Ag production vs widget production

In a theoretical world, one place is as good as another for producing goods. But agriculture is where you find it, and for good reason. That’s just one of the factors that makes the ag market behave differently from the widget market. It’s also why some form of risk-mitigation through government farm programs are a good idea, say two ag-policy analysts. Rural and urban residents have seen this happen time and time again. A building that originally may have been built for a general mercantile store has often housed a restaurant, insurance agency, hardware store, and clothing store over a century of use. It may be torn down so the community can have a mini-park. Meanwhile the insurance agency may have built a new building more suited to its changing needs. The same is not true for agriculture, particularly crop agriculture. Crop farmers tend to use all of their acres all of the time. Total planted acres remain remarkable stable over time. Farmers may change the mix of crops they grow, but they are unwilling to allow acres go unused. They typically will plant cropland to something. In response to several years of higher crop prices, farmers are relatively quick to convert some of their pasture land to cropland as we saw during the last decade. The shift in the other direction does happen, but historically the change has been exceedingly slow. When a farmer goes bankrupt or otherwise leaves the industry, the land does not. It is sold to another farmer and remains in production, often with higher yields. Unlike the building that can be used by businesses in different economic sectors, when land on the edge of town is converted to a subdivision or paved over for a shopping mall or small industrial plant, the change is virtually permanent.