“There’s always money in the banana stand.”
That quote, from the quirky sitcom, Arrested Development, would run through my mind as I passed a row of “dukas,” or roadside stands in Kenya, lined up, one after another, all selling bananas. I’m not talking three stands in a row. I’m talking 10.
One of the things I have always loved about Kenya is the entrepreneurial spirit of the Kenyan people. They try new things and embrace change. Especially if it means their hustle puts food on the table on a regular basis, particularly for those living hand to mouth. Sometimes, though, it seems to backfire.
It would go like this. One day, you go by a street corner, and one guy has spread out a blanket and placed four or five clusters of bananas on display.
The next day, you pass the same street corner, and there are three banana stands, run by the original vendor, as well as another man and a woman, set up right next to him. A week later, there are eight stands lined up on that street corner. All selling bananas.
It’s a fascinating thing to watch. But isn’t it what we all do in production agriculture, to a larger scale? When markets are strong and demand exceeds supply, it’s a good time to be in (you name it) commodity. Everyone hops on board.
It’s good, until you hit a rough year or two. Then, something else emerges. And so it goes.
The same boat
At a dairy meeting, hosted by U.S. Rep. Glenn “GT” Thompson in Cambria County, Pennsylvania, Aug. 12, I listened to dairy farmers talk about their situation with federal and local officials. I realized that they’re facing a situation not that different from mine, on my sheep farm. The lamb we raise hits a certain market. We work with a processor, one of the few large-scale operations left in the U.S. for lamb.
We rely on fair pricing from that processor. We rely on fair pricing from the auction, when we have to send lambs there. But if that processor goes out of business for any reason, we’d be stuck. The weekly auction can be a gamble, too.
So, my mother and I have been kicking ideas around. How do we diversify? What will our market look like in 10 years? I don’t mind providing a commodity or working within a production-oriented system. That’s how the world eats — when farmers grow affordable, plentiful food for everyone.
But I also want to make sure we’re exploring every possibility. We are constantly talking with other sheep farmers, retailers and just … other people. Everyone eats. Everyone shops. Everyone has ideas.
The next thing
At that Aug. 12 meeting, I asked U.S. Secretary of Agriculture Sonny Perdue what the administration hoped to see accomplished, if China was no longer a trading partner.
Perdue pointed to India, saying it “has almost as many mouths as China does.” That market is more protectionist though, so it will take work, he said. He also named Japan — where there have been recent inroads for U.S. meat exports — Morocco and Korea as promising, up-and-coming trade partners. “I’d rather have a lot of smaller markets than one larger market. That’s just a business principle,” he said.
All of that is fine. Market diversity is always better than one large one. I just hope farmers consider all of the long-term angles, for their own farms, and not relying on a national trade policy to bail them out — because that’s just as dangerous as a country relying on one trade partner. Perdue pointed to the $16 billion in tariff bailouts approved this year for farmers. But where does it end?
Trade roller coaster
“The Chinese have a saying: They know how to eat bitter. They are proud of it. They will never make the mistake of depending on the United States again,” a former Mexican diplomat to China told writer Art Cullen, in The New Food Economy Aug. 12. Cullen concludes that it may drive more farmers to engage in more conservation practices and rely less on export-driven markets.
According to an evaluation by the Pierson Institute for International Economics, published Aug. 14, two new rounds of tariffs, set for Sept. 1 and Dec. 15, will hit multiple sectors, especially retail. And it could be a sign that tariffs aren’t going anywhere. “By putting off the next two rounds until the import surges have already arrived to stock this year’s back-to-school and winter holiday shopping seasons, President Trump may be coming around, albeit belatedly, to the economic evidence on the costs of his trade war,” the Pierson analysis states. “Thus far, it is American consumers and companies — and not China — who are bearing the burden of his tariffs.”
I’m not about to dive into politics on this one. Just as Perdue says it’s not good business to rely on one thing though, I would urge those of us in production agriculture to look ahead. How can we be nimble in a changing world?
About those bananas
Going back to the banana stand, how do all of these people stay in business? An interesting phenomenon would happen. If you offer a 100-shilling note (roughly $1) for a 10-shilling banana, the vendors would confer among themselves to get the right change. It may not have meant they were making the most money, but they were working together. If one was short, another helped out.
Sometimes, you strike up a conversation with one of the vendors and find that man or woman to be a pleasant sort. You learn about families and how the day is going. You develop a friendship, so you go back to that vendor, again and again — regardless of how many other banana vendors there are, or even regardless of what the others are charging. I don’t know if there is always money in those banana stands, but it seems like there were some lessons to learn there.
Regardless of how the U.S.-China trade war shakes out, for good or bad for U.S. agriculture, trade relationships won’t be the same. Existing markets will fade away. New ones will emerge. Time will tell how viable they are.
In the long run though, it’s up to you and me, not nations, to find solutions. I’ll let you know what we decide on our farm. I suspect it will have to do with the people we know and the relationships we’ve built with customers and fellow farmers that will open new doors to opportunity.
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