Iowa Public Television


Farm Income Number Boosts Rural Economy

posted on December 19, 2003

Hello, I'm Mark Pearson.

There were more signs this week that the American economy is getting stronger.

The nation's unemployment rate fell to 5.9 percent in November as the economy added jobs for the fourth consecutive month.

Industrial production rose by nine-tenths of a percent last month -- its strongest performance since 1999 and an indication that the worst may be over for the beleaguered manufacturing sector.

And, just in time for the holidays, the Consumer Price Index, a closely watched measure of inflation, fell sharply in November.

Since consumer spending accounts for two-thirds of American economic activity, lower prices will only fuel an already hot domestic economy that grew by a scorching 8.2 percent in the third quarter of this year.

Just about any way you measure it, the American economy continues to improve. But unlike past recoveries when rural America watched from the sidelines, this time, the nation's farmers and ranchers also are reaping rewards.


Farm Income Number Boosts Rural Economy

The farm sector is becoming a significant source of strength for the U.S. economy. After a five year recession, net farm income in the Great Plains, where the economy is heavily dependent on agriculture, jumped 58 percent over the past 12 months to 55.8 billion dollars according to the USDA.

Prices are climbing as world grain supplies are the tightest since the 1970s, and the U.S. cattle population is the lowest since 1982.

Meanwhile, demand for farm commodities is strengthening. China's purchase of soybeans and cotton helped lift U.S. agricultural exports to 6 billion dollars in October. Production of corn-based ethanol is taking more from the grain stream as production reaches 2.75 billion gallons. And, in grocery stores, American consumers are willing to pay more for beef and eggs, in part, because of the popular high-protein diets.

But the Farm Belt continues to have problems including the declining population and challenges to U.S. export markets by increased production in Brazil and Russia, it appears that everyone from Montana ranchers to Texas cotton farmers are making more money.

Some farm economists predict the situation will continue in 2004.


Tags: agriculture economy news rural