farmgate: Are You More Productive Than Your Father Or Grandfather? You Bet!
If you attended the recent Farm Progress Show, you may have seen some equipment that caused you to think, “Boy, I could be a lot more productive with that!” Your yearning is probably true, although your spouse may beg to differ. But in actuality, USDA says your productivity has increased to the point that you have every right to beat your chest and snap your galluses.
The last half of the 20th Century was momentous in terms of US agricultural productivity. Milk production climbed from 5,314 to 18,201 pounds per cow, corn yield went up 39 bushels per acre and the typical farmer was 12 times more productive in 2000 than he was in 1950. No one anywhere else comes close to the pace being set by the American farmer.
USDA’s latest report on US Agricultural Productivity utilizes a new formula called “total factor productivity (TFP) which removes the technological advances to level the playing field with other industries and countries. While high powered inputs like fertilizer and machinery increased your output, USDA says those increases were offset by reductions in cropland and reductions in the agricultural labor force. Subsequently, the total amount of crop and animal output per unit of input, increased 2.7 times in that half century. USDA’s Economics Research Service says during the period studied total inputs remained constant at an index of 100, but total output and total factor productivity ended the century at 270 on the index. The consequence is that farm commodities can be grown and harvested at less cost, benefiting farmers, as well as downstream merchants and consumers. “Productivity growth allowed more output to be produced from the same amount of inputs, reducing the average cost of production.”
While the 50 year productivity trend line rose at a steady pace, there were year to year fluctuations that stemmed from energy crises, droughts, and farm policies such as the 1983 PIK program. During the period US industrial production growth nearly doubled that of agriculture, because of the shrinking share agriculture held in the US economy, but while total factor growth for industrial production climbed 13 percent, the TFP climbed 117 for agriculture. It reduced the need for labor and capital inputs, while keeping up with total output. As that was happening, labor was replaced by new machinery and improved chemicals. While farm labor declined 3.2% per year, output per worker climbed 4.9% per year. UDSA economists say land, capital and non-labor inputs accounted for 60% of the growth in labor productivity, the TFP growth accounted for 37% of the rise in labor productivity.
So what does this mean? USDA says, “Instead of relying primarily on the development and adoption of new farming methods that substitute non-labor inputs for farm labor, agricultural productivity growth is increasingly based on finding better ways to manage and save on a whole range of inputs.” New chemicals have allowed the use of less chemicals per acre. Integration of livestock production and improved animal husbandry practices have resulted in more productivity.
Since you are so productive, visit your boss and tell him you want a raise!
Summary:
Productivity in US agriculture has increased more rapidly in the past 50 years than in other countries, and much more rapidly than US industrial production. The yardstick to measure productivity eliminates technological advances, and relies solely on the productivity of the American farmer. While labor has been replaced by improved equipment and crop protectants, the actual output per individual has increased.
Posted by Stu Ellis on September 6, 2007 12:04 AM to farmgate