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Ag trends include improved economics

ConAgra economist says China, growing population are keys TRENDS IN U.S. agriculture will include a return to better prices, increased use of the Internet, new, non-food uses for agricultural products, a waning of controversy over biotechnology, and a growing emphasis on international trade.

William Lapp, vice president for economic research for ConAgra, addressed the Western Agricultural Chemical Institute annual meeting recently in Lubbock and said the United States must be ready to take advantage of a growing world population.

"We're in a depressed price cycle now," he said, "but that will change. Agriculture will tough it out. The population of the world is growing and American farmers are producing something an expanding population must have. United States agriculture is the most competitive agricultural system in the world. "

He said China will be a key. "The United States has a great opportunity to trade with China because of a bill pending that would normalize relations. Folks may disagree with China's actions, but we can't base trade policies on international politics. The same holds for Cuba."

Lapp said China is a huge market and will be " a net importer of cotton. China's 1.2 billion people represent a big opportunity," he said. "China can't feed its own people and will have to import grain, meat and cotton and is concerned that it could fall short of food."

Lapp said farm organizations should "push for free and open trade."

Ag policymakers can't afford to repeat mistakes of the past, he said. "Unilateral setaside programs don't work and are not wise."

Lapp said food production will change, as well. "Plant technology will continue to be a driving force, and that's not just GMO technology. Consumers want to know more about the products they eat. "Traceability will be a big concern, as will taste and health. But it's difficult to predict what consumers want. People will eat doughnuts and wash them down with Diet Cokes.

"Crops will be tailored to meet specific customer needs. But consumers will choose convenience over cost and the United States food supply is less costly and more convenient than ever. Consumers spend only 10 cents of every dollar on food. A lot of labor has been removed from food production.

Food safety, he says, relates to traceability, identifying where food products come from. "Our food processing industry is much cleaner than it was just 10 years ago," Lapp said. "Also, farmers take more care in production."

The GMO issue, he said, is still important but perhaps not so volatile as it was a year ago. "More than half the cotton crop, 70 percent of the soybean crop and a good portion of U.S. corn production is in GMO varieties. But we have to be cautious with this technology and not force it down throats of people who don't want it. Europe, for instance, is very particular about GMO products.

"At ConAgra, we will be sensitive to trade and domestic GMO use. But a lot of the bad press surrounding the issue is over. There were no monsters."

Lapp said farmers have not reached yield potential on most crops and achieving those goals comes with challenges. "Optimum yield for corn could be more than 500 bushels per acre," he said. "If we reach that, we have to find other uses for corn, either through trade or non-food uses (such as ethanol)."

He said the Internet also will influence the agricultural industry. "The world is changing rapidly and the Internet is changing the way we do business."

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