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.

Emerald ash borer affecting more states by the day

In a Sept. 3 article in the Dayton Daily News, scientists estimated that the emerald ash borer (EAB) beetle has already killed millions of ash trees in the United States. It is considered one of the most serious threats facing the forests in North America. It is capable of eliminating an entire species of trees.

The consequences of this beetle’s destructive path are bigger than some might think. Around 114 million board feet of ash saw timber, which is valued at roughly $25.1 billion, is grown in the eastern U.S. each year. Since EAB was introduced to the U.S. in the 1990s, over 25 million ash trees have died or are dying and 7.5 billion ash trees are still at risk.

Not only is there money being lost by EAB destruction of ash trees, but millions of dollars are being spent by the USDA to destroy the beetle. In 2004, the USDA committed $40 million to destroy the beetle and plans to spend over $350 million in the next eight years.

EAB is a green beetle, but don’t be deceived by its innocent look - it’s not as harmless as it appears. The EAB is native to parts of Russia, China, Japan and Korea, so how did it get to the United States? It is suspected that it was accidentally imported from China in the 1990s. In 2002, it was discovered in Canton, Mich. It has since migrated and today threatens numerous states throughout the U.S.

Since 2007, there have been reported cases of EAB attacks in Ohio, Michigan, Missouri, Pennsylvania, Illinois, North Dakota, West Virginia, Wisconsin, Maryland, Indiana and Illinois. In Ohio alone, 43 counties are under quarantine.

Currently, the United States Department of Agriculture (USDA) is trying to exterminate all the beetles in the U.S., destroying every ash tree within a half mile of a known infested tree.

So how does this effect Ohio? In a recent study by the U.S. Forest Service, there are roughly 3.8 billion ash trees in Ohio, or one in every 10 trees in the state. The value of ash timber in Ohio is valued around $1 billion. Before EAB attacked, the ash was considered to be the most important tree to nursery and landscaping businesses. It can cost up to $1,000 for some homeowners to completely remove one tree. Ohio’s Division of Forestry predicts that over the next 10 years, the economic impact from EAB on Ohio could reach over $3 billion. The estimated total cost, if Ohio’s urban ash trees were completely lost, would be roughly $7.5 billion.

Not only is EAB affecting nursery and landscape businesses, but it’s also hitting the tool-handle market. A large portion of the market for ash in Ohio is focused around the tool-handle market, meaning anything from handles on hammers to screwdrivers, and other tools with wooden handles. There are two major plants focused on this market in Ohio, both of which get roughly 25 percent of their wood from ash trees. Ohio is actively seeking federal assistance to help destroy EAB to avoid the continued financial threat to the state’s already weakened economy.

So how does EAB kill ash trees? The adults lay eggs in the crevices in the bark of the ash tree. The larvae then burrow into the bark after they hatch and consume vital cambium and phloem. This typically causes the tree to die within two years. The good news is that the average life span of the EAB is one to two years. The bad news is that a female can lay between 75 to 300 eggs.

EAB continues to be a threat to Ohio and the surrounding states with no end in sight. Will the USDA be able to eliminate this pesky beetle? Let me know your thoughts.