Middle East crisis will affect U.S. agriculture industry

22-Feb-2011 | News-Press Release


COLLEGE  STATION – Fallout from the crisis in Libya and the Middle East could
put pressure on U.S. agricultural production due to escalating fuel  costs,
according to a Texas AgriLife Extension Service economist.

“Libya has the largest crude oil reserves in Africa, and it’s a flash
point,” said Dr. Parr Rosson, AgriLife Extension economist and director  of
the Center for North American Studies at Texas A&M University.  “The
concerning thing is what it’s going to do at a time when we’ve gone  through
a couple of years where (crude) prices have been relatively  stable. This could
put some real economic pressure on costs in  agriculture.”

If sustained, higher petroleum prices would result in higher  agricultural
commodity prices as well, Rosson said. That would be passed  on to the consumer
resulting in higher food prices.

“The whole overarching issue of instability in that region is  interesting and
amazing at the same time,” Rosson said. “This all  started with a small
country (Tunisia) and because of instant  communications, that being social
media, it’s now spread throughout a  large portion of the Middle East and even
evidence of some unrest in  China.

“That’s very important as well. All of this comes on the heels of one  of
the worst recessions we’ve experienced in decades. We are extremely
vulnerable as a manufacturing industry, and the agricultural industry in
particular because of energy costs.”

Rosson said this strengthens the discussions of utilizing natural gas as an
alternative energy source.

“Our saving grace in Texas is natural gas prices,” he said. “Converting
to natural gas over the longer term is a real plus for Texas because of  our
reserves and the ability to produce natural gas. There’s a lot of  incentive
there to effectively produce and utilize that very important  resource.”
Farmers already regularly use natural gas to power irrigation systems, Rosson

Contact: Blair Fannin, 979-845-2259, b-fannin@tamu.edu

Dr. Parr Rosson, 979-845-3070, prosson@tamu.edu

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