Rising commodity prices may be stoking inflation worries abroad and starting to pinch U.S. consumers at the grocery store, but for farmers strolling the grounds of the world’s largest farm equipment show the good times are rolling.
People good-naturedly jostled to be the first to test drive John Deere’s new skid loader at the World Ag Expo, a 60-acre stretch of dusty earth and buffed machinery. They smiled as they flocked to place orders for new combines, cotton balers and top-of-the-line tractors.
They crowded around Case IH’s bright red Steiger Quadtrac tractor, its “luxury package” decked out with heated leather seats, a cellphone charging station and a place to plug in an iPod. As they flagged down dealers, farmers barely seemed to blink at the price tag: $575,000.
“When times are good, you have to invest in your operation,” said Harlan Reese, 52, a wheat and corn farmer from Illinois. “It’s expensive to farm right now. But times are still good.”
Indeed, agriculture has been touted by both the White House and Congress as one of the economy’s few bright spots. Commodity prices are soaring to historic highs and farm exports are booming.
The U.S. Department of Agriculture has forecast that agricultural exports are expected to reach a record $126.5 billion in fiscal 2011, up $13.5 billion from forecasts made last summer and an increase of $17.8 billion over 2010′s tallies.
That’s good for California’s farm sector. The state’s nut, citrus, alfalfa and other crops are an enormous industry, generating $34 billion a year from more than 25 million acres of farmland.
Not that there haven’t been challenges for the Golden State, particularly here in Central California. The dairy industry is slowly recovering from a collapse of milk prices. Access to water has long been a problem for farmers here, particularly in recent years.
But a diverse crop mix has helped many of the state’s farmers fight off the effects of the recession. A healthy snowpack bodes well for water supplies, and foreign demand is strong for California rice, grains, strawberries, citrus and nuts.