The Modern Acre 421: Understanding "The Big Shrink" and Farmer Sentiment in Agriculture
Aug 19, 2025
In this engaging discussion, Matt Woolf, an ag economist at Terrain, sheds light on the California specialty crop market. He reveals how nut pricing is stabilizing while vegetable pricing is normalizing post-COVID. The Big Shrink report explores the impact of declining population on agriculture, raising concerns over low fertility rates. Woolf emphasizes the importance of transitioning from quantity to quality in exports. Additionally, he addresses the struggles farmers face with input costs and regulatory challenges, as well as the rapid advancements in ag tech.
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Commodity Price Normalization And Volatility
- Post-COVID, vegetable prices are normalizing while nut prices, especially almonds, have recently improved then swung down after a USDA estimate.
- Market liquidity is low in-season, increasing price volatility into 2025.
USDA Estimates Face Abandoned-Orchard Bias
- USDA crop estimates use orchard surveys and on-site counts, but abandoned orchards make bearing-acre estimates harder.
- Terrain has seen USDA overestimates recently, so reported receipts may bias high if harvests are early.
Population Peak Will Reshape Long-Term Demand
- Global population growth has historically powered agricultural demand and supported rising revenue per acre and land values.
- Terrain forecasts a global population peak ~2065 at 9.4 billion, then sustained decline, which reshapes long-term demand.