By DAN WHEAT
WENATCHEE, Wash. -- U.S. agriculture is having the best five years of the last half century but things can turn quickly in volatile economic times, Wells Fargo bank's chief agricultural economist told Washington tree fruit growers.
Michael Swanson, of Wells Fargo's Minneapolis, Minn., office, gave the keynote speech at the Washington State Horticultural Association's annual meeting.
Everything in the global economy is connected, "we just don't know how," Swanson said. Many economic factors include currency exchange rates, population and income growth, he said. Policy and trade disputes can turn on and off overnight, he said.
Wells Fargo, headquartered in San Francisco, is the nation's fourth largest bank and the largest agricultural lender with $38 billion in ag loans, Swanson said.
Spending cuts and tax increases are needed to control U.S. deficit spending, which is not sustainable, Swanson said.
The Federal Reserve is making capital cheaper but governmental policy is making labor more expensive so businesses aren't adding jobs but looking to technology, he said.
As prices for agricultural goods have increased so have production costs, he said.
"Farmers want big gains. It won't happen. With risk rising, you need more working capital and more margin management than five years ago," Swanson said.
Other opening session convention speakers included John McQuaig, founder of the Wenatchee business consulting and CPA firm McQuaig & Welk. He drew comparisons between his mountain-climbing experiences and business development, saying both need vision, analysis of strengths and weaknesses, planning and team work.
Nancy Foster, president of the U.S. Apple Association, said compromise, once foundational in Congress, is almost a dirty word as agreement on deficit reduction is elusive.
She pointed to association success in elimination of Mexican tariffs and keeping E-Verify from passing the House. An apple grower told Speaker John Boehner that E-Verify without an adequate guestworker program would hurt agriculture and Boehner told the E-Verify sponsor that agriculture needed to be accommodated, Foster said.
She said apples and specialty crops have been aided in the farm bill by a long friendship between the association's past chairwoman, Julia Rothwell, of Michigan, and Senate Agricultural Chairwoman Debbie Stabenow, D-Mich.
Early in the morning outside the convention hall, Dick Baird, a Cashmere pear and apple grower, said his biggest concern is just making money. He said he had adequate labor during this fall's picker shortage.
Efren Larios, manager of an 800-acre AgriMACS Inc. orchard in the Tri-Cities, also said he had no picker shortage but that Yakima and Mattawa, among other areas, did.