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Income, not population, drives agriculture

An ag economist says rising world incomes are going to drive future demand for agricultural products.

Dr. Allen Gray with Purdue University tells Brownfield while the future for agriculture is positive, it will include more volatility based on changing incomes.  “Agriculture has to prepare for the fact that because we’re driven more by income around the world now than population like we used to be, we have to be prepared for ups and down cycles in the market that are maybe more ups and downs than we’ve been used to in the past.”

Gray says for farmers to remain successful, they need to be better prepared to manage operating and financial risks.  “Operating risk comes from things like milk prices, feed prices and things that are part of the day to day operations of the business.”  He says, “Financial risk comes from things like borrowed money, interests rates and how we manage the balance sheet on the farm.”

He says productivity will also become increasingly important moving forward.

Gray spoke with Brownfield during the Professional Dairy Producers of Wisconsin’s Business Conference.

AUDIO: Interview with Dr. Allen Gray