Thinking About Commodities and the American Defense Industrial Base

One of the defining attributes of American excellence that sets us apart from other nations is our abundance of natural resources. It is essential to remember that the ability to cultivate and process these resources via industrial technologies form the backbone of America’s war-fighting capability.

The 10,000 foot view is that a straight-forward method for increasing US war-fighting capability includes:

A) Extracting more natural resources and creating more agricultural output to form a basis for an increase in overall American commodities production.

B) Increasing the size and sophistication of the American defense industrial base, which uses these commodities to produce essential war-fighting goods.

When examining our near-peer competitors, it’s important to note that one of their core disadvantages lies in their varying levels of exposure to non-abundant resources. To put it simply: food, oil, coal, gas, and fertilizer are all essential to these near-peer competitors and industrialized nation-states, most of which import multiple categories.

While the US is not failing in its commodity production or industrial output, we can certainly do better. Consider the case of food production. According to the USDA, crop yields are roughly 4 times larger today than 1947. At the same time, the amount of actively-cultivated American farmland has significantly decreased. With the rise of the American service economy and the growth of cities, many historic family farms have been abandoned. In some states, there has been significantly more farmland than the market can handle, resulting in farm abandonment and a return of the property to its natural state.

While the overall agricultural production picture is rosy, the increased consolidation of production does raise concerns about resilience and efficiency. Having a less-centralized agricultural base, with a wider diversity of crops that are all produced at immense scale, would be a beneficial approach to ensuring stability in the face of unforeseen challenges. As an example of the benefits of decentralization - if the availability of fertilizer for American farmers were suddenly impacted, having more overall land in a productive posture versus less could mean the difference between manageable food-shortages and localized famine.

As I continue to collect my scattered thoughts on further strengthening the American defense industrial base, I’ll be paying particular attention to areas where I see greenfield opportunities or existing process improvements. At least for me, the promotion of increased natural commodity production, the growth of American self-sufficiency, and the decentralization of production capacity are areas of interest worth exploring.

Note: This essay was originally published off-site on February 23, 2023. This is a tool-assisted and agent-assisted product and has been edited for clarity.