Exports to China are pushing up U.S. farm prices, exports and incomes in 2010 and are expected to do so in 2011 as well.
U.S. farm exports hit a record in 2010, at $126.5 billion, Joseph Glauber, chief economist of the U.S. Department of Agriculture, said in a speech to the AgriNXT Conference on Thursday at the Hyatt Regency Wichita.
The conference was organized by the Kansas World Trade Center and the Agri-Business Council of Wichita to look at the future of agriculture.
As it has gotten richer, China has become the second-largest importer of U.S. agriculture, Glauber said. In particular it wants soybeans, which are used for animal feed for its growing livestock industry. It buys 60 percent of all soybean exports.
"They're not raising chickens in their backyards anymore," Glauber said.
As demand has grown, it has helped to push crop prices up over the past six months — good news for crop farmers, bad news for livestock farmers.
As a result, net farm income is expected to hit a new high this year, according to the USDA. Average farm income is expected to be $83,194 in 2010.
Farm incomes have now hit very high levels four times in the past seven years. That is the best extended period for farm incomes since the mid-1970s.
The down side of modern agriculture, Glauber said, is that globalization has increased the volatility of prices, as foreign markets and speculators have greater say on what happens on prices in Kansas.
The good news, he said, is that the general outlook is more up than down.
"Agriculture has seen a lot of booms and busts," Glauber said. "We'll probably see more busts in the future, but for now, the long-term trends look pretty positive."