Corn Belt just as diverse now as it was in 1930

Corn Belt just as diverse now as it was in 1930

University of Illinois farmdoc daily asks: Is the Midwest farm economy too specialized? How diverse is Corn Belt agriculture?

Contrary to popular belief, the Corn Belt now is just as economically diverse as it was more than 80 years ago, a University of Illinois economist writes for farmdoc daily.

Related: Ag Census: Farms are Fewer, But More Diverse

Economist Todd Kuethe says that in the Corn Belt – defined as Illinois, Indiana, Iowa, Missouri, and Ohio – livestock's share of the value of ag production has declined from 76.3% to roughly 37.3%, or about 39%.

At the national level, the animal sector's share of value of production has remained relatively stable, declining slightly from 57.4% in 1930 to 45.5% in 2013.

COWS OR CORN? University of Illinois farmdoc daily asks: Is the Midwest farm economy too specialized? How diverse is Corn Belt agriculture?

Kuethe says many interpret the Corn Belt's shift away from livestock as declining diversity. The trend has been criticized for a number of reasons, he says, including adverse environmental impacts and increased vulnerability to crop price cycles.

But economically, Kuethe says the diversity of commodities produced in the Corn Belt has changed very little since the 1930s. He points to the results of a calculation known as Shannon's Diversity Index, which tracks the abundance of various species in a given location.

Related: USDA's Vilsack says ag groups need to stop fighting each other

The Index increases when the number of species increases, or when animals are spread more evenly across species.

For farmdoc daily, Kuethe calculates the Index using cash receipts for various commodities as provided by the USDA Economic Research Service. This calculation "measures the degree to which the agricultural economy is comprised of one or many commodities and the relative share of total cash receipts by commodity," he explains.

Corn Belt just as diverse now as it was in 1930

Ultimately, the diversity index would suggest that the farm economy in the Corn Belt region has been relatively stable, decreasing in diversity from 1930-1970, but increasing through 1970 to the early 2000s.

"A slight uptick in 2013 showed that, in that year, Shannon's Diversity Index for cash receipts by commodity type was the same as it was in 1930," Kuethe writes, noting that while the Corn Belt is less diverse than the U.S. as a whole, the difference has been consistent.

See the original post, Is the Corn Belt Farm Economy too Specialized? by Todd Kuethe on farmdoc daily


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