Mark Pearson, host of the nationally syndicated public television program, "Market to Market," talked about what is in store for agriculture at the Le Mars Chamber's Agri-Business Luncheon on Tuesday. [Click to enlarge]

Things are changing in agriculture and the long-term outlook is good, according to the host of a nationally syndicated farm program.

Mark Pearson is host of "Market to Market," which is broadcast on public television stations across the United States. He brought his message about what's ahead in agriculture to Le Mars on Tuesday for the Le Mars Area Chamber of Commerce's annual Agri-Business luncheon.

"Worldwide, there are 100,000 people every day joining the middle class. These are people who have gone from a subsistence lifestyle to earning a living and having money left over," Pearson told the crowd.

As China and other countries prosper, the demand for ag commodities is increasing. Pearson said it's creating a huge demand for pork in particular and also beef.

"That's awfully good news for everyone in this room because of the concentration of livestock feeders that we have in Plymouth County," he said.

The Chinese and people from other newly prosperous Asian countries are driving up energy costs. That increased demand is why the U.S. must look for alternative fuel sources, he explained.

Pearson compared biofuel subsidies, which cost about $8 million annually, to the cost of maintaining the U.S. Navy, which runs slightly more than $200 million a year.

"So when somebody starts talking to you about biofuels and their subsidy, make sure you're talking about apples to apples and include the subsidy that has been in place since modern times to keep the imported oil freely flowing to the United States," he said.

(Advertisement)

Increased energy costs have been the biggest cause of increased food prices, Pearson said. A worldwide wheat shortage -- not increased wheat prices for farmers -- has driven up the price of wheat.

"We couldn't grow a wheat crop anywhere in the world" last year due to inclement weather conditions, he explained.

Anything that grows in the ground, including corn, soybeans and hay, has increased in price. Pearson said the corn and soybean markets will continue to be volatile due to short supplies, and any type of weather problems will cause those prices to increase.

Grain commodity prices will eventually turn around, but Pearson doesn't expect that to happen soon. Prices began to climb in September of 2006, he said, and agricultural expansions have historically run four to six years.

High grain prices over the past 18 months have put tremendous stress on the livestock business, he said.

"We were so used to that cheap product, and now it's gone, but we're adjusting," Pearson said. Producers are changing rations and taking other measures to cut feed costs, he explained.

Pearson expects an upswing in the beef and pork markets in the coming two years because of the decreased supply. The number of stock cows in the U.S. is the smallest it's been since 1959, he said, and the current liquidation of sows will cause the hog market to increase in the next two years.

Food costs have not kept pace with the estimated three percent inflation rate in past years, but Pearson said that expense is expected to increase two to four percent this year. People want agriculture products, whether it's livestock, grain or ethanol, he said.

"If you're in this business for the long pull, if you're in agri-business supporting farm production for the long pull, things look pretty doggone good," he said.

Pearson's appearance in Le Mars was sponsored by American Bank, First National Bank, Plymouth County Farm Bureau, Primebank, and Wells' Dairy, Inc.