Special Report

An increase in effective demand

While farmers are looking at tighter margins in 2015, an ag economist says the long-term future of the agriculture industry is bright.  Mike Boehlje with Purdue’s Center for Commercial Agriculture says agriculture is a growth industry.

But, he adds, not for obvious reasons.  “It’s not because we have more mouths to feed,” he says.  “That’s kind of a misunderstanding. A lot of people says we’ve got 9 billion mouths to feed by 2050 – it’s a growth industry.   Nine billion people with no money is a problem, not an opportunity.”

He tells Brownfield it has more to do with growing incomes in the rest of the world.  “And particularly those people in the world that have relatively low income that want to improve their diets as they get just a little bit more money,” he says.  “After they buy their tv set and their cell phone.  They want to eat something other than rice and vegetables.  They want to eat animal protein.”

Boehlje calls it an increase in “effective demand”.

And in countries like China, where incomes have been growing between 5 and 7 percent each year, they’re now able purchase animal proteins at least once a week and sometimes more.