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Speaker 1: On this episode of News World, we're going to be

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Speaker 1: looking at the rise in prices, the potential threat of inflation,

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Speaker 1: and what Americans should pay attention to in the upcoming

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Speaker 1: economic news. Inflation is a hidden tax. It is a

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Speaker 1: powerful and often unseen, an unstoppable way for a government

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Speaker 1: to pay for its goods and services without raising visible

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Speaker 1: taxes that make people angry. Gas skyrocketed by nine point

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Speaker 1: one percent last month. Since February, prices of fruits and

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Speaker 1: vegetables have risen by nearly two percent, and the index

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Speaker 1: for meats, poultry, fish, and eggs has risen by zero

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Speaker 1: point four percent. Before the pandemic began, the national average

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Speaker 1: for a pound of bacon in January twenty twenty was

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Speaker 1: four to seventy two. By last month, the price had

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Speaker 1: soared to five dollars and eleven cents. According to exclusive

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Speaker 1: supermarket point of sale data from Nielson I Hugh. Ground

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Speaker 1: beef is up to five dollars and twenty six pound

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Speaker 1: from five oh two. Bread is up to two sixty

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Speaker 1: six a loaf from two forty four, and the price

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Speaker 1: increases are more in certain cities and geographic areas. Here

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Speaker 1: to help us make sense of what is causing the

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Speaker 1: rise in prices and what we should expect for the future.

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Speaker 1: Is my guest, doctor Jason Lusk. He is the distinguished

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Speaker 1: Professor and head of the Agricultural Economics Department at Purdue University.

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Speaker 1: If you don't mind, doctor Lusk, let me welcome you.

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Speaker 1: What got you interested in economics and what got you

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Speaker 1: interested in agricultural economics in particular? Thanks for having me on,

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Speaker 1: mister speaker. It's a real privilege. That's a big question.

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Speaker 1: I grew up in a very rural area of West Texas.

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Speaker 1: My family was not in farming directly, but my parents

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Speaker 1: were school teachers and my dad as a school administrators,

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Speaker 1: So I had the kind of family that didn't want

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Speaker 1: their kids sitting around the house idle during the summers.

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Speaker 1: So I spent my childhood working for neighboring farms. So

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Speaker 1: that got me interested in agriculture, and I got a

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Speaker 1: degree in food science, so I got some experience working

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Speaker 1: in the food processing side of things. But really like

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Speaker 1: the economics and the interaction of agriculture, food and people

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Speaker 1: and have been blessed to have a great career to

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Speaker 1: be able to work on those things. It's really amazing

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Speaker 1: to be able to get up and work on things

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Speaker 1: that you're really interested in every day. As a distinguished

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Speaker 1: professor and as head of the agricultural economics department, you

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Speaker 1: both teach and do research that's correct. So here at

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Speaker 1: Purdue University in Indiana, where one of the major land

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Speaker 1: grant university is one of the largest agricultural colleges in

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Speaker 1: the country. So research is a big part of what

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Speaker 1: we do here, and so trying to understand what's happening

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Speaker 1: to farm and food prices, impacts of new farm technologies,

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Speaker 1: trying to create new farm technology, these new digital agricultural

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Speaker 1: technologies that are pretty exciting. We're teaching students. I have

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Speaker 1: about four and five hundred undergraduate students in my department

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Speaker 1: that are getting degrees and agribusiness, agricultural economics, sales, and marketing.

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Speaker 1: They're going to work back on the farm, or they'd

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Speaker 1: be going to work in fertilizer, seed sales, agricultural banking,

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Speaker 1: and all the rest. By the way, I'm a big

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Speaker 1: fan of the president of your university, who at everything

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Speaker 1: he's done. I've known him since he was in the

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Speaker 1: Reagan White House in the eighties. Mitch Daniel is just

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Speaker 1: an astonishing person, and his policies have actually taken most

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Speaker 1: of the inflation out of university costed perdue in a

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Speaker 1: way that really should be an example for the whole

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Speaker 1: country to look at. He's a fantastic boss to have,

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Speaker 1: a real visionary and a real leader, I think. And

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Speaker 1: to your point, where all the other universities seem to

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Speaker 1: have gone right, we've taken a left, or maybe I

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Speaker 1: should say that the other way around. The other universities

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Speaker 1: have gone left, we've taken a right in the sense

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Speaker 1: that we've held down the cost of education. And under

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Speaker 1: Mitch Daniel those guidance, I think we're almost into ten

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Speaker 1: years now of no change in tuition, and you can

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Speaker 1: imagine that doesn't make everybody happy on campus. But I

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Speaker 1: think if we're thinking about our customers, about our students

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Speaker 1: and the families are coming here, that ability to still

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Speaker 1: provide an affordable education of something that I think is

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Speaker 1: really paramount. It's great. I'm hoping to get him to

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Speaker 1: agree to come and do a podcast explaining how he's

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Speaker 1: done it, because I think there are a lot of

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Speaker 1: people around the country who'd love to know how to

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Speaker 1: apply that kind of leadership to their institutions. Well, you know,

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Speaker 1: recently on a blog that you have at Jason Lusk

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Speaker 1: dot com, you spend some time talking about food price inflation.

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Speaker 1: Would you talk in general about what you see as

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Speaker 1: an economist as the key factors that push prices higher. Sure,

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Speaker 1: and you alluded to this at the onset here, but

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Speaker 1: we are in a bit of an inflationary moment here really.

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Speaker 1: For about the past six or seven months, we've seen

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Speaker 1: some pretty remarkable food price increases. There's a variety of

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Speaker 1: factors going on. One thing is COVID has introduced a

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Speaker 1: lot of costs and supply chain challenges in the supply chain.

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Speaker 1: So you know, it's been over a year ago now

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Speaker 1: when people went to the grocery stores and we're probably

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Speaker 1: surprised to see shelves empty. Is first, certainly the first

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Speaker 1: time in my lifetime I had seen that, And a

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Speaker 1: lot of that just had to do with a big

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Speaker 1: increase in demand to buy food through grocery stores instead

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Speaker 1: of through restaurants, and so all the supply chain challenges

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Speaker 1: of doing that get manifested in higher costs. So that's

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Speaker 1: part of what we're seeing and we're still working through.

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Speaker 1: That's still the case even a year and a half out,

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Speaker 1: we're spending ten to fifteen percent more through grocery outlets,

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Speaker 1: and we were prior to the start of the pandemics.

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Speaker 1: That's part of it, but it's more than that. Part

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Speaker 1: of it is we have higher retail food prices because

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Speaker 1: we have higher farm commodity prices. So by farm commodities,

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Speaker 1: I mean things like corn and wheat and hogs. Those

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Speaker 1: really took a dip at the onset of the pandemic,

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Speaker 1: but have just experienced some enormous increases really since this

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Speaker 1: summer and reaching levels that we haven't seen in about

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Speaker 1: a decade. And by the way, those prices we saw

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Speaker 1: about a decade ago, we're about the highest we've seen

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Speaker 1: in a really long time. So that maybe pushes the

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Speaker 1: question back further. Why are we seeing higher farm commodity prices?

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Speaker 1: And again it's a multifaceted answer, but a couple of reasons.

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Speaker 1: One is China. We're exporting a lot more to China

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Speaker 1: at the moment. They're buying a lot of corn, buying

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Speaker 1: a lot of pork. Part of that is because they've

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Speaker 1: made their way out of the pandemic challenges. Part of

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Speaker 1: it is residual working back out of the trade war

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Speaker 1: issues we had under the Trump administration, and some of

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Speaker 1: the commitments actually China had made during that trade war

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Speaker 1: they're now kind of delivering on, and so that extra

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Speaker 1: demand is pulling up farm commodity prices. Another couple of

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Speaker 1: factors there. We had some adverse weather conditions last year,

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Speaker 1: so there was this so called Draco's storm that they

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Speaker 1: had in Iowa last year, and then there was a

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Speaker 1: dry spell that reduced the supply corn and soybeans here

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Speaker 1: in the US. And then South America, which is another

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Speaker 1: big producer of corn and soybeans, also had some weather conditions.

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Speaker 1: So just inventory supply is relatively lower. So you put

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Speaker 1: those two things together. Then maybe one final thing is

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Speaker 1: we're kind of coming out of the hopefully coming out

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Speaker 1: of the pandemic. A lot of corn goes to ethanol,

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Speaker 1: So forty percent of corn goes to feeding animals. Another

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Speaker 1: forty percent roughly goes to ethanol production. So as people

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Speaker 1: are driving more getting back out on the road, that's

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Speaker 1: pulling up demand for corn as well. So what we

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Speaker 1: see is really across the board on most of the

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Speaker 1: major agricultural commodities as prices getting pulled up so roughly

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Speaker 1: at double where they were earlier this summer, and probably

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Speaker 1: fifty percent higher than where we were just at the

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Speaker 1: start of the year. Maybe one last thing, I know

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Speaker 1: I'm kind of rambling on here a little bit, but

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Speaker 1: labor issues. I mentioned costs in the supply chain, but

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Speaker 1: one big part of that is the price of labor

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Speaker 1: in It's a little paradoxical if you look at the data.

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Speaker 1: Employment is actually down in a lot of food sectors,

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Speaker 1: so food processing, certainly in restaurants, but also even in

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Speaker 1: retail grocery, but wages have been increasing quite dramatically in

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Speaker 1: some of those sectors. I say it's a bit paradoxical

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Speaker 1: because you'd say, if wages are increasing, why aren't, you know,

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Speaker 1: why aren't we adding more workers? And I think that's

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Speaker 1: a bit of the challenge we're in at the moment,

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Speaker 1: is people are having a hard time finding workers to

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Speaker 1: show up. I think some of that is a manifestation

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Speaker 1: of how generous our unemployment benefits have become, among other factors.

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Speaker 1: Maybe some workers may be, you know, fearful of getting

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Speaker 1: back out to work. You know, maybe it's just reallocating

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Speaker 1: labor from one sector of the economy to another. But

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Speaker 1: I think, you know, one of the explanations there has

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Speaker 1: to be that with the stimulus checks we've had and

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Speaker 1: with the rise and unemployment benefits, people can have been

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Speaker 1: able to stay at home and make a pretty decent living,

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Speaker 1: at least relative to the wages that get paid and

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Speaker 1: some of the food processing and food retailing sectors. But

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Speaker 1: that's kind of a mix in the censor. If you're

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Speaker 1: the worker who's now going to get paid more money,

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Speaker 1: that's cool, but it also means that there may be

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Speaker 1: a shortage of labor. And if you're a small business

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Speaker 1: trying to make ends meet, if you don't have an

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Speaker 1: ability to raise prices, the squeeze gets very real. I mean,

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Speaker 1: how does that automaly sort itself out? Yeah, you know,

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Speaker 1: I think this was an issue that came up when

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Speaker 1: there was some debate earlier in the year about raising

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Speaker 1: the federal minimum wage. And you're right, if you're fortunate

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Speaker 1: enough to keep your job, good for you when wages rise.

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Speaker 1: The challenge, of course, is particularly among the unskilled workers,

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Speaker 1: that if you don't have a job, then you know,

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Speaker 1: you don't get to capture the benefits of those higher wages.

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Speaker 1: You don't reap those benefits. As a business owner, those

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Speaker 1: costs have to go somewhere, and despite I think what

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Speaker 1: sometimes gets written about in the media, you know, these

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Speaker 1: are not high margin businesses, particularly in food retailing, food manufacturing, restaurants.

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Speaker 1: You know, these are very low margin businesses, and so

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Speaker 1: I don't think we can expect a lot of these

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Speaker 1: businesses to simply absorb the cost and go on. They

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Speaker 1: don't have a lot of market power, so to speak.

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Speaker 1: So what happens is somebody has to pay the bill,

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Speaker 1: and it's the customer often that picks up the tab

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Speaker 1: for that in the form of higher food prices. And

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Speaker 1: that's what we're starting to see a little bit at

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Speaker 1: the moment. I've been very struck close and I were

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Speaker 1: in Rome for three and a half years well, she

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Speaker 1: was being ambassador to the Vatican, and when we came home,

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Speaker 1: one of the most striking changes was the number of

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Speaker 1: people who were having groceries delivered at home. Does that

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Speaker 1: become a profit center for the grocery stores or is

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Speaker 1: it just a necessary cost in order to be compared

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Speaker 1: at a little bit of both. I think even prior

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Speaker 1: to the pandemic, there was an increasing trend towards more

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Speaker 1: food buying online. Some of that was you know, even

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Speaker 1: purchases to companies like Amazon and being delivered director of houses.

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Speaker 1: But then also the pickup services where you go to

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Speaker 1: the grocery store and pick up the groceries you've ordered online.

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Speaker 1: And then with the pandemic, that just jumped to a

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Speaker 1: whole new level. And you know, it depends on different

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Speaker 1: data sets you look at. But you know, any one

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Speaker 1: point in time, if you ask people if they bought

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Speaker 1: food online, you get you know, from a quarter or

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Speaker 1: two a half of people saying they've done that over

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Speaker 1: the past month. And so yeah, I mean, actually, if

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Speaker 1: you're a big food retailer, a big grocery you kind

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Speaker 1: of have to offer those services now if you want

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Speaker 1: to be competitive. Early on, maybe a couple of years ago,

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Speaker 1: it was more of a differentiating factor. You know, it

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Speaker 1: was a way to maybe capture some premium or some profit,

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Speaker 1: to offer some convenience to some of your customers. But

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Speaker 1: it's actually, I think at the moment, probably hard to

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Speaker 1: be competitive if you're not doing those things. And indeed,

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Speaker 1: you think about the extra layer that goes into that,

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Speaker 1: got somebody, you know, an extra person you're having to

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Speaker 1: pay in the store to go around in stock items,

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Speaker 1: package them for each individual customer, then carry them out

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Speaker 1: to your car. So there are extra labor costs that

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Speaker 1: are in there, and that's you know, gets back to

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Speaker 1: this discussion that we just had earlier about rising wage

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Speaker 1: rates and cost of labor. When you think about all this,

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Speaker 1: I'm old enough, I live through the sort of stagflation

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Speaker 1: and all that. But as I look at the numbers

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Speaker 1: right now, this is very modest inflation compared to what

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Speaker 1: we ended up with late in the Jimmy Carter years.

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Speaker 1: What do you see as a probable pattern over the

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Speaker 1: next year or two as the economy shakes itself out

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Speaker 1: and the unemployment numbers, the extra money he begins to stop.

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Speaker 1: I mean, do you expect, not to put words them out,

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Speaker 1: but somewhere between no inflation and really dramatic inflation. I mean,

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Speaker 1: where would you put it. It's a good question, and boy,

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Speaker 1: my crystal ball is a bit cloudy. So you're right

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Speaker 1: if you look at the overall inflation rate, so this

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Speaker 1: will be include food and everything, you know, year over year,

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Speaker 1: we were about two point six percent last month, So,

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Speaker 1: as you mentioned, in historical terms, that's very within you know,

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Speaker 1: standard conditions. One of the things we've probably got accustomed

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Speaker 1: to over the last five even ten years is inflation

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Speaker 1: has been really low. So you know, over the past

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Speaker 1: decade average probably one point seven percent or so on

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Speaker 1: a year over year increase, So we're running higher than

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Speaker 1: where we've been for the last decade. I think that's

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Speaker 1: part of what the response is we're seeing out there

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Speaker 1: at the moment is we've had unusually low rates of inflations.

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Speaker 1: Even though we have what i'd call at the moment

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Speaker 1: kind of low to modest rates of inflation, is much

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Speaker 1: higher than we've been seeing. So all that sort of

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Speaker 1: maybe on the positive side of things, maybe more worrying.

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Speaker 1: You know, the trend at the moment is really for

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Speaker 1: the past six or seven months ever steady increasing rates

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Speaker 1: in inflation from month to month. So the trend is

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Speaker 1: certainly very very positive at the moment, even though we're

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Speaker 1: still probably at an overall low level. The other things

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Speaker 1: that I think are a little worrying at the moment

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Speaker 1: are if you look at money supply, for example, so

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Speaker 1: the Federal Reserve tracks supply of money in the economy,

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Speaker 1: and that's also increased quite significantly. Again as we've had

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Speaker 1: extra stimulus payments, as we're talking about these huge infrastructure bills,

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Speaker 1: you know, those kinds of things. I think have some

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Speaker 1: economists worried that you add all this extra money in

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Speaker 1: the economy, that's going to make the value of any

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Speaker 1: individual dollar fall, which is what you know inflation is essentially.

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Speaker 1: And so you know, we're not there yet, We're not

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Speaker 1: anywhere close to the seventies, but I think there are

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Speaker 1: some signs that have at least a few economists worried

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Speaker 1: at the moment. I should say, on the food side

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Speaker 1: of things, by the way, back in the early stages

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Speaker 1: of the pandemic, so about a year ago, March of

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Speaker 1: twenty twenty to April of twenty twenty, that monthly change

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Speaker 1: in food prices at that point, that monthly change was

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Speaker 1: the highest monthly change we've seen in food prices since

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Speaker 1: the nineteen seventies. And we really haven't you come down

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Speaker 1: back off of that. So that really big monthly spike,

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Speaker 1: and then it's been sort of slow and increases since then.

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Speaker 1: And so we're certainly nowhere near the seventies at the moment,

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Speaker 1: but I think that it's something we definitely want to

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Speaker 1: keep an eye on and make sure that we don't

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Speaker 1: get there, because I think it is challenging if we

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Speaker 1: do get into this inflationary spiral. I can't quite get

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Speaker 1: a feel for him. It seems to me that Larry Summers,

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Speaker 1: the former president of Harvard, former Secutor of the Treasury,

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Speaker 1: who is a liberal Democrat, his warnings that the share

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Speaker 1: volume of liquidity about to be dumped into the system,

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Speaker 1: given everything else is under way, should almost certainly have

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Speaker 1: some kind of inflationary impact. Some other folks have written,

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Speaker 1: who are equally prestigious that actually they think the system

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Speaker 1: can more than absorb another couple of trillion dollars. Where

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Speaker 1: do you come down on that? How much do you

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Speaker 1: think we're faced with that kind of additional spending, inevitably

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Speaker 1: cheapening the value of the dollar. There seems to be

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Speaker 1: a bit of a divide amongst economists at the moment

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Speaker 1: in terms of weather and to what extent this extra

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Speaker 1: money that's going to hit our economy is going to

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Speaker 1: have some impact. I mean, as for me, I think

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Speaker 1: it's hard to imagine it not having some impact. I mean,

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Speaker 1: if you just believe in basic supply and demand, if

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Speaker 1: you increase the supply of money in federal spending that

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Speaker 1: has to have some impact. I think the question is

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Speaker 1: it going to have an unduly inflationary sort of impact

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Speaker 1: or something that's a bit more modest. And I think

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Speaker 1: the people that think it's going to be a bit

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Speaker 1: more modest seem to have a lot of faith that

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Speaker 1: our federal reserve can rain things in if inflation starts

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Speaker 1: getting out of control, that they can raise interest rates,

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Speaker 1: or that they have other levers they can use to

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Speaker 1: get the economy back under control. And maybe they're right.

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Speaker 1: I mean, I'm not a macroeconomist. I tend to focus

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Speaker 1: on food and agg that's my beat, but I still

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Speaker 1: do believe in just basic fundamentals of economics and supply

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Speaker 1: and demand. And again, if you increase that supply of money,

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Speaker 1: it's got to go somewhere. The other statistic that I think,

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Speaker 1: you know, it's been really interesting for me to see

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Speaker 1: as if you look at savings rates, so right now

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Speaker 1: we're in a recession. According to most official statistics, it's

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Speaker 1: a very very unusual recession. You know, it's not a

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Speaker 1: recession that has been caused by you know, a financial

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Speaker 1: crisis or by a collapse in consumer demand. It's a pandemic,

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Speaker 1: and so you can pump a lot of stimulus money

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Speaker 1: into the economy, but if people are unable or unwilling

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Speaker 1: to go out and spend it, the money just sits there.

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Speaker 1: And so one measure that the Federal Reserve puts out

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Speaker 1: there is a savings rate. And you might think it

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Speaker 1: a recession, what are people going to do. It's a

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Speaker 1: bad time. People are going to pull money out of savings,

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Speaker 1: but that's actually not what's happening. If you look at

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Speaker 1: savings rates, savings rates are increasing, have been increasing since

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Speaker 1: the pandemic started, and even at the moment, are still

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Speaker 1: sitting at you well above historical averages. So that money

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Speaker 1: is sitting out there. Maybe it's one thing that's causing

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Speaker 1: some of the rise we've seen in the stock market

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Speaker 1: over the past year or so. So you know, again,

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Speaker 1: if we kind of get this pandemic under control, people

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Speaker 1: are sitting on extra savings, that's even more demand that's

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Speaker 1: going to get dumped on the economy. And so you know,

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Speaker 1: I'm anticipating more inflation along the lines of what we've seen.

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Speaker 1: Is it going to get at, you know, to seventies levels?

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Speaker 1: I don't think we're there yet, but I certainly see

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Speaker 1: the conditions are there that we could have more inflation

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Speaker 1: that we're seeing at the moment. I was very struck.

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Speaker 1: We just bought a house, and the combination of relatively

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Speaker 1: easy money, low interest rates, and the tax structure of

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Speaker 1: California New York has just flooded South Florida with people

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Speaker 1: who have then, of course promptly driven up the price

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Speaker 1: of housing. But also in parallel, even more than the

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Speaker 1: price of housing itself, is the price of timber and

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Speaker 1: of products that go into houses. And I think this

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Speaker 1: is why Warren Buffett the other day said that we

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Speaker 1: were now in an inflationary spiral and that they fully

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Speaker 1: planned to pass on any pricing because it didn't see

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Speaker 1: any other way to deal with it. But when you

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Speaker 1: look worldwide, I'm not so sure that you're going to

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Speaker 1: have an economy and the larger global economy that's going

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Speaker 1: to sustain that kind of price increases, because it seems

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Speaker 1: to me that we have had an unusual ability, partly

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Speaker 1: by being the world's key currency, to generate resources in

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Speaker 1: a way that almost nobody else can. And so these

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Speaker 1: other countries I think are going to be trapped into

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Speaker 1: slower growth, less inflation, but also less employment, and that'll

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Speaker 1: have some impact on the whole system and may have

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Speaker 1: some impact on food commodity prices just because some of

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Speaker 1: the markets may not be there and because other places

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Speaker 1: may be dumping product because they just have their desperate

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Speaker 1: for money. I mean, do you see much of that

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Speaker 1: kind of behavior. Yeah. So the corrollary to that on

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Speaker 1: the food and axite is farmland market is pretty hot

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Speaker 1: right now. So again I think it kind of gets

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Speaker 1: back to this same idea. When there's money floating around

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Speaker 1: out there, it's going to try to find you know,

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Speaker 1: people are going to try to put it in assets

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Speaker 1: that are relatively fixed in supply, and you know, at

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Speaker 1: least in this country, we're not going to have a

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Speaker 1: lot more farmland, and so that the prices those tend

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Speaker 1: to get bit up. And that's sort of what we're

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Speaker 1: seeing at the moment. You know, one thing about food,

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Speaker 1: I think that that is you know, somewhat unique because

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Speaker 1: everybody has to eat. The other thing I think that's

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Speaker 1: really important on the global stage is that there's a

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Speaker 1: general relationship between income and food consumption, and lower income countries,

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Speaker 1: lower income households spend a larger percentage of their income

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Speaker 1: on food. So we tend to be blessed in this country,

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Speaker 1: in the United States, to have fairly high income, and

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Speaker 1: as a result, we spend a fairly small share of

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Speaker 1: our income on food, roughly ten depends on which number

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Speaker 1: you look at. But you get a lot of other

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Speaker 1: developing countries, you know, they may spend you know, thirty, forty,

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Speaker 1: sometimes even fifty percent. Those are the lower income country trees.

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Speaker 1: So when we talk about these rises and commodity prices. Earlier,

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Speaker 1: I was talking about the increase in corn and sweeping prices,

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Speaker 1: and you might think that's US prices, and it is,

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Speaker 1: But these agricultural commodity markets are really global markets, a

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Speaker 1: lot of trade and food and agricultural markets. The US

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Speaker 1: is a net exporter of agricultural products, meaning we send

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Speaker 1: far more agricultural products abroad than we import, so we

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Speaker 1: really do, in many ways feed the world. And when

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Speaker 1: those commodity prices increase, it really hits people in lower

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Speaker 1: income countries much more heavily even than it does for US,

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Speaker 1: because they're spending a much higher share of their income

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Speaker 1: on food. So I think that's you know, just on

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Speaker 1: the global stage, and when we talk about food price

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Speaker 1: and commodity price increases. I think, you know, the consequences

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Speaker 1: are really different for different parts of the world, and

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Speaker 1: I think in some ways particularly worrying and concerning whenever

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Speaker 1: we get commodity price increases because of what it does

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Speaker 1: to some of the people in some of the most

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Speaker 1: impoverished places in the world. You raise a really citive

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Speaker 1: and frankly infuriating topic. We were pretty close to somebody

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Speaker 1: you may know, Kip Tom who's a farmer and became

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Speaker 1: the American representative to the Food and Agriculture Organization, and

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Speaker 1: he would talk about how much the Europeans were opposed

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Speaker 1: to modern agriculture and tried to impose their political views

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Speaker 1: on very poor countries, for example in Africa, where in

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Speaker 1: effect they were being denied the scale of production they

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Speaker 1: would get with American seeds, etc. And were in effect

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Speaker 1: protecting people as they died of starvation. I mean, it's

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Speaker 1: really weird. Do you have any communication with colleagues in

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Speaker 1: Europe and any sense of why they are so opposed

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Speaker 1: to modern agriculture? I do. Wouldn't you mentioned Kep I

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Speaker 1: know him. I've been on his farm. In fact, the

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Speaker 1: last time I was there. I gave a talk for

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Speaker 1: his organization, and he was still in Rome, so he

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Speaker 1: was skyping back in or zooming back in is farm

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Speaker 1: meeting there. So it's great to have ambassadors like that

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Speaker 1: in the world. And yeah, I've spent time in Europe,

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Speaker 1: has sabbatical there, and yes, they you know, they are

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Speaker 1: very very much protectionists, more protectionists of their agricultural sector.

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Speaker 1: In some ways, it's because they can afford to be

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00:23:16,000 --> 00:23:17,879
Speaker 1: that way. I mean, you know, I mentioned earlier. They

433
00:23:17,960 --> 00:23:22,000
Speaker 1: also spend a relatively low share of their income on food,

434
00:23:22,280 --> 00:23:24,520
Speaker 1: and you know, they tend to have some ideals of

435
00:23:25,000 --> 00:23:28,800
Speaker 1: this traditional sorts of food that they want to preserve

436
00:23:28,840 --> 00:23:30,720
Speaker 1: and all that's fine and well, I suppose as long

437
00:23:30,760 --> 00:23:33,119
Speaker 1: as they're willing to pay for it. The challenge, as

438
00:23:33,119 --> 00:23:35,200
Speaker 1: you mentioned, is when when you kind of impose those

439
00:23:35,200 --> 00:23:38,480
Speaker 1: perspectives on other countries and we see that play out.

440
00:23:38,480 --> 00:23:40,800
Speaker 1: It's a really challenging issue I think in food and

441
00:23:40,800 --> 00:23:43,760
Speaker 1: agriculture is you know, you can basically hold up any

442
00:23:43,840 --> 00:23:46,600
Speaker 1: number of things, whether it's you know, genetically engineered seeds

443
00:23:46,680 --> 00:23:50,000
Speaker 1: or certain herbicides or any number of other practices as

444
00:23:50,000 --> 00:23:53,120
Speaker 1: a safety measure. Maybe an environmental concern, but you can

445
00:23:53,240 --> 00:23:56,679
Speaker 1: do that under the guise of protectionism essentially, and you know,

446
00:23:56,920 --> 00:23:58,920
Speaker 1: one or the other hard to tell, but certainly something

447
00:23:58,960 --> 00:24:01,840
Speaker 1: that happens a lot. And the African countries, they're much

448
00:24:01,840 --> 00:24:05,240
Speaker 1: closer to Europe geographically, and so Europe is a much

449
00:24:05,240 --> 00:24:08,120
Speaker 1: more important export destination for them, and so in many

450
00:24:08,119 --> 00:24:12,639
Speaker 1: ways European farm and food policy affects Africans much more

451
00:24:12,720 --> 00:24:15,520
Speaker 1: than us. And again I don't want to impose on

452
00:24:15,560 --> 00:24:18,200
Speaker 1: Africans our particular way of farming either, but I think

453
00:24:18,200 --> 00:24:20,600
Speaker 1: they ought at least have the same tools that we

454
00:24:20,760 --> 00:24:22,639
Speaker 1: have available to us. Whether they choose to use them

455
00:24:22,760 --> 00:24:24,800
Speaker 1: or not, I think it's really up to them. But

456
00:24:24,920 --> 00:24:27,919
Speaker 1: I think to deny them the same kinds of technologies

457
00:24:28,520 --> 00:24:30,720
Speaker 1: that we have available to us here in this country

458
00:24:31,160 --> 00:24:33,040
Speaker 1: is I think a point of view that I just

459
00:24:33,080 --> 00:24:35,720
Speaker 1: really can't get on board with. You get a sense

460
00:24:35,760 --> 00:24:40,680
Speaker 1: of is it primarily driven by ideology rather than say

461
00:24:40,720 --> 00:24:45,159
Speaker 1: economic self interest? Yes, I mean I think again, I

462
00:24:45,160 --> 00:24:47,960
Speaker 1: think there's a kind of an agrarian ideal in some

463
00:24:48,520 --> 00:24:51,600
Speaker 1: ways that some view that may be agriculture in the

464
00:24:52,000 --> 00:24:54,680
Speaker 1: early nineteen hundreds is at some kind of ideal state

465
00:24:54,840 --> 00:24:56,440
Speaker 1: or you know, and if we could just get ourselves

466
00:24:56,480 --> 00:24:59,560
Speaker 1: back to this type of agriculture, we'd be better off.

467
00:24:59,560 --> 00:25:02,320
Speaker 1: But I think belies. If you look at the data,

468
00:25:02,600 --> 00:25:04,600
Speaker 1: you know, we've had an enormous increase in the world

469
00:25:04,600 --> 00:25:08,320
Speaker 1: population since you know, the earlier part of last century.

470
00:25:09,040 --> 00:25:14,000
Speaker 1: And actually, despite sort of the Malthusian concerns that we

471
00:25:14,000 --> 00:25:17,000
Speaker 1: wouldn't be able to feed this growing world population, we've

472
00:25:17,000 --> 00:25:18,360
Speaker 1: been able to do it. In fact, we've been able

473
00:25:18,400 --> 00:25:21,000
Speaker 1: to make food more affordable for most consumers. And the

474
00:25:21,000 --> 00:25:23,480
Speaker 1: way we've been able to do that is by being innovative,

475
00:25:24,000 --> 00:25:26,760
Speaker 1: by having universities like Purdue where I work, developing new

476
00:25:26,800 --> 00:25:31,000
Speaker 1: technologies and trying to disseminate those technologies to farms. We've

477
00:25:31,040 --> 00:25:33,960
Speaker 1: actually not only been able to feed it growing world population,

478
00:25:34,000 --> 00:25:36,959
Speaker 1: feed it better in more ways than we have. And so,

479
00:25:37,040 --> 00:25:39,000
Speaker 1: I mean, my one fear, I think one concern I'd

480
00:25:39,000 --> 00:25:40,520
Speaker 1: have is if we're going to turn our backs now

481
00:25:40,600 --> 00:25:44,000
Speaker 1: on these technologies that have enabled this this kind of

482
00:25:44,000 --> 00:25:46,840
Speaker 1: prosperity that we've had. I think that's particularly concerning for

483
00:25:46,920 --> 00:25:49,080
Speaker 1: the future. And I think it's not just a concern

484
00:25:49,160 --> 00:25:51,919
Speaker 1: about larger world population and the ability to feed it,

485
00:25:51,960 --> 00:25:53,760
Speaker 1: but it's it's also, you know, a lot more concerns

486
00:25:53,800 --> 00:25:57,280
Speaker 1: these days about sustainability, and maybe even if we don't

487
00:25:57,320 --> 00:25:59,679
Speaker 1: need more food, if we can produce the same amount

488
00:25:59,680 --> 00:26:01,760
Speaker 1: of food we have now but using less land and

489
00:26:01,840 --> 00:26:04,919
Speaker 1: less water and and you know, less energy, you know,

490
00:26:04,960 --> 00:26:07,560
Speaker 1: that's that's a win too. But but you need technology,

491
00:26:07,640 --> 00:26:11,159
Speaker 1: you need innovation, you need entrepreneurshipreneurship to do all those things.

492
00:26:11,720 --> 00:26:13,800
Speaker 1: And so yeah, it's it's nice, I think to have

493
00:26:13,800 --> 00:26:16,600
Speaker 1: these quaint views of agriculture. There's a place for that

494
00:26:16,640 --> 00:26:18,280
Speaker 1: as long as people are willing to pay for it.

495
00:26:18,560 --> 00:26:20,679
Speaker 1: But I think we got to understand there's tradeoffs to

496
00:26:20,760 --> 00:26:22,680
Speaker 1: that kind of form of agriculture, and we've got to

497
00:26:22,680 --> 00:26:26,320
Speaker 1: be careful about those tradeoffs, particularly when they cause higher prices,

498
00:26:26,359 --> 00:26:28,639
Speaker 1: and think carefully about who it is that's paying those

499
00:26:28,720 --> 00:26:31,760
Speaker 1: higher prices. Yeah, because very often it strikes me it's

500
00:26:31,760 --> 00:26:36,199
Speaker 1: the poorest of the poor who ultimately get trapped in

501
00:26:36,240 --> 00:26:39,720
Speaker 1: this system and can't break out of it. If you

502
00:26:39,800 --> 00:26:42,879
Speaker 1: look at some of the poorest societies in the world,

503
00:26:43,119 --> 00:26:47,520
Speaker 1: they're often agrarian societies. A lot of the labor still

504
00:26:47,560 --> 00:26:50,720
Speaker 1: in agriculture. And you know, we're fortunate in countries like

505
00:26:50,760 --> 00:26:53,400
Speaker 1: the United States that you know, we it was painful

506
00:26:53,480 --> 00:26:55,200
Speaker 1: probably for a lot of folks at the time. It's

507
00:26:55,200 --> 00:26:58,080
Speaker 1: the history of my family that I look at grandparents

508
00:26:58,080 --> 00:27:00,440
Speaker 1: on both sides of my family. They were dirt poor farmers,

509
00:27:00,800 --> 00:27:03,960
Speaker 1: you know. My parents, as I mentioned earlier, were school teachers.

510
00:27:04,000 --> 00:27:05,359
Speaker 1: You know, they kind of moved off the farm and

511
00:27:05,440 --> 00:27:08,320
Speaker 1: did something different. So we've been able to grow our economy.

512
00:27:09,119 --> 00:27:12,720
Speaker 1: We created opportunities for people off the farm as we developed,

513
00:27:12,880 --> 00:27:15,119
Speaker 1: and so I think really the answer to development is

514
00:27:15,160 --> 00:27:17,840
Speaker 1: it to put more labor back into agriculture. It's to

515
00:27:17,840 --> 00:27:22,440
Speaker 1: find opportunities for people to expand and use their talents

516
00:27:22,480 --> 00:27:24,320
Speaker 1: in other ways. If we're going to do that, by

517
00:27:24,320 --> 00:27:25,919
Speaker 1: the way, we've got to have the more modern farming

518
00:27:25,920 --> 00:27:28,560
Speaker 1: technologies to enable that kind of prosperity to grow. And so,

519
00:27:28,760 --> 00:27:31,879
Speaker 1: you know, that's really the path to development is not

520
00:27:32,080 --> 00:27:35,400
Speaker 1: a move towards a more agrarian economy, but towards more

521
00:27:35,440 --> 00:27:40,679
Speaker 1: modern economy and finding ways to feed ourselves with fewer people. Listen,

522
00:27:40,800 --> 00:27:44,920
Speaker 1: thank you. This has been absolutely fascinating. You're in an

523
00:27:44,920 --> 00:27:47,280
Speaker 1: area and I think people this is one of the

524
00:27:47,359 --> 00:27:50,120
Speaker 1: things that kept kept trying to say to me over

525
00:27:50,119 --> 00:27:52,160
Speaker 1: and over again that this is one of the most

526
00:27:52,160 --> 00:27:57,640
Speaker 1: exciting and technologically advanced areas of American economy, and we're

527
00:27:57,680 --> 00:28:02,080
Speaker 1: doing just more and more amazing things, often with fewer resources,

528
00:28:02,080 --> 00:28:05,320
Speaker 1: and so you know, you're part of that revolution. You're

529
00:28:05,359 --> 00:28:10,320
Speaker 1: a great institution for providing leadership for agriculture in the Midwest.

530
00:28:10,400 --> 00:28:13,240
Speaker 1: So it's really great that you would spend time with us. Yeah,

531
00:28:13,240 --> 00:28:17,760
Speaker 1: I appreciate you having me on. I want to thank

532
00:28:17,840 --> 00:28:21,040
Speaker 1: my guest doctor Jason Lusk. We'll have a link to

533
00:28:21,040 --> 00:28:23,240
Speaker 1: his website with all of his research on our show

534
00:28:23,280 --> 00:28:26,920
Speaker 1: page at Newtsworld dot com. Will also have a link

535
00:28:26,960 --> 00:28:32,040
Speaker 1: to his most recent book on Naturally Delicious. You can

536
00:28:32,080 --> 00:28:34,479
Speaker 1: read more about the recent rise in prices on our

537
00:28:34,520 --> 00:28:38,800
Speaker 1: show page at newtsworld dot com. Newtsworld is produced by

538
00:28:38,840 --> 00:28:44,320
Speaker 1: Gingrich three sixty and iHeartMedia. Our executive producer is Debbie Myers,

539
00:28:44,840 --> 00:28:49,640
Speaker 1: our producer is Guarnsey Sloan, and our researcher is Rachel Peterson.

540
00:28:50,440 --> 00:28:53,640
Speaker 1: The artwork for the show was created by Steve Penley.

541
00:28:54,480 --> 00:28:58,640
Speaker 1: Special thanks to the team at Gingrich three sixty. If

542
00:28:58,680 --> 00:29:01,479
Speaker 1: you've been enjoying Newtsworld, I hope you'll go to Apple

543
00:29:01,520 --> 00:29:05,240
Speaker 1: Podcast and both rate us with five stars. And give

544
00:29:05,320 --> 00:29:08,600
Speaker 1: us a review so others can learn what it's all about.

545
00:29:09,520 --> 00:29:12,040
Speaker 1: Right now, listeners of newts World can sign up for

546
00:29:12,120 --> 00:29:16,920
Speaker 1: my three free weekly columns at gingwiche three sixty dot

547
00:29:16,920 --> 00:29:21,040
Speaker 1: com slash newsletter. I'm Newt Gingrich. This is news World