Economic Tidbits

Living In Interesting Times

“May you live in interesting times.” This quote supposedly originated in ancient China, but according to the website The Phrase Finder, it is neither Chinese, nor ancient, having first been introduced in the last century. While most people think of the quote as a blessing, it is actually a curse. By interesting times, it really means to experience disorder and trouble in life. For agriculture, it seems as if the curse has been realized over the past few years.

Figure 1 comes from economists at the University of Illinois Department of Agricultural and Consumer Economics. (As a sidenote: Figure 1 is an economist’s nirvana with so much packed into one graph). Across the top is a timeline of disruptive events which affected crop producers between 2018-2020. The figure also plots corn and soybean prices (blue and orange lines respectively) for the same period. Finally, monthly U.S. agricultural exports are shown (shaded blue bars). Thus, in one graph, the effects of disruptive events on prices and exports can be seen.

Figure 1 serves as a reminder of the many disruptive events agriculture has endured since 2018. Trade disputes, wet weather and floods, and, of course, the COVID-19 pandemic created uncertainty and volatility in the crop markets. And, while the figure only focuses on crop production, livestock producers were affected by many of the same events too. The economists at the University of Illinois describe the past three years as a, “series of overlapping, distinct, and significant disruptive events that is rare, with few other comparable historical sequences.”

One would hope the past three years were an outlier and the likelihood of another series of disruptive events occurring in such short order in the future is small. If anything, though, the timeline serves as a reminder that disruptions can and will occur. The Illinois economists said, “Though events of the 2018 through 2020 period could be considered outlier situations, such periods of change, disruption, and uncertainty will always be present.” In other words, always expect and plan for the unexpected.

Source: Swanson, K., C. Zulauf, N. Paulson and G. Shnitkey. “Timeline of a Rate Series of Disruptive Events for United States Agriculture.” Farmdoc daily (11):108, Department of Agricultural and Consumer Economics, university of Illinois, July 20, 2021.

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