Agriculture's Most Recent Super Cycle

Ag’s Most Recent Supercycle

I’m KayDee Gilkey with the Northwest Farm and Ranch Report from the Tri-State Grain Growers Convention in CDA.?

For the last decade many ag producers have been experiencing an ag supercycle. According to Dr. Dave Kohl, Globetrotting Emeritus ag econ professor from Virginia Tech, there have been four super cycles in Ag over the last 100 years. The first three -- right after WWI, the second after WWII and the third in the 1970s all lasted for two to three years. This current supercycle has had some real longevity as Dr. Kohl explains.

Kohl: This one has last 10 years. It’s been the convergence of some very positive events: growth of the emerging nations, of course the ethanol mandate, the weather, low interest rates and the low value of the dollar have all aligned to give the best of times for much agriculture -- particularly on the grain side, not necessarily on with livestock side. What is interesting is, Will this super cycle continue to year 15? There is probably going to be something that comes along that will require us to dismount off the super cycle. One thing I tell producers, ‘You better be aware and not get too complicate - just like this recent storm on the east coast-- we are getting some early warning signals and so you better have your house in order in case the super cycle happens softens or actually disappears.”