Ag economy heading for a strong finish in 2004.

These are optimistic times for American agriculture and the businesses that support it. The U.S. farm economy is the strongest it has been in years, according to recent data from the United States Department of Agriculture. Virtually every sector--both commodities and livestock--is recording record production and profit levels.

"This is good news for both producers and the companies and media who serve them," said Lyle Orwig, chief executive officer of Charleston | Orwig, a marketing communications agency based in Hartland, Wis. and NAFB Board member.

Orwig points to the fact that higher prices and record production yield revenue and profit increases. That allows producers to pay down debt, increase capital spending and enjoy a good deal of discretionary income. "The industry isn't yet booming, but with current trends we'll see a lot of producers smiling this fall," Orwig said.

And there are good reasons for his optimism.

The USDA reported in May that its April price index was the highest since the agency began keeping statistics in 1910. The USDA has said it expects 2004 farm products to top $215 billion.

The livestock sector is also experiencing record price increases. The USDA estimates 172 billion pounds of milk will be produced in 2004. The all milk price is expected to be $16.13 per hundredweight. Both those levels would be records.

While production increases are important, it is farm income that is perhaps the most important indicator of financial health, Orwig notes. In 2003, USDA reported net cash farm income was $63 billion, a $2 billion increase over 2002 and that farm equity reached $1.16 trillion in 2003.

The farming trends bode well for suppliers whose primary markets are in agriculture.

"With more buying power out there, I predict we'll see an upturn in overall marketing spending," said P. Lynn Balinas, executive vice president of Charleston | Orwig and a veteran of agriculture marketing. "Print publications and broadcasters should see ad revenue climb. Buyers should see more promotions and competitive pricing as marketers try to win their business. The smartest marketers will see some big gains in market share."

And that's just in the domestic market. The expanding export market is another bright spot. The North American Free Trade Agreement (NAFTA) has been a major force. The USDA estimates in 2004 the U.S. will sell $18.5 billion in farm commodities to our NAFTA trading partners. In the 10 years since NAFTA was implemented, agriculture sales have risen an average of $800 million year to NAFTA countries.

Balinas says the expanding economy--domestically and overseas--makes the marketer's job more complex and demanding. "Marketers suddenly have a lot more choices on how to allocate spending. "Where will it have the most impact? The key to success is in developing the right tools to track the Return on Marketing Investment (ROMI)."

If the rest of 2004 is as good as the first half, producers and marketers and broadcasters alike will be well-positioned for a new season of growth.