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More outside forces playing role in today's ag

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Agriculture today is subject to more influences than ever before, both domestically and globally making the industry more challenging for those working in the field.

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"Agricultural is more export dependent than ever before, and the U.S is exposed to a lot more competition than in the past," said Terry Barr, senior director for CoBank's Knowledge Exchange Division. "We see China be aggressive in grain production and the rest of the world has also moved up its grain production. I don't think we'll see that go down, which could cause a grain buildup if we get as large of a corn crop as is predicted."

Earlier this year, Woody Barth, president of the North Dakota Farmers Union, expected corn to be a popular crop in North Dakota for 2013 -- especially in the north and northwestern areas of the state.

Then, there is the demand for soybeans.

"I think they'll be a little pick up in the acreage on the soybean side," Barr said. "But we will see China go to multiple destinations around the world to get commodities like soybeans and cotton."

Barr -- whose work with CoBank's KED identifies and analyzes key industry trends, structural changes and policy initiatives that have the potential to affect agricultural markets and rural infrastructure -- said during the Sunflower Summer Seminar in Medora last month that the challenge for those working in agriculture today is that people must be prepared for changes that will occur on a global basis.

Luckily, he said, agriculture has been able to sustain itself after the 2008 financial crash that hit many industries hard.

"Agriculture has been mostly insulated from a lot of it, making it the one place that people wanted to be in during the last few years," Barr said. "That is especially true as the middle-class in both China and India grows, increasing their meat consumption. The long-term demand looks positive for our agricultural industry in those markets."

But, he said, there is still the impact of governmental influences that could play a big part in how the agricultural industry will grow in the upcoming years.

"Governments across the globe keep cutting their budgets, and if governments continue to keep cutting their budgets, it could eventually impact consumer demand," he said. "Over the next few years or so, an increase in interest rates may also change cost structures for producers."

One thing Barr could guarantee is that there will be global factors that play into the market for agricultural goods, including new energy, Mother Nature and the leadership of countries around the world.

"I assure you that we will see disruptions to the market over the next five years," he said. "Even the U.S economy is not quite on track yet either. There are a lot of issues with the economy that are unresolved, on top of issues with drought and flooding in different parts of the country."

Barr said he believes that lawmakers will eventually help bring a little more certainty back in the agricultural market by passing a farm bill.

"But I don't think it will happen without a lot of political theatre and figuring out issues with crop insurance," he said. "And that could be what tempers growth and demand for commodities in the market."

Likewise, Barr said the U.S. economy may not expand at as fast of a pace as farmers and ranchers would hope for until some other government policies become clearer, like with tax and energy policies.

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