Analyzing Agriculture: The American Backbone

By Ethan Bredemeyer (Rollo Insurance Account Executive in Franklin, TX)

Today we celebrate National Ag Day where we recognize the industry which sustains our society by providing us with the food, fuel, and fiber we need.  As Thomas Jefferson once said, “Agriculture is our wisest pursuit, because it will in the end contribute the most to real wealth, good morals, and happiness.”  Approximately 60 years ago, the American farmer fed about 25 people.  Today, each producer feeds over 165 people.  We have come a long way as an industry; however, each milestone comes with its own unique challenges.  As we acknowledge agriculture, let’s do an analysis of where we are now and what we have ahead of us. 

Strengths: 

American agriculture’s light still burns bright, contributing $3.8 trillion to the U.S. economy, supporting 34 million jobs, and accounting for 1% of the U.S. gross domestic product.  While several farming operations are large in scale, production agriculture still holds its grassroots values.  The industry consists of about 1.9 million farms, with 95% family operated.  Additionally, the American farmer is the best at producing more with less resources year in and year out.  Between technology innovations, research advances, and continuous farming improvements, yields across commodities continue to rise.  This mass production allows us to meet our country’s demands and assist in feeding the world.  Annually, about a fifth of US agricultural production is exported.  This reliable, safe, and volume of production gives each one of us the security that we will always have something on our plate and in our closet.

Weaknesses: 

While there is a lot to be proud of, there are several weaknesses.  Over the last decade, commodity prices have reached all-time volatility metrics.  This in tandem with ever-escalating production costs and variable weather patterns creates tight long-run profit margins for producers.  While government entities have established programs to provide a safety net for farms, bridging the gap between the farmer and those creating the programs is critical.  This financial stress and uncertainty the industry faces have resulted in farmers and ranchers being 3.5 times more likely to die by suicide than the general population.  The importance of risk management, business, and advocacy is evident that needs to continue to be a top priority.  

Opportunities: 

Will Rogers once said, “The farmer has to be an optimist, or he wouldn’t still be a farmer.”  Given some of the challenges, industry has many doors that have yet to be opened.  From a technological perspective, the use of drones, robotics, production system integration is just beginning.  These advances will continue to help agriculture be at the forefront of efficiency and productivity.  The recent progression and capabilities of ethanol and biodiesel have additionally created new opportunities for agriculture to directly impact other industries.  Additionally, with the average American now being over a generation away from production agriculture, the need for education is at an all-time high.  Teaching the general public what, how, and why farmers do what they do is an integral part of defining where the industry goes in the next decade. 

Threats: 

Due to urban sprawl, alternative energy installations, and other developmental projects, America is losing about 2,000 acres of farmland/ranchland daily.  This is also causing farms to shut down or sell to larger farms.  Given land is a non-renewable resource, this degradation threatens our long-term food supply and creates new environmental issues.  Additionally, with tight profit margins previously discussed, the barriers of new farmers wanting to enter the industry is becoming more difficult each year.  As the population continues to rise, we must ensure we don’t use up all our productive land before it’s too late. 

Summary: 

While quantities of farms are on a decline, the mission of feeding the world continues to be a mainstay for American agriculture.  Today, while we face many challenges, the ag industry is still viable and essential in our country’s sustainability.  The American farmer is still and will always be the backbone of our country.  Make sure to thank a farmer or rancher for everything they do for us.   

National Ag Day is a reminder of how vital agriculture is and how important it is to protect what you’ve built. The right insurance plan helps keep your operation running strong. If you’d like a personalized quote, contact Rollo Insurance today and let’s make sure you’re covered where it counts.