Dr. Doom on demand: Hart sees bears just ahead, bulls down the road

WEST LAFAYETTE, Ind. — Dr. Doom sees a bit more gloom, but also room — for improvement.

Chad Hart, Iowa State University Extension ag economist and crop markets specialist, has often been dubbed “Dr. Doom” for his sometimes less-than-cheery outlooks for U.S. agriculture.

For the moment — and the next year or so — that title will stick, at least as far as his outlook for U.S. ag is concerned.

“When am I becoming bullish? I’m going to say 2022,” said Hart, speaking at the Purdue University Top Farmer Conference.

Hart’s answer was to an audience member’s question. Earlier, Hart expressed a decidedly non-doom laden summary of his outlook.

“I’m a short-term bear, a long-term bull when it comes to U.S. agriculture. We’ve been through a rough patch for the last few years. It looks like the rough patch will continue at least for the next year or so, but the idea is there are brighter days ahead. There is demand that is building for our products. It’s a matter of managing to get to that time,” Hart said.

As some markets grow, others will shrink and one market that is experiencing that is the fuel market, including biofuels.

“Electric vehicles are starting to nibble away on the edges of fuel demand,” Hart said.

Hart pointed the audience’s attention to his home state of Iowa.

“I’m from Iowa State, so central Iowa, Ames, dead center of the state. What I’ve been noticing as I travel around the state these days, I actually find a heck of a lot of electric charging stations out in the middle of nowhere, Iowa. There’s this town called Dows, literally 40 miles north of me, it has 150 people in it. It has eight Tesla charging stations in it,” Hart said.

How people use vehicles and how much they use them also has changed and affected fuel demand.

“Probably the biggest change is the generational change in how we use our cars. When I was 16, I got that vehicle to drive away from my parents. Our main job as teenagers was to drive, to burn gasoline,” Hart said.

How teenagers, like Hart’s 17-year-old son, communicate and connect has changed and vehicles are no longer a major part of the relationship.

“I know where he’ll be by the time I get home. He’ll be upstairs in his room on his bed with his laptop on, headphones plugged in, screaming at the top of his lungs. Why is he screaming? Because he and his friends are online playing whatever game and trying to coordinate. That’s how they communicate these days. No gasoline involved,” Hart said.

Those changing dynamics are having an immediate impact on fuel demand.

“We are starting to see the fuel market shrink because a lot of different things are happening, and that is limiting how much biofuels can really grow,” Hart said.

The global demand for U.S. ag products is strong and will remain strong and increase and future demand may come from countries that aren’t even on the radar now as major players for U.S. farm products.

“When you look at the top 10 populations, we always concentrate on China, but I want you to start thinking beyond them, as well. I like to say, in 15 years, we are going to look at India like we look at China today. If you look beyond that, I’m looking at place like Nigeria,” Hart said.

Along with population growth in places like India and nations in Africa, incomes also are growing there, making those markets more attractive to exporters.

“Not only do you need those mouths to feed, but more importantly, those mouths have to have dollars. If you are going to trade with those nations, it’s not just that they have to be there, they have to have the money to spend,” Hart said.

When it comes to increasing global demand for protein, Hart said that plant-based proteins could actually work together with the animal-based protein sector to bolster U.S. farmers.

“I see potential for both markets to continue to build and grow. I look at plant-based proteins as an opportunity to help bolster our crop markets right now. One of the challenges we need to get fixed right now, we are basically a bi-culture here, corn and soybeans, where we used to be corn, soybeans, wheat, cotton, rice. We used to have a more diversified portfolio. I think the move to plant-based proteins helps us rediversify across a few more crops, which can be helpful to all crop agriculture,” Hart said.