An Urban's Rural View

Maybe it's an evolutionary defense mechanism, maybe just a quirk of human nature; but bad things make more of an impression on most human beings than good. People obsess over threats and failures. They take opportunities for granted and successes as their due. (https://www.psychologytoday.com/…)

I've noticed this at times discussing agricultural exports with farmers. Many are ambivalent. Exports are a good thing, yes, but they can feel frustratingly bad.

As sellers of commodities, most farmers are of course grateful for any additional source of demand. But it is indeed frustrating when other countries erect arbitrary barriers to American products in the name of health and food safety or when foreign buyers get away with placing and then cancelling orders to manipulate prices.

It's especially frustrating when Brazil and other foreign competitors take business away and U.S. ag exports decline, as has happened in recent years.

Some farmers have become as suspicious of the value of exports as they are of snake-oil salesmen. Here's an example. In response to my recent column warning that a big increase in U.S. tariffs would be met with retaliation that would hurt American agriculture (https://www.dtnpf.com/…), I received this email, quoted here word for word:

"There are people in this country that have no respect for the hard work and use of the natural resources it takes to grow these crops and prefer to send it to China for cheap and cheat farmers like they don't have a need for profit sick people in commodities markets there's will come."

The sender of this email is far from a minority of one in his trade skepticism. In 2006, when Republican Senator Jerry Moran of Kansas was a congressman, he said in a speech that farmers in his congressional district often told him, "Let's forget the rest of the world" and grow crops exclusively for domestic consumption. Moran said his comeback was, "What 40% of the acres in our state do we not want to farm?"

That's the nub of the problem. Exports may be frustrating, but American farmers and ranchers produce more than the domestic market can absorb. Like it or not, they depend on exports.

To be sure, not every farm state is as dependent on exports as Kansas was back when Moran spoke. Overall, USDA says the export share of U.S. farm production has been steady at about 20% since 2008. (https://www.ers.usda.gov/…) Even 20% is a lot, however, and for some crops, like soybeans, the percentage is higher.

In the end, it's probably best to resist the human tendency to emphasize the bad and just accept the additional source of demand for whatever it's worth. If it's any consolation, farmers today aren't nearly as dependent on exports as they would be if some of the country's founding fathers had gotten their way.

The 13 British colonies that formed the union were heavily dependent on exports of tobacco, wheat, rice, indigo, lumber and other agricultural products to the mother country. Their comparative economic advantage was expanses of land; they were short labor and capital. Some 85% to 90% of their citizens worked on farms. They imported the great majority of their manufactured goods.

Some of the founding fathers, led by Alexander Hamilton, wanted the U.S. to become a manufacturing power. They plumped for a strong federal government to build roads, canals and other infrastructure, a national bank to provide capital for industry and protective tariffs to nurture infant industries.

Other founding fathers, led by Thomas Jefferson, were content to import manufactured goods. They wanted the U.S. to be an "agrarian republic" -- a nation of virtuous farmers with a small federal government that left the economy alone. Jefferson made the Louisiana Purchase in part to discourage urbanization.

For many decades, agriculture versus manufacturing was one of the biggest political issues dividing the new nation. Had the Jeffersonians prevailed, the U.S. would still be importing most of its manufactured goods and using agricultural exports to pay for them. The percentage of ag production exported would be way above today's 20.

Though ag exports no longer play such a critical role in the economy, they still help. In 2022, U.S. exports of all products totaled $2.1 trillion; ag exports were $200 billion, or about 10% of the total.

Which isn't so bad, is it?

Urban Lehner can be reached at urbanize@gmail.com

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