2001 farm outlook at least improved over past years

Cautiously optimistic. If we had a nickel for every time we've heard that phrase during the winter meeting season, we all could retire to some exotic locale. But at least it's an improvement over the economic outlooks of other recent years.

Low prices, coupled with extreme drought during the past three years, have battered the morale, not to mention the pocketbook, of the typical Southeastern farmer. Now, if we're to believe the most current forecasts, there's finally reason for "cautious optimism," at least for some commodities.

According to the "2001 Georgia Farm Outlook and Planning Guide," a report prepared by the University of Georgia Department of Agricultural and Applied Economics, Georgia's slumping farm sector is expected to stabilize this year.

Farmers still don't have a lot of extra money, says Bill Givan, a University of Georgia economist. "It's pretty much the same across the board. Farmers just didn't get by (in 2000) on the crops they grew. They're just hanging on right now," says Givan.

The report states that personal farm income will continue to drop slightly next year, mainly due to low commodity prices, higher costs and a decrease in government payments. However, due to expected trade growth, the longer-term projections look good for agriculture. Net farm income is expected to climb in 2002 and continue to grow into the future, according to the report.

An overview of the major commodities indicates a strengthening in the state's farm sector. A tightening of world supplies coupled with an increase in demand will encourage cotton prices to stabilize and possibly rise in 2001. The U.S. cotton acreage this year is expected to equal that of 2000. If this holds true, near-record exports will be needed to avoid an over-supply.

Peanuts, meanwhile, are expected to remain at government support prices. The 2001 quota - at 1.18 million pounds - remains at last year's level, and foreign competition will continue to put pressure on the U.S. peanut industry. U.S. producers hope to offset this with higher yields and increased demand.

A slight decline in ending stocks and in the carry-out stocks-to-use ratio could be indications of strengthening prices for Southeastern corn producers. The 2001 corn crop, according to the report, is expected to average $2.10 per bushel compared to an average of about $1.90 per bushel for the 2000 crop. Georgia prices are expected to average about 25 cents per bushel more than the national average.

And, even though ending stocks and the stocks-to-use ratio for soybeans are expected to rise, prices probably will improve slightly, states the report. After a season-average price of $4.70 for the 2000 crop, soybean growers should see prices more in the $5 per-bushel range this year, despite ending stocks of 350 million bushels and a stocks-to-use ratio of nearly 13 percent.

Turning to wheat, ending stocks are expected to drop only slightly while the stocks-to-use ratio should remain high, at about 33.5 percent. Season-average prices for 2001, states the report, should increase slightly to about $2.80 per bushel. This is compared to the $2.60 per-bushel received for the 2000 wheat crop.

Georgia cattle producers should find 2001 to be the most profitable year of the past 10, provided forage-producing rain accompanies higher cattle prices, predict the Georgia forecasters. With beef demand improved and cattlemen returning to herd rebuilding, cattle producers are expected to have the best of both worlds in 2001.

Georgia growers apparently have found a market window for fresh-market vegetables, even in a competitive environment, states the report. Contract acreage for processing vegetables, however, is lagging behind other production regions due to a lack of processing facilities and infrastructure. Substantial acreages of lima beans, snap beans, cabbage, cantaloupes, sweet corn, cucumbers, spring onions, tomatoes and watermelons are expected this year.

But improvements in crop prices could be offset by continuing higher costs for fuel, fertilizer and borrowed money, say the economists. Depending on fuel prices, which show no immediate signs of lowering, it will cost farmers two to 10 percent more to produce their goods in 2001.

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