Agriculture may be the unlikely and surprising engine that helps drive the Mankato area economy in the year ahead.
Recent developments put agriculture and agri-processing at the forefront of regional growth industries. A study a few years ago by the Southern Minnesota Initiative Foundation determined that agri-processing and related crop and livestock production in southern Minnesota offers an integrated industry, with much of the infrastructure for growth already in place.
Demand for goods produced by the agri-processing industry were on a steady pace. With recent passage of the federal energy bill, demand for those goods — especially biofuels, such as ethanol and biodiesel — will only boost prospects for agriculture’s future in the region.
Already, the push for renewable fuels is spurring economic activity. Research money to develop vehicles and technology for alternative fuels has been pouring into Minnesota State University’s automotive engineering program. Two or three of the largest ethanol plants in the state are located within 30 miles of Mankato. A large biodiesel plant is within 60 miles. One of the largest dairies is within 20 miles.
Federal and state mandates for renewable fuels production helps entrepreneurs know that the capital they put forward has a bit of a safety net. That should attract the much-needed risk capital.
And the mainstay of southern Minnesota agriculture, corn and soybean production, has been bolstered by recent run-ups in commodity prices. Soybean prices hit a near all-time high this week, based on better than expected prospects for exports. As many Third World economies modernize and as we keep trade open to places like China, the demand for agricultural products around the world will remain strong.
Congress and the president must do their part not to interfere with the growth of agriculture. Unfortunately, the expiring of fast-track trade authority for President Bush last year hurts our ability to increase exports. Congress should renew that authority that Democrat and Republican presidents have had during the past decade when exports have boomed. Congress also should approve a farm bill that allows market signals to work, and doesn’t take scarce resources to unnecessarily subsidize those in agriculture who can operate without subsidies.
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