American Agriculture and the Economy

For generations, agriculture has served as the cornerstone of the American economy and has played a vital role in shaping the history of this country.

Since it’s humble beginnings in the original colonies, farming has changed over the years, growing from the small family farms to a multi-million-dollar business. In 1940, there were six million farms averaging about 165 acres each farm. As time progressed, farms became fewer but larger. In the 1990s, there were only 2.2 million farms in the U.S., but each averaged 470 acres of farmed land. Even though the number of farms decreased, technological advances now enable farmers to continue producing more food. This allows farmers not only to feed the U.S. but also feed the world.

“Agriculture is arguably the most important sector of the economy,” said John M. Antle, professor of Agricultural Economics at Montana State University.

In a world of economic uncertainty, agriculture continues to support the American financial markets. With the recent proposed bailout of several troubled corporations and the problems of Lehman brothers, AIG and Merrill Lynch, the dollar will likely weaken further, making U.S. products more attractive and likely leading to an increase in agricultural exports. Furthermore, the need to stabilize the tumultuous financial markets can only benefit the American consumers. Doing so would hopefully increase discretionary spending (dining out, purchasing of ethanol vehicles, etc.), which also will benefit the agricultural industry for years to come.

In 2007, farmers earned $86.8 billion. The U.S. Department of Agriculture predicts this number will rise to $95.7 billion by the end of 2008. Although quite a large number, farming contributes only 1 percent of the U.S. GDP. In Ohio alone, 75,700 farms contributed $1.95 billion to the state’s economy, making agriculture the largest industry in Ohio, which is one of only five states where over 44 percent or 14.3 million acres of land is used for farming.

As the nation frets over the current economic crisis, it remains to be seen how American farmers will be affected. And with a change in administration looming, how will the next president’s policies affect the U.S. farming industry? Let me know your thoughts.