An Urban's Rural View

And thus does another year slip-slide into history. For agriculture, it was a year of changes, a year when corn sagged and cattle soared, when oil tanked but fertilizer barely dipped, when Congress confronted farmers with confusing new choices and the transportation system dealt them difficult new dilemmas.

Year's end is a time for reflection, so it's worth asking: How will folks in the future look at the changes 2014 wrought? Measured against the long arc of time, will they seem major or minor? The passage of time has a way of making speculation on questions like these look silly, but it's still fun to speculate. So let our great-great-great grandchildren laugh.

When economists think about change, they distinguish between the cyclical (short-term ups and downs in prices or economic output) and the secular (longer-term alterations in supply or demand). Looked at that way, the changes in the 2014 agricultural economy -- even the dramatic reversal of fortunes between crop growers and livestock raisers -- seem like cyclical twitches in a secular swing that's still playing out: the ethanol eruption.

By this logic the secular turning point took place in 2007, when Congress created the Renewable Fuels Standard. The RFS didn't just boost short-term demand for corn; it nudged the whole demand curve higher.

Will 2014 come to be seen as the high point in that secular process? The EPA, the Congress or both might provide answers to that question in 2015. But even if corn-ethanol demand has reached a plateau, the effects of that secular change seem unlikely to be undone any time soon.

Some paleontologists hold to a theory of change known as punctuated equilibrium. Nature, by this theory, doesn't evolve bit by tiny bit. It goes instead through periods of "stasis" -- no change -- "punctuated" by occasional bursts of major change, when some species adapt and are transformed while others go extinct. Huge shocks to the system (think: meteor strikes) stimulate these bursts.

Viewed through the prism of punctuated equilibrium, 2014 was a year of stasis. The shocks, like Russia's annexation of Crimea, were more like comets than meteors. Paleontology and economics, then, lead to similar conclusions.

Some historians, to be sure, say eensy-weensy events can ignite cataclysmic changes. This is the "for want of a nail, the shoe was lost, for want of a shoe the horse was lost" school of thought. It raises the possibility that 2014 could yet turn out to have been a year that introduced lasting change, change triggered by some barely noticeable blip on the radar screen.

If that happens -- if as a consequence of 2014 the kingdom is lost -- we won't have to wait for our great-great-great grandchildren to look silly. We'll soon have to have a good laugh at ourselves, bamboozled as we were by history's knack for playing tricks.

Odds are, though, that 2014 was a year of minor change. If it turns out it wasn't, no year-end adjustment, no New Year's Resolution, will make any difference. For practical purposes, we can only adapt to shocks that register. We can only react to what we can know.

Here's hoping the year's changes were good ones for you. Here's hoping 2015 brings even better ones.

Urban Lehner

urbanity@hotmail.com

(CZ)

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