Agriculture research has driven major increases in input/output margins since the late 1940’s. These increases have been clear to many farmers strictly looking at crop yields and revenue statements. However, it is economic data that provides quantifiable evidence of the value of scientific and technological advancements in agriculture. Not only does economic data analysis provide evidence, but provides calculated insight into what is working and what is not, along with where opportunities might be available. In the case of the impact of scientific (genetic/technological) agricultural research the results have been huge. Per dollar of input agricultural outputs have grown at a rate 3 times that of inputs. Where inputs have essentially remained constant for the past 60 plus years.
The story in Iowa is much the same, with the minor difference, that inputs have decreased significantly since 1980 while outputs have increased at the same time. What this says, essentially, is that we are doing more with less, or on the national level doing more with the same amount.
In addition to understanding what the output growth looks like, a study by the USDA’s Economic Research Service reported that the crop production sector is growing faster than the livestock sector in productivity, and the composition of inputs has shifted away from strictly labor and more into technology based inputs. Furthermore, since 1981 the rate of growth for intermediate inputs (the name the ERS gives to machinery and other capital inputs) has decreased but is still on the rise. However, in the ERS study there was no statistical evidence of a slowdown in overall productivity. But with recent budgetary pressures on government funded research a lagged effect could be an impending slowdown of productivity growth. A major influence in the solution to continue productivity growth must be increases in private sector investment in agricultural research and development to counter balance decreased levels of government funded research. (ERS, 2015)
Full USDA, ERS Agricultural Productivity report can be found here.
Preston Lyman is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.