Leaders in Michigan’s food and ag industry remain optimistic about their businesses and the ability of our economy to continue climbing. Their optimism comes from results of the Michigan Agriculture and Food Index (MAFI), shared during MSU’s annual Ag Expo.
The July MAFI is the third of its kind. It gauges the current business climate of the food and ag system by surveying 100 related businesses. A 100 rating is neutral; above 100 signals a positive outlook, and below 100, negative. The MAFI has remained steady at 145 or higher since the initial survey in April 2013. The related economy rating also shows continued growth—from 115 to 120 as of January 2014, and up to 133 in the July survey.
“It boils down to this: the general economy is catching up to agriculture,” said Chris Peterson, project leader, and director of the MSU Product Center. Even banks that have typically not lended to ag businesses are entering the realm.
The MAFI is released every March and July, and also rates three other food/ag areas: current sales are up slightly to 133, the job outlook hung steady at 126, and investments rebounded from 107 to 116.
“Globally, when people have more discretionary money, the first thing they do is improve their diet, especially for their children,” said a dairy industry representative. The growing middle class in places like China are looking for more nutrient-rich foods. “We believe demand for dairy products will continue to grow in new areas around the world as incomes increase, and that will have positive impacts on dairy producers around the country and in Michigan.”
Survey respondents said what keeps them up at night are government regulation and policy, risk management, and finding good seasonal and full-time labor. But in the newest survey, several reported that road conditions and rural internet service are important.
“We keep encouraging young people to get involved in agriculture because it is a high-tech career,” explains Bill Knudson, an MSU Product Center marketing economist. “But for them to be interested, they have to know that all technology is available. High-speed internet access is a must for them.”