Innovations In U.S AG

INTRODUCTION

Since the 1930s, U.S. agricultural policy aimed at high-quality, low-cost food.
Americans spend about $6\%$ of income on food; in some developing countries it can be $45\%$ , in France about $14\%$ .
Productivity gains: more output with less land, inputs, and labor; cheap food prompts questions about environmental and rural impacts.
Growing consumer interest in food origins and sustainability (e.g., Omnivore’s Dilemma).

TYPES OF FARMS

USDA definition: an entity that sells at least $1{,}000$ of agricultural commodities annually.
Farm types by annual gross income:
- Small Family: < $350{,}000$ ; 89.7% of farms; 52.1% of land; 25.5% of production value
- Midsize Family: 350{,}000$-$999{,}999; 5.7% of farms; 21.7% land; 24.8% production
- Large Family: 1{,}000{,}000 $–$ 4{,}999{,}999; 2.0% of farms; 16.2% land; 35.0% production
- Non-Family: Varies; 2.7% of farms; 10.0% land; 14.7% production
Implication: most farms are small family, but large and non-family farms account for a substantial share of production value and land use.

SHARECROPPING AND TENANT FARMING IN THE U.S.

As of 2014, about 39% of U.S. land is rented by farmers.
Land ownership sources: non-relatives buy (44%), inherited (35%), relative sale (16%), auction (4%).
Leases can cover farm, mineral, gas/oil, wind, water, and recreation rights.
Many farmers own some land and lease some; typical leasing relationships run 18–20 years.
Environmental incentives on leased land depend on lease structure and enforcement.

VALUE OF FARMLAND IN U.S.

Cropland values vary by state; images show state-by-state values and percent change from 2022 to 2023.
Average cropland value in the U.S. has trended upward from 2009–2023, with notable regional variation.

FARMING SYSTEMS

Conventional: uses a broad input mix (pesticides, herbicides, bioengineered seeds); practices include no-till, cover crops, crop rotation, precision ag.
Organic: follows USDA organic guidelines; cannot use synthetic substances; must be certified for the USDA/Organic seal.
Discussion: Are organic farms environmentally and health-wise superior to conventional ones?

PUBLIC PERCEPTION OF FARMING

Public ideal: owner-operator, diversified, tech-enabled, environmentally harmonious, market-open, intergenerational.
Agribusiness perception: capital-intensive, standardized, highly managed.
Modern farms are expected to supply food, fiber, biofuels, energy, and ecosystem services while maintaining small-farm ideals.
Accountability: consumers expect transparency about farming practices.

FARM RESOURCE REGIONS

Regions include: Basin and Range; Northern Great Plains; Heartland; Northern Crescent; Fruitful Rim; Eastern Uplands; Prairie Gateway; Mississippi Portal; Southern Seaboard.
Key themes: regional specializations (cattle, wheat, dairy, fruits, vegetables, cotton, etc.), farm size distributions, and cropland shares.
Notes: ERS provides county-level classifications and production data by region.

ENERGY FOR AGRICULTURE

Mechanization: shift from human/animal power to gasoline-powered tractors.
Inputs have risen over time (fuel, nitrogen, pesticides).
Example trends in corn production inputs (illustrative):
- Gasoline per acre: from 15 to 22 gallons
- Nitrogen per acre: from 7 to 112 pounds
- Pesticides/herbicides per acre: from 0 to about 2.0 pounds
1973 oil crisis spurred ethanol discussion; subsidies appeared in the late 1970s, faded, then re-emerged around 2005.

BIOFUELS

Renewed interest in early 2000s due to high oil prices and policy support.
Policies: Energy Policy Act (2005) and Energy Independence and Security Act (2007).
Ethanol production grew from ~1.8 billion gallons in 2000 to ~15 billion gallons in 2014.
Question: How has ethanol demand affected corn prices and agricultural land use over the long run?

BIOFUELS (DETAILED INSIGHTS)

Figure: Corn price trend and percent of corn used for ethanol (in 2012 dollars).
Observations: Higher ethanol use coincides with periods of higher corn demand/prices; policy and energy market dynamics influence price sensitivity.

AGRICULTURAL CHEMICALS

Pests threaten crops; fertilizers and pesticides are core tools.
Fertilizers: primary nutrients $N$ , $P$ , $K$ ; secondary: $Ca\,Mg\,S$ .
Haber-Bosch: (1913) synthesizes ammonia from natural gas for nitrogen fertilizer.
Historical note: development supported military needs before agricultural use post-WWII.

FERTILIZER APPLICATION WORLDWIDE

Non-organic fertilizer use expanded from about 31.2 million tons (1961) to ~141.6 million tons (2005).
Share of fertilizer use by region rotates over time; major share globally in China, USA, etc.

NITROGEN RUN-OFF AND ENVIRONMENT

Nitrogen run-off is costly and harms water quality.
Mitigation strategies: cover crops, buffer zones, targeted irrigation to improve uptake.
Considerations: fertilizer prices impact farmer profitability and farm viability.

FERTILIZER PRICES

Anhydrous nitrogen price peaks in spring 2022 (~ $1{,}400/ton$ after around $500/ton$ in 2021).
Drivers: Russia’s export bans; capital-intensive fertilizer plants; natural gas costs.
As of recent data, prices have fallen due to lower nat gas costs and expanded capacity.

ECONOMIES OF SCALE

Definition: average cost per unit declines as farm size increases due to fixed-cost spreading and volume discounts.
Examples: pollution monitoring infrastructure can serve more pigs; equipment and inputs spread over more acres reduce per-unit costs.

PESTICIDES AND IPM

Pest management methods include mechanical controls, burning, and chemical pesticides.
EPA governs pesticide approvals; reviews occur every 15 years.
Integrated Pest Management (IPM): balances economic returns with environmental minimization of pesticide use; includes biological controls and education for farmers.
Pesticide use by category (illustrative): herbicides, insecticides, fungicides, others; regional patterns vary.

PESTICIDES BY REGION

Global distribution of pesticide sales by region shows variations in usage patterns across Europe, Asia, the Americas, and the Middle East/Africa.

PLANT BREEDING

Plant breeding has evolved from traditional selection to hybrid seeds.
Key programs began in the 1920s; Hi-Bred seed corn passed $1\text{ million}$ in annual sales by 1949.
Extension services helped disseminate hybrid seeds; hybrids yield productivity gains.

GENETIC ENGINEERING (GMOs)

Began in the 1980s; first U.S. GM crop released in 1994: Flavr-Savr tomato.
GM crops commonly involve HT (herbicide-tolerant) and Bt (insect-resistant) traits; many crops are multi-trait or stacked.
GM crops are largely fed to livestock, but some GM products are consumed directly (e.g., corn and soybean derivatives).

GENETIC ENGINEERING ADOPTION (1996–2020)

Adoption by crop: HT soybeans, HT cotton, Bt cotton, Bt corn, HT corn.
Trends show increasing share of planted acres with HT/Bt traits over time; some crops may have overlapping stacked traits.

GENETIC ENGINEERING: KEY TERMS

HT = Herbicide-tolerant; Bt = Bacillus thuringiensis insect resistance.
GM crops: potential to increase yields, tolerate drought/salinity, enhance nutrients, enable plant-based production of vaccines/medicines.
Most GM crops are used for animal feed, some for direct human consumption.

ADVANTAGES & DISADVANTAGES OF GM CROPS

Advantages: higher yields, drought/saline tolerance, enhanced nutrients, potential reduced waste, lower management costs.
Disadvantages: possible GM crop contamination of non-GM crops, unintended ecological effects, dependency on biotech companies, patent-driven dynamics.

PRODUCTIVITY OVER TIME - SOYBEANS

U.S. soybean yields (1960–2018) show a strong upward trend.
Best-fit trend line: $y = 0.436x + 21.161$ with $R^2 = 0.8944$ .
Implication: productivity improvements supported by improved seeds and inputs.

PRODUCTIVITY OVER TIME - CORN

Corn yields show substantial gains over time with multiple breeding paths: Open-pollinated, Double Cross, Single Cross, GMO, and combinations.
Representative trend lines (schematic):
- Open-Pollinated vs Open-Pollinated + GMO traits (illustrative)
Overall implication: scientific plant breeding and GM traits have contributed to productivity growth in corn.

FACTORS BEHIND PRODUCTIVITY GAINS

Key drivers include nitrogen fertilizer use and hybrid/GM seed development.
Drought years (e.g., 2012) can affect trend estimates.
Productivity gains affect both individual farm profitability and the broader economy, including land prices.

BIOENGINEERED FOODS

List of bioengineered crops approved or commonly used: Alfalfa, Apple (Arctic varieties), Canola, Corn, Cotton, Eggplant, Papaya, Pineapple, Potato, Salmon (AquAdvantage), Soybean, Squash, Sugarbeet, Sugarcane.
Source: USDA listing of bioengineered foods.

DISCUSSION QUESTIONS

Do bioengineered foods have implications for international trade?
Do consumers have a right to know what is in their food? How easy should it be to find out?

U.S.-MEXICO TRADE DISPUTE (AUG 17, 2023)

U.S. preparing to escalate a dispute over Mexico's ban on GM corn, potentially forming a dispute-resolution panel under USMCA.
Mexico bans GM corn for human consumption; intends to replace it with GM yellow corn for livestock/feed.
Underlying issues include health concerns, native varieties, and trade implications.

UPDATE ON GMO S

December 2020: FDA approved GalSafe pigs for human consumption and medical applications (including drug production and organ/tissue use).
May 2023: Australia approved GM bananas resistant to a deadly fungus (seen as a safety net for growers).