Cost of American ag [Continued from Page A3B) that I cannot see how we could lose our advantage in agriculture as long as our policies allow the price of this resource to adjust. The adjustment is now taking pjace, and it’s the source of much of the financial distress in the farm sector.” Case for the U.S. Advantage JUST HOW MUCH BUILDING CAN YOU BUY? , m m 3586 Centennial Rd., Hanover, Pa. 17331 YOUR LOCAL INDEPENDENT DEALER The answer is more than you may expect. Consider this a Chief metal building gives you the strength and durability of steel It goes up fast. It gives you maximum space and flexibility And offers maximum energy efficiency Yet, it costs much, much less than comparable conventional construction. And aChief metal building will also save you substantial energy costs. Whether you plan to use gas, electricity or fuel oil Chief buildings give you maximum square footage for the money Every design is computer checked for strength. And modular planning gives you the building you want, without penalty. ■ We use only the finest materials Steel that’s electro-coated tor corrosion resistance Panels Ultra-Koted for the ultimate exterior finish... warranted for 20 years And heavy duty insulation throughout to keep energy costs down Find out just how much more building you can buy when you buy Chief We ll be glad to tell you. CHIEFS • 26 ga Galvalume Roof (20 yr warranty) with Stainless Steel Fasteners • 26 ga Sidewalls in color matched Wall Fasteners • 1/12 Roof Pitch • Straight Sidewalls Please tell me more as to how I can have a strong, solid steel building j NAME ! ADDRESS CITY COUNTY Please have a salesperson call 1 Ido not wish to see a salesperson ; 1 One way to measure absolute advantage is to compare production costs among nations, according to the economists. They point out that this is a difficult undertaking. Even within the Uru.ed States, costs of production for individual commodities range widely from region to region and farmer to farmer. In addition, mm mm ASK AG ENTERPRISES INC. 717-637-2214 * Price Includes: • 3x7 Metal Personnel Door • 14x14 Overhead Door • Clear Span - All Steel • 30# Live Load • Freight and Applicable Tax Delivered to Site STATE PHONE Example-' products in line with competition there are measurement problems and conceptual issues of how to figure costs. These difficulties are multiplied enormously when trying to obtain comparable in formation for other nations. Despite the problems, Economic Research Service economists were able to develop some data to compare average U.S. costs of production with those of other major exporters for 1980-82. They used variable costs, which do not include depreciation, labor, and land costs. They found, for instance, that the U.S. Northern Plains and Saskatchewan, Canada, had virtually identical average variable production costs for wheat. Average 1980-82 costs were $1.29 per bushel in the U.S. Nor thern Plains and $1.28 (U.S. dollars) in Saskatchewan. Data for Australia show a national average variable wheat cost of $2.06 for 1980-82, considerably above the U.S. national average of $1.56. “Thus,” they conclude, “neither of our major wheat competitors appears to have a significant cost of production advantage.” Soybean cost comparisons yielded similar results. In the Com Belt and Great Lakes states, average variable costs for soybeans were $1.46 per bushel in 1980-82, well below the estimated $1.84 cost for southeastern Brazil and the $1.73 cost calculated for Pergamino, Argentina’s major com and soybean growing region. For com, the Pergamino region had an average variable cost which averaged 87 cents per bushel over the 1980-82 period. The average for the Com Belt-Lake states was higher, at $1.13 per bushel, but the difference between the U.S. cost and the Argentine I SADDLE UP! To Batter Equipment... Find It In Lancaster Farming's CLASSIFIEDS! Large Quantities .of Sawdust' Available 10 cents per cubic foot loaded on your truck KONDOR LUMBER CO. York, PA 717-755-6841 KEN CLUGSTON VERNON SEIBEL, 665-6775 665-2782 CRAFT-BILT CONSTRUCTION INC. FARM-HOME BUILDING R.DJ2 MANHEIM, PA. PH: 665-4372 BUILDINGS REMODELING FOR DAIRY RESIDENTAL SWINE POLE BUILDINGS BEEF STORAGE Lancaster Farming, Saturday, January 4,1986-A39 U.S. Costs of Production Compsrs Favorsbly with Costs of Our Major Competitors Average variable production costs m U S dollars par bushel 1900 92 average SoybMnt Com *i« $1 *7 n *!•<., 73 - p- . _ SI 46 $1 29 SI 2fl ~*n “ —, ’Liz si 22 ililsiia — M#7 — •mJ—U I i I U-1-I-I—U-J-M Lj.J-i I—L-. n_ . Northern Plain* Com Mi Canada Laha aiatat (Saskatchewan) US average Sample farm ihai appears loMt national aver apt cost had dropped to just 8 cents by 1982. Little is known about changes in costs abroad since 1982, except that the subsequent rise in the foreign exchange value of the dollar has probably increased U.S. costs relative to those of our major competitors. A stronger dollar has that effect even without any change in actual production costs within the United States. Case for a Comparative Advantage The cost of production com parisons argue that the United States has retained its status as a low-cost producer of grains and oilseeds-certainly in its primary growing regions. Comparative advantage, rather than absolute advantage, however, may be more important in determining actual production and trade relation ships. During the 1970-82 period, it appears that U.S. agriculture widened its comparative ad vantage compared with other sectors of the American economy and with the rest of the world, say the economists. The productivity of inputs employed in agriculture grew faster here than abroad, while the productivity of inputs employed in other areas of the U.S. economy grew more slowly. They cite several examples. Average productivity of U.S. farmland, for example, increased 39 percent, versus 27 percent overall in the rest of the world. The average productivity of U.S. agricultural labor rose 97 percent, compared with a 22-percent in crease in other countries. The average product per unit of machinery increased here but fell in the rest of the world. These productivity gains in Australia* Com Ml I Argentina Lake stale* | (Peryamlno) U S Bripl average (Southeast) agriculture outpaced those in other sectors of the U.S. economy. Compared with the 97-percent gain in agricultural labor productivity, the productivity of nonagricultural U.S. labor rose only about 15 percent. Nonagricultural labor productivity growth in Japan, Europe, and Australia was well above the U.S. rate. In other words, say the economists, the evidence suggests that U.S. agriculture’s com parative advantage over other sectors of the economy increased relative to the rest of the world during that period. None of this, of course, changes the fact that U.S. agricultural exports are severely depressed. Export earnings have tumbled from a record $43.8 billion in fiscal 1981 to an estimated $32.0 billion in fiscal 1985. Volume has dropped more than 30 million metric tons since 1981. But these findings may help answer another question: Has the time come for the United States to throw in the towel and admit that it no longer has an agricultural sector capable of competing in the world arena? Not at all, say the economists. “The adjustments presently occurring U.S. agriculture-lower incomes, slumping land values, and losses in export market shares-are not the result of the inability of the United States to compete on a cost basis with other nations. Rather, the adjustments reflect a decline in the prices and volumes of agricultural com modity exports stemming from the appreciation of the dollar, U.S. and foreign policies, the global slowdown, and debt problems in many major importing countries.” Public Auction Register JANUARY SAT. JAN. 11 -11 AM Pednctown Rd., Farm Eq. for Mr. Michael Swedesboro, NJ Ralph D. RedKoles. High Hill & Hughes. Auct. CONSIGNMENT AUCTION AT TEITSWORTH SALE LOT, GROVELAND JANUARY 11 at 10:00 A.M. S''ling a great variety of equipment and supplies including 8 Farm tractors, 2 tractor backhoes, 1 small bulldozer, a short line of Farm equipment, snow plows & buckets. 70 ft. Patz chain feeder, (2) 4x4 pickup trucks, a large quantity of rough sawn and plained lumber, some good hay, plus much, much more. Consignment welcome Call for details Roy Teitsworth, Inc. Auctioneers Geneseo, N.Y. 716-243 1563 A Happy and Prosperous New Year to each of our friends and customers. We appreciate your continued support, look forward to another good year of Auction business. Com Ml I take staiM { U S ArfUfitin* aworuf* (Aeryarntno
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