The changing world of farm life

January 18, 2008
By: Dan Davis

Many economists and politicians like to compare the evolution of manufacturing in the U.S. to that of the agricultural industry. At one time agriculture was the dominant industry in the U.S., but as time passed, the
numbers employed in agricultural jobs diminished with the rise of productivity-enhancing technologies. The experts
claim the same thing is happening to manufacturing.

I"m not so sure the future of metal fabricating will parallel that of agriculture, but I know that metal fabricators can learn from those folks involved in agriculture. Arguably, U.S. farmers are entering uncharted territory in terms of global competition.

Susanna B. Hecht and Charles C. Mann wrote How Brazil Outfarmed the
American Farmer
for the Jan. 21 issue of Fortune and detailed how, in just 40 years, Brazilians became the
world"s dominant producer of the difficult-to-grow Glycine maxthe ordinary soybean. It"s a wonderful article that reveals how
authoritarian regimes, entrepreneurs, horrific deforestation, and technological innovations can help to transform an economy. (The article should come with a warning: Don"t try this mixture at home.)

But the tale got me to thinking about Brazil"s soybean accomplishments and how they relate to U.S. metal fabricators:

  1. Just as U.S. farmers might be missing a golden opportunity down in Soylandia, as the Fortune
    authors call Brazil"s heartland, could U.S. metal fabricating companies be missing business opportunities in Brazil and other international hotspots? Of course, this is easier said than done, but people do make the leap. The article leads off with the story of Phil Corzine, a soybean farmer in Assumption, Ill., who rounded up $1.3 million from investors and other farmers and purchased 3,500 acres in central Brazil in 2004. Since then the land has doubled in value, and Corzine has raised another $400,000 for investment. Couldn"t there be a great opportunity for a metal fabricating company somewhere in the world where its expertise could better the primitive practices of native shops?

  2. Corzine made the move to invest in Brazil after a simple information-gathering trip in 1998. Fabricators should take advantage of such opportunities because they may discover innovations and opportunities. The Fabricators & Manufacturers Association just happens to be planning a trip to China, and this might be the chance you"ve been waiting for to see how fabricating is done on the other side of the world.

  3. The U.S. Department of Agriculture reported last summer that U.S. soy plantings was limited to 64.1 million acres in 2007, a 15 percent drop from the year before. This is likely to get worse in coming years as soy farmers switch over to corn to take advantages of sky-high prices driven up by ethanol subsidies. Fabricators involved in supply components or erecting these ethanol facilities have to be wondering in the back of their mind: Will ethanol ever really take off? Ironically, Brazil is a leader in the development of alternative fuels derived from agricultural products, but you won"t see it imported into the U.S. It"s ethanol or bust, baby.

  4. What"s the future of the agricultural industry in the U.S., particularly with weird weather changes occurring and lack of water becoming more of an issue in certains areas? In Brazil, the tropical climate lends itself to two soybean-growing seasons—three, if irrigation is used. That can be replicated in other nations along the equator. If that"s not a competitive advantage, I don"t know what is.

Life down on the farm isn"t as simple as it used to be. I guess that goes for a lot of people nowadays.
Dan Davis

Dan Davis

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8281