130 – How No Economic Growth Affects Agriculture

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Have machines replaced humans in driving the economy?  Lots of people are not happy with their economic situation.  What is really driving our economy and how is it affecting agriculture???

Rising prices for lots of basic necessities, but no inflation according to government statistics.

Low pay for lower economic jobs seems to be where all the job growth is.  Bar tenders and waitresses instead of manufacturing jobs. 640px-Vineyards_(1)

Lots of competition for the jobs that are out there.  “Fast food” economy?

Farm and Ranch Implications

Machines are taking over lots of agricultural jobs.  Big is getting bigger, faster, more efficient.

Self driving tractors?

Separation in the value of easy to farm ground versus hard to farm ground?

Grain farming needs less labor than it used to.  Dairy farming is going to robotic milkers.  Now you have grape harvesting machines.

High financial requirements

2 roads ag is going down.  One is big getting bigger and the other is direct marketing, labor intensive, giving a select group of consumers exactly what they want in food production.  Paid just to do it a certain way.

Are large farms bypassing traditional infrastructure in agriculture???  Big issue for agricultural support industries.

Direct marketing farms need a different kind of infrastructure.

GDP growth has not been above 3% during Obama’s entire term, first President to not have at least 1 year of 3% plus growth.  Is this partly because we are switching over to a machine/digital industrial model?????

World is also adding lots of debt to keep growth, but is this wise?  Sometimes it has to go down to go up.  But, politicians are always worried about negative economic growth.

Eventually will the people lose faith in the system?

Trump and Sanders voters as a whole are not happy with the way the establishment is heading the economics of this country.

Since 1980 debt has grown 14 times, but productivity growth has only gone up 6.2 times.  Lower interest rates have allowed us to service this tremendous growth in debt.  Government is really scared of massive deflation.  Wars are generally inflationary.  Pay off current debt with cheaper future money with inflation.  Many say it is easier to start a war than it is to forgive debt’

Maybe what we need is a massive debt forgiveness.  Just cancel all the debt.

Easy money equals asset bubbles.  Land prices are partially a result of no place else to get a return on your money, and a somewhat safe place to keep it.  Negative interest rates will affect the rate of return and the cash rent to land value ratio.

Fewer people control more of the wealth world wide.  Central banks and governments moving the economy not private interests.  Crony capitalism????  Going on worldwide.  Is the Brexit vote a breathe of fresh air.

I then at the end I try to pull this all together and see what this really means for agriculture.  Whether commercial production agriculture or community supported agriculture I think how the economy goes will really impact agriculture. I see several possible end results but in the end it may not end well.

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