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Dick Crowder — Agriculture Facts

September 12, 2019


ROB MCCLENDON: WELL WE OFTEN TALK HERE ABOUT
GLOBALIZATION AND THE IMPACT IT HAS ON OUR ECONOMY, AND NO WHERE IS THE IMPACT MORE ACUTE
THAN IN AGRICULTURE; AND FRANKLY, THE NEWS COULD NOT BE MUCH BETTER. HERE’S WHAT WE
KNOW, FROM TODAY FORWARD, AGRICULTURE IS GOING TO BE A GROWTH INDUSTRY, THANKS IN GREAT PART
TO GLOBALIZATION AND THE GROWTH OF OTHER ECONOMIES AROUND THE WORLD.
IF YOU WILL, TAKE A LOOK AT THIS WITH ME; NOW, CURRENTLY INCOME DISTRIBUTION AROUND
THE WORLD LOOKS LIKE THIS. NOW, MOST OF THE WORLD’S INCOME IS CENTERED HERE IN THE U
S AND IN EUROPE. NOW, CHINA AND INDIA, DESPITE THEIR LARGE POPULATION, THEY STILL ONLY ACCOUNT
FOR JUST 15% OF GLOBAL INCOME DISTRIBUTION; WITH THE REST OF THE WORLD MAKING UP THIS
38%. BUT LOOK WHAT HAPPENS IN LESS THAN 40 YEARS,
WORLD INCOME DISTRIBUTION SHIFTS FROM BEING LARGELY LOCATED HERE IN THE WEST, TO ASIA.
CHINA AND INDIA, WILL IN THE YEAR 2050, COMPRISE 40% OF ALL GLOBAL INCOME, OTHER DEVELOPING
COUNTRIES WILL MAKE UP ANOTHER 40%, AND THE U S AND EUROPE’S SHARE DROPS TO JUST 20%,
WHICH IS GOOD NEWS FOR OUR NATION’S FARMERS, AND HERE IS WHY.
AS GLOBAL INCOMES RISE AROUND THE WORLD, SO DOES FOOD COSUMPTION. ENTIRE POPULATIONS THAT
ONCE ATE ON A SUBSISTENCE DIET, WILL NOW BE DEMANDING MORE MEAT, MORE DAIRY, MORE FRUITS
AND VEGTABLES, AND MORE PROCESSED AND PACKAGED FOODS; AND THIS TRANSLATES INTO A TREMENDOUS
OPPORTUNITY FOR AMERICAN AGRICULTURE. EARLIER I VISITED WITH DICK CROWDER, A PROFESSOR
OF INTERNATIONAL TRADE, AT THIS YEAR’S RURAL ECONOMIC OUTLOOK CONFERENCE AT OKLAHOMA STATE
UNIVERSITY. WELL DR CROWDER, STEVE JOBS IS OFTEN QUOTED
AS SAYING WE ARE ONE WORLD NOW. IN TERMS OF AMERICAN INDUSTRY, AND IN PARTICULAR OUR AGRICULTURE
INDUSTRY, WHAT DOES THAT MEAN FOR US? DICK CROWDER: IT MEANS THAT WE ARE ALL INTER-DEPENDENT
IN A NUMBER OF WAYS. IT MEANS WE’RE BECOMING MORE INTER-DEPENDENT IN TERMS OF CULTURE;
I MEAN, MORE INTER-DEPENDENT IN TERMS OF ECONOMIES, FINANCE, MOVEMENT OF PRODUCT, FOOD SAFETY,
FOOD SECURITY AS WE RELATE BACK TO AGRICULTURE. SO, AND IT’S GROWING, AND IT’S GONNA BECOME
MORE IMPORTANT IN THE FUTURE AS ECONOMIES BECOME MORE INTER-LINKED; FOOD CONSUMPTION
GROWS AND FOOD SUPPLIES HAVE TO BE MOVED MORE AROUND THE WORLD TO MEET THE DEMAND.
ROB: AND THIS DEMAND IS ALSO RELATING TO A GROWING GLOBAL DEMAND, JUST, NOT ONLY BY THEIR
PEOPLE, BUT BY THEIR WANTS. CROWDER: IT’S A GLOBAL DEMAND, BUT PRIMARILY
OUTSIDE OF THE U S. THE GROWTH IN WORLD DEMAND, 96% OF THE POPULATION GROWTH BETWEEN 2010
AND 2050 IS GONNA BE OUTSIDE THE U S. IT’S NOT ONLY RELATED TO THEIR WANTS AND NEEDS,
BUT IT’S ALSO RELATED TO THE ABILITY TO PAY IN THESE DEVELOPED, LESS-DEVELOPED COUNTRIES.
THE ABILITY TO PAY IS GROWING; THE CHINESE ECONOMY IS GROWING. PEOPLE SAY IT’S SLOWED
UP NOW, OKAY, WELL, IT’S SLOWED UP TO 7, 8%; WHAT IF WE HAD 7 TO 8%? WHAT, SO, IT’S
STILL GROWING AND INDIA, IT’S THE SAME WAY. I READ JUST THIS MORNING THAT THE WAGES IN
CHINA IN THE LAST 3 YEARS HAVE AVERAGED 19% INCREASE; UN SO, IT’S UH, THE ABILITY TO
PAY IS THERE, THE WANT AND THE NEEDS HAVE ALWAYS BEEN THERE, BUT THE ABILITY TO PAY
AND BUY THIS FOOD IS INCREASING DRAMATICALLY. ROB: SO I GUESS THE $64,000 QUESTION IS, CAN
AMERICAN AGRICULTURE PRODUCTION KEEP UP WITH GLOBAL DEMAND?
CROWDER: WELL IT’S NOT A QUESTION ONLY ABOUT AMERICAN AGRICULTURE; AMERICA, NO, WE CAN
NOT SUPPLY IT OURSELVES. WE’VE SEEN IT ALREADY IN TERMS OF THE DEMAND FOR AMERICAN AGRICULTURE,
LAST YEAR IN THE WORLD, EXPORTS OF CORN WAS LESS THAN WE USED TO HAVE. BRAZIL HAS INCREASED
THEIR SHARE OF SOYBEANS; WE CAN’T DO IT OURSELVES, THIS IS A GLOBAL DEMAND ISSUE AND
IT WILL HAVE TO BE A GLOBAL SUPPLY SOLUTION. WHAT WE IN AMERICA HAVE TO BE CAREFUL OF IS
THAT WE STAY, AND KEEP OUR COMPETITIVE LEAD, AND DON’T BECOME A RESIDUAL SUPPLIER, RATHER
THAN A PRIMARY SUPPLIER. ROB: SO IN THIS MORE GLOBALLY COMPETITIVE
INDUSTRY, CAN AMERICAN FARMERS BE PROFITABLE IF THEY’RE NOT EXPORTING THEIR PRODUCT.
CROWDER: NO, THEY CAN NOT; THE ONLY WAY WE CAN PROFITABLY GROW U S AGRICULTURE IS TO
INCREASE EXPORTS AND THE MARKET’S GONNA BE THERE FOR US, WE JUST HAVE TO STAY CONSISTENT
WITH WHAT THE CUSTOMER NEEDS AND WHAT WE PRODUCE AND HOW WE PRODUCE IT AND WE NEED TO BE COMPETITIVE
IN OTHER WAYS ALSO. ROB: YEAH, AND THERE ARE DIFFERING TASTES
AS WE LOOK AT MARKETS ACROSS THE WORLD, ARE THERE NOT?
CROWDER: DEFINITELY, BUT THAT’S A GREAT THING ABOUT TRADE; A BROILER, A CHICKEN, SOME
PARTS OF THE WORLD WANT DARK MEAT, SOME PARTS WANT WHITE MEAT, YOU CUT IT UP AND YOU CREATE
VALUE ADDED AND YOU CREATE MORE VALUE IN THE PRODUCT FOR BOTH WAYS. SEASONLY SOME PEOPLE
WANT DIFFERENT ITEMS IN DIFFERENT PARTS OF THE WORLD. SOME PEOPLE LIKE, PREFER CERTAIN
BEEF CUTS; SO, YOU DON’T HAVE A RESIDUAL SUPPLY OF INDIVIDUAL CUSTS LEFTOVER TO DRAG
ON THE MARKET. SO, THE UH, GLOBALLY, UH, A GLOBAL MARKET IS JUST A GREAT MARKET TO DEAL
IN; NOW, IT HAS ITS RISK, IT HAS ITS POLICY ISSUES AND SO FORTH, UH, BUT IT’S A MARKET
THAT’S BEEN QUITE GOOD TO THE U S. ROB: AND LET’S TALK A LITTLE BIT MORE ABOUT
THOSE RISKS; WE KNOW THAT THERE’S A LOT OF OPPORTUNITY, BUT THERE ARE SOME RISKS INVOLVED,
WHAT ARE THEY? CROWDER: WELL, OBVIOUSLY THERE’S THE TYPICAL
TRADE RISKS IN TERMS OF CREDIT, FINANCING, AND SO FORTH, BUT THAT’S NOT WHAT I’M
TALKING ABOUT HERE. I’M TALKING ABOUT DISCRETE GOVERNMENT POLICIES WHERE YOU UH, WHERE THERE
ARE EXPORT BANDS OR THERE ARE IMPORT BANDS OR THAT TIT-FOR-TAT TARRIF ISSUES. FOR EXAMPLE,
WE TALKED IN THE GENERAL SESSION THIS MORNING ABOUT, WE PUT A TARIFF ON CHINESE TIRES, UH,
THEY PUT A TARIFF ON OUR CHICKENS; SO, WHEN YOU DO SOMETHING LIKE THAT, YOU AFFECT THE
DEMAND AND MOVEMENT OF CHICKEN AND IT HAS AN IMPACT BACK HERE. THE WE, IN AGRICULTURE,
ARE IN THE MIDDLE OF GLOBAL POLITICS, WE’RE IN THE MIDDLE OF GLOBAL TRADE ISSUES, BUT
WE NEED, UH, WE’RE GONNA HAVE TO STAY THERE AND WE CAN STAY THERE AND WE CAN LEARN TO
MANAGE THOSE RISKS. ROB: NOW, YOU HAVE BEEN IN THE MIDDLE OF U
S TRADE FOR DECADES NOW, WHAT WOULD YOU TELL A YOUNG DICK CROWDER HEADING OFF TO SCHOOL
NOW ABOUT WHAT HE SHOULD STUDY AND WHAT HE SHOULD BE THINKING ABOUT AS WE MOVE OVER THE
NEXT 50 YEARS? CROWDER: WELL, THE LAST THING I WOULD SAY
ABOUT WHAT I WOULD TELL A YOUNG DICK CROWDER THAT’S COMING THROUGH, UH, IS A PLAY OFF
ON THE BUBBA WATSON QUOTE AFTER HE WON A MATCH WHICH SAYS, I NEVER DREAMED THAT BIG, IS THAT
YOU CAN NEVER DREAM TOO BIG ABOUT WHAT THE OPPORTUNITIES ARE IN FOOD AND AGRICULTURE
GLOBALLY OVER THE NEXT 20, 10, 15, 40 YEARS, HOW EVER LONG YOU WANT TO LOOK AT. JUST DON’T
WORRY ABOUT DREAMING BIG, JUST DREAM BIG. ROB: ALRIGHT, THANK YOU SO MUCH, DICK CROWDER.

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