M EGATRENDS IN A GRICULTURE Road Warrior of Agriculture: Dr. David M. Kohl Professor Emeritus, Agricultural and Applied Economics Virginia Tech, Blacksburg, VA (540) (Alicia Morris) | (540) (Angela Meadows) | January 19, 2013
The Wild World of Global Economics Swiss cheese economy China 7 th in 2000, 2 nd in 2012 & Brazil is 14 th in 2000 and 6 th in 2012 China vs. USA USA household income: $54,000 in 2000, $47,500 in 2012 China household income: $1,090 in 2000, $6,500 in 2012 800 million people in China live on less than $2.00 per day 27% of the world population live on less than $1.00 per day 20% of the world population live on less than $2.00 per day Commodity boom- super cycle 50% of the world economic growth since 2000 has been BRICS & KIM-T 2
The State of Global Economies: Percent of World GDP Developed/Rich NationsEmerging/Growing Nations USA 23.6%China 9.3% Euro Sector 26.0%Brazil/Russia /India/S. Africa 8.6% Japan 8.3%Total BRICS 17.9% Summation of Developed 57.9% South Korea 1.6% Indonesia 1.1% Mexico 1.6% Turkey 1.2% Total KIM-T 5.5% Summation of Emerging 23.4% 3
Supersized Supercycle half of world growth in emerging nations BRICS & KIM-T’s = U.S. economy (as a % of world GDP) ethanol & biofuels oil, gas, & minerals low value of dollar low interest rates minimal opportunity for investments 320/260/60 rule mother nature/production concentration 4
Global Factors & Indicators rule of emerging nations Euro debt 87% GDP German elections China economic slowdown population shifts trade PMI < 50 synchronized slowdown 5
USA Economy Indicators fiscal cliff/slope/downgrade debt debt level: 105% GDP & 41% foreign financed PMI: 50 rule LEI: 0.3% rule Housing starts: 1.1 million Unemployment rate: 5.0% Core inflation: 2.0% & Headline inflation: 4.0% 6
Global Economic GDP Growth AssessmentLocationCurrentGreenYellowRed USA Europe Japan BRICS Nations* KIM-T Nations** *Brazil, Russia, India, China, and South Africa Fill in current status and check green, yellow or red for each region. © 2010 by Dr. David Kohl & Dr. Ed Seifried 7 ** South Korea, Indonesia, Mexico, and Turkey
Cut Above Super Producer profit plan: growth/evolution plan working capital & liquidity plan: 33% rule modest/conservative debt: 50% rule margin= earns & turns modest living sixth “C” 8
10 Reasons to be Optimistic About Agriculture 1.50/100/70 Rule 2.Agriculture is 5-dimensional 3.One size does not fit all 4.Young people, women, and minorities 5.Convergence of technology 6.1 in 6 jobs 7.BRICS & KIMT 8.Think globally & act locally 9.Profitable 10.The cooperative system support network 9