Last week we briefly examined the idea of trading less and producing more stuff in the U.S. This week let’s see what that would mean for agriculture.
Here are our largest ag imports by value. Fruits and vegetables are unsurprisingly at the top of the list. We get a lot of produce from the tropics and southern hemisphere during our winter, and many things that simply don’t grow here – like bananas. But we also import grains and oilseeds, wine and beer, and coffee. The bottom line is becoming more self-sufficient in ag would be possible except for a few notable products like coffee and bananas. It would necessarily be more seasonal as well, and certainly more expensive. One big problem is the reason we import many ag products, in addition to climate, is labor. Without more ag labor we simply cannot produce enough fruits and vegetables to support our current consumption patterns. Also gearing up to do so would take years for some products like olive oil.
The exports side is different story. Many of our top crops are heavily dependent on exports for their market. You’ve seen this chart before (and I wish the USDA had used more contrasting colors), but from nuts to cotton to beans, we would be buried under our output should ag self-sufficiency become a goal for the rest of the world.
While there are valid criticisms of globalism, the expansion of ag trade and production specialization is a textbook example of the many benefits of comparative advantage. We see no problem for other countries depending on us for almonds or rice since our natural advantages and expertise makes us low-cost, dependable suppliers, or least has until recently. The idea we are somehow made stronger geopolitically by not taking advantage of what we do best and allowing other nations to do likewise is hard to understand, let alone prove. When critics warn that selling too much to only a few or one customer is risky, I like to point out that in global markets there is only one customer: the globe. If the highest bidder is frequently the same, it does not constitute weakness so much as an efficient market process.
