill) • 1996 Farm Bill: Move to market orientation and production flexibility • 2013 Farm Bill will reduce subsidies and lower the “safety net” • The negative impact will be greater in the Midsouth than in the Midwest
  16. 16. Farmland Prices • Income Capitalization: Land Value = Annual Net Income ---------------------------Interest Rate
  17. 17. Farmland Price Drivers • Net Income from crop production -- expected to be strong in short-run -- long-run ? • Interest rates -- expected to be low in short-run -- long-run ? • Income from government programs -- 2013 Farm Bill ??
  18. 18. Farm Management Team • Intellectual capital in the farm business is as critical as financial capital • The next generation of farm managers – Will face a higher bar – Must have a more sophisticated skill set
  19. 19. Arkansas State University Agribusiness Conference • • • • February 12, 2014, 8:30 AM - 4:00 PM ASU Fowler & Convocation Centers No registration fee Program in December at www.astate.edu/coat
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