The pessimism, even fear, seen among American consumers over the troubled economy could affect farmers where it hurts, the pocket book.
That was one of the provocative things Edmond Seifried said in the keynote address Wednesday at the International Crop Expo that brought hundreds of farmers from several states and Manitoba to the Alerus Center. It continues today, with lines of new farm machinery and technology in the arena and crop production sessions in the meeting rooms.
Seifried deserves to be heard, if for nothing else because he was on record as early as 2004 predicting the hottest housing boom in American history would burst like a bubble and maybe start a recession. He's a longtime economics academician on the East Coast as well as an advisor to community banks across the nation.
Over the past few months, consumers have been cranking back their spending at the pace of $60 billion a month.
"They are scared," he told several hundred farmers. That "Lite Economy," of less spending and thriftier habits means less demand for the stuff farmers grow, he said.
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Although the recession ended last summer, the recovery is another story and one he expects to take maybe five years before employment levels get back to where they were three years ago, Seifried said.
Seifried is a popular speaker on the circuit of agricultural expositions and such, but like anyone else, he's not always right. Four years ago he told a convention of farmers in Oklahoma that although he thought the housing bubble might burst and cause a recession, he thought the country would end up avoiding a recession.
Seifried is an optimist, he said, in spite of all the bad economic news swirling around Washington and Wall Street.
One of the myriad of charts and graphs he displayed aimed at showing the exceptional nature of the American economy. With a gross domestic product (GDP) of $14.5 trillion, the United States outstrips the next three -- Japan, China and Germany -- combined; with $1.6 trillion to spare, which is more than Brazil's entire GDP.
That tells him the United States can weather the enormous economic challenges it faces, he said. Despite last year's recession that brought the highest unemployment in decades, the nation's GDP lost only 2.4 percent in 2009, he said.
The vast energy potential across America gives him hope that this year can be a year of recovery. While praising North Dakota for having an unemployment rate less than half the national average, he said he wouldn't be surprised if it rose from 4.4 percent to 8 percent within a year or two. Despite the strong farm and energy economy in North Dakota, the effects of the nation's recession will affect the state's economy, he said.
The Expo continues today with a keynote panel discussion on "New Energy Horizons for Northern Plains Agriculture," with Cole Gustafson and Dwight Aakre of North Dakota State University's extension service, and Dale Enerson, who runs the carbon credit program for the National Farmers Union.
Reach Lee at (701) 780-1237; (800) 477-6572, ext. 237; or send e-mail to slee@gfherald.com
