10-16-96 - Laserfiche WebLink

Home Browse Search

r mates that agriculture accounts for 17 percent nesota farmers enjoyed a , of the state's total industrial output.22 percent boom created by rising ex- x,,- v« of total exports,and 20 percent of jobs.And port demand,generated in though agriculture is a declining portion of the large part by increased economy—primarily because other sectors have grain imports by the then- grown at a relatively quicker pace—it is"still Soviet Union.The rural huge in terms of output,in economic impor- economy hummed.and the lance."explains Edward Lotterman,an agricul- Twin Cities.though it may tural economist with the Federal Reserve Bank have been hit by the 1974- of Minneapolis. 75 recession.enjoyed some Agriculture plays a unique role in the state's ripple effects. economy.While Minnesota is not entirely de- Lotterman explains that pendent on agriculture,and thus subject to its states like Michigan and ups and downs•the industry plays a large Ohio,with their heavy de- enough role that major trends have a significant pcndence on the auto and influence on the whole state.That means that steel industries,were-hit booms in agriculture have traditionally buffered much harder by the 1974- r. the state's economy,even when the rest of the 75 recession than was Min- nation faces recession.And major downturns in nesota,where agriculture, agriculture have aggravated the impact of a na- a key industry,saw rapidly Lional recession on Minnesota as a whole. rising income. In fact,he In the early to mid-1970%,for example,Min- suggests,the architecture of rural America reveals the boom times in agricul- ture.with periods of sn co- Those people leant new construction co- inciding with periods of ris- Minnesota state Agriculture eommissi—or Gene Mugoson says the who approach ing farm income.And the business component of farming is critical. last major burst of con- struction, he says, took farming as a place in the mid-1970%. But in the early to mid-1980k,when the fall Jucers rank among the lop in the nation in a • business and financial crisis hit the Midwest.the effects were remarkable variety of commodities. fin felt throughout Minnesota.Large urban al- The recently released"Minnesota Agricul- cial institutions with heavy concentrations of tural Statistics"report,a joint publication of are aggressive agricultural loans suffered along with rural the U.S.Department of Agriculture and the lenders.The legislature passed a mandatory Minnesota Department of Agriculture,shows at managing it mediation bill,which meant that before lenders that overall.Minnesota ranks seventh in the could foreclose on a farm they had to partici- nation for total agriculture cash receipts—sev- pale in a mediation session. club in livestock and livestock products,and as such can Though the intent of mandatory mediation eighth in crops.Among crops.slate producers was to stem the tide of losses that rippled are first in suear beets:second in green peas: SNYcVV Vf u�!t�� throughout the state,in the eyes of many.the third in soybeans,spring wheat.oats,sunllow- law further damaged weak banks and stymied ers.flax,and sweet corn:and fourth in corn agriculture lending.Cash-strapped farmers and barley. put together, a stopped buying cars.building homes and farm The same depth and diversity prevails in buildings,and investing in equipment.Car deal- livestock and dairy production.in which Min- topnotch ers,construction companies,and implement nesota is second in turkeys and American dealers felt the impact. cheese:third in pigs•hugs.and mink pelts: fourth in sheep:and fifth in cattle. operation that A Solid recovery As Tom Cashman,executive vice president Since the 1980s,the slate's agriculture sector of the Mankato-based Northwest Agri-Dealers �� stand � has bounced back and appears as strung as Association,points out,the diversity"makes it ever.Unlike many western and midwestern a more solid economy,nut just for agriculture. states,where one or two commodities donli- but for the whole economy." test of time. nate agriculture,leaving the entire sector vul- Minnesota's healthy mix of ag products con- ■ nerable to periodic downturns.Minnesota pro- tributes to overall economic stability through PHOTOGRAPHS BY ERIC AGHEESSEHS - TWIN CITIES BUSINESS MONTHLY OCTOBER 1996 35 •