A33-Lancaster Farming, Saturday, February 3, 1996
Positives Outweigh Negatives For Agricultural Economy Direction
VERNON ACHENBACH JR.
Lancaster Farming Staff
NORTH CORNWALL (Leba
non Co.) The positives out
weight- the negatives as far as
existing conditions for the outlook
of the agricultural economy.
That was the message of H.
Louis Moore, Penn State Universi
ty professor of agricultural eco
nomics. during his keynote
address at the Wednesday agricul
tural seminar sponsored by Leba
non Valley National Bank for its
agricultural trading customers, at
the Lebanon Area Fairgrounds.
Moore is k perennial speaker at
the spring educational forum
where LVNB provides its custom
ers a slate of speakers to address
timely topics of concern.
In his talk, Moore said that the
list of positive aspects in the eco
nomic environment includes the
rate of inflation at a low 2.6 per
cent; unemployment at a low 3.6
percent (compared to 23 percent in
Spain, 9 percent in Germany and
bom 30- to 40-percent or more in
other nations in Eastern Europe);
food prices and supplies are all
positive for the consumer (food
supplies good, prices low); thanks
to the maneuvering of federal
reserve chairman Alan Greenspan
the economy had the “soft land
ing” desired; and competitiveness
and exports are “booming.”
According to the professor, the
negative aspects are mostly related
to human misbehavior.
“The antics of Congress and the
president are all negative,” Moore
said about the obviously personal
politic motivated acts and grand
standing being done, such as
allowing the government to close
twice. “It shows how fragile gov
ernment is,” he said.
Also on Moore’s list of nega
tives is the fact that retail sales and
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Dennis Hess
(717) 354-8177
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Lititz, PA
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consumer credit are directly linked
and consumers appear to be slow
ing done on buying, as credit limits
are being reached.
“We do have a recession com
ing,” Moore said, “but when?”
He said it probably will come
after the presidential election,
unless something or somebody
else does something to hasten it.
Some problems with the her
alded trade agreements are surfac
ing and some producers are grous
ing about inequities not addressed,
such as Mexico’s not providing
usable pre-harvest crop
reporting —Florida tomato
growers have recently complained
about the onslaught of Mexican
tomatoes reducing prices to the
point that Floridians harvest at a
loss.
“But overall,” Moore said, “the
positives do outweigh the
negatives.”
Moore covered a variety of dif
ferent social and economic trends
and provided some data to support
an outlook that generally was opti
mistic for agriculture and the
United States.
He said that despite the attempts
of some to persuade consumers to
decry the benefits of agriculture
and meat consumption, per capita
meat consumption has been
increasing and despite the public
clamor for low-fat and fat-free pro
ducts, per capita fat consumption
has risen significantly.
Using a bar chart showing the
relative amounts of per capita con
sumption by type of fat, Moore
illustrated that while per capita
consumption fat from red meats
has decreased over the past
decade, the consumption of veget
able fats and butter has increased
to the point that the total amount of
dietary fat consumption has
increased.
ATTENTION
Clark Stauffer
(717) 733-8921
(717) 738-2328
Mobile 575-0622
According to Moore, per capita
meat consumption was about 200
pounds per person per year in
1990; it was estimated at about 216
pounds or more. The most increase
in meat consumption has been with
poultry, and that is worldwide, he
said. The United States produces
about 33 percent of the world’s
poultry and demand is increasing.
Moore said China and many coun
tries are increasing demand for
poultry.
Further, he said that in areas
such as in some of the nations of
the former Soviet Union, the
demand is for the dark meat of
poultry, which is actually not
much in demand domestically, and
there are large markets for other
parts of poultry that enjoy limited
domestic demand.
(As an aside illustrating the
increasing use of poultry, accord
ing to published report this week,
Campbell’s Soup is increasing the
amount of chicken in its soup
offering.)
He said that the trend of the past
20 years for the demand for
beef to decline slightly, pork to
remain stable and poultry to
increase should continue, if not
increase.
Last year United State agricul
tural exports were estimated at $53
billion, though a late fourth quarter
surge will probably correct that
figure higher to $54 billion or
more, Moore said.
He predicted that agricultural
exports should grow by at least
$1.5 billion this year.
The world population is conti
nuing to boom, mostly in underde
veloped countries, and the demand
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for meats' and grains shduld
increase.
Moore said that in 1950, there
were two “cities” with populations
of more than 10 million people
the New York metropolis and
London.
In 1994, there were 14 cities
with populations of more than 10
million people and only four were
in industrially developed nations.
It is projected that by 2015,
there will be 27 cities with popula
tions greater of 10 million, five in
the developed nations. The popu
lation in those 27 cities will equal
about half the world population in
1950.
Land values and farmland val
ues are increasing, by about 6.4
percent in 1994, with a project
increase of 5 to 8 percent for 1996,
Moore said. He said he interpreted
the increase in value to demons
trate the increasing awareness of
the production value of farmland
and its tighter supplies.
He said he sees more freedom in
the marketplace and less
government
While the percentage of retail
food price returned to the farmer
has decreased from 22 percent in
1993, to 21 percent today, Moore
cautioned that he did not see that
statistic as a useful measure of
farminjg profit but rather a reflec
tion of the amount of “value
added” processing and the wider
variety of use of farm
commodities.
He said that while grains, such
as com, are in strong demand and
tight supply, production has been
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steadily increasing for the past 65
years and he said he expects no
change.
However, he did say that
demand should increase and that
supplies of com should continue to
tighten. He said there is not enough
carryover to keep prices stable. In
order to have some national car
ryover of corn, he said the industry
needs to reduce its use.
As far as conditions for grains
for 1996, he said com carryover is
expected to be 7.4 percent of what
is used; there should be no drop in
feed use of com during the first
quarter despite its $3,50 per bushel
price; an 18-percent reduction in
feed use would create carryover;
the increasing cost per bushel may
reduce demand somewhat; there is
no Farm Bill to guide planting and
acreage should be up; but the seed
for the best com varieties are
almost gone as planting is
expected to be about 18 percent
above 1995.
For livestock producers, he said
to expect to see low prices for a
few years, but for that to change in
about three to four years.
Overall, Moore said he sees a
strong national economy, though
not explosive, grain production
and prices to rise, livestock pro
duction to rise and prices to fall,
and exporting to help all segments.
He said the nation’s agricultural
trade balance is surplus and of the
imports we get, most are commod
ities that can’t be grown well here.
Moore said the United States
would be in great shape, “If the rest
of the economy was as strong as
agriculture.*’
Lancaster County 4-If
10th Annual
Benefit Auction
Sat., Feb. 17, 1996
9:30 a.m.
Location: Farm and Home center,
1383 Arcadia Road: Just off of Rt. 72.
Lancaster. PA
12:00 Noon • KINROSS • 12:00 Noon
White Oak Mills, Engle Business Eqpmt,
Chemgro, Messicks Farm Eqpmt, Rohrer
Seeds, Goods Furniture, R.S. Mollinger &
Sons, Lane. Glass & Paint Co., Carlos R.
Leffler, tlershey Equipment
12:30 p.m.*SPECIALTY HEMS* 12:30 p.m.
Quilts, Quillow, Wall hangings, hand
craft items, sports items
1:00 p.m.’GIFT CERTIFICATES* 1:00 p.m.
3-10 Wheelers Crushed Stone, 1 Might
Lodging Willow valley. Tickets to "Moah"
Sight & Sound, The Framery, Fulton Opera
House, Semen From Atlantic Breeders, 8
Ton Top Soil, Rainbow Dinner Theater,
Dutch Apple Dinner Theater, HflfH Tack
Shop, Lancaster Ice Rink, Landyshade
Mulch, Millcreek Coal Co., Fowl's Feed Ser
vice, Gap Family Diner, George's Restau
rant, Isaacs, Lone Star Steakhouse, Chuck
E. Cheese, Moss's, Country Table Restau
rant, Millers Smorgasboard, Olive Garden,
Framing Concept, Lebzelter's, Clearview
Bowling Lanes, Golden Wall, and more.
• MISCELLANEOUS •
Animal Cages, Wenger's & Betty Qroff
Cookbooks, Misc. Ertl Toys and Banks,
Large Dog Box, Dutch Gold Money Gift Set,
Mailbox, Grooming Kits, Morse Items, Wall
Partitions, Toy Tractors, Potting Soil, Toys,
Eldreth Pottery, Barbeque Utensils,
Umbrellas, Hats, Homemade Crafts,
Plants, Water Jug, Ham Loaf, Cereal,
Apples, Candy, and much, much morel I
Many other Items still coming ini
Plenty of Good Food.
Auctioneers:
Alvin Miller AU000694L
Mike Miller
Jay Garber
Amos Sensenlg