Published on 12/20/00

2001 Outlook Upbeat for Georgia Farmers

With low prices and extreme drought, the past three years haven't been kind to Georgia farmers. However, economists say better days could be ahead for the state's agriculture.

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 will stabilize in the coming year.

Georgia consumers will continue to benefit, too. Because of an oversupply of many major farm commodities in the world, food prices will likely increase at less than the rate of inflation.

Row-crop Farming Still Tough ...

"Farmers still don't have a lot of extra money," said Bill Givan, a UGA economist who contributed to the report. "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 sort of hanging on right now."

The report said personal farm income will continue to drop slightly next year, mainly due to low commodity prices, higher costs and a decrease in government payments.

... But Has Potential

Due to expected trade growth, the report says, longer-term projections look good for agriculture. Net farm income is expected to climb in 2002 and continue to grow in the future.

A tightening of world supplies coupled with an increase in demand will encourage cotton prices to stabilize and possibly rise in the coming year. The U.S. 2001 cotton acreage is expected to equal that of 2000. If this holds true, near record exports will be needed to avoid an oversupply.

Peanuts are expected to remain at government support prices. Last week, the U.S. Department of Agriculture announced that the 2001 national poundage quota for peanuts will remain at the 2000 level: 1.18 million tons.

Foreign competition will continue to put pressure on the U.S. peanut industry. U.S. growers hope to offset this with higher yields and increased demand.

It'll Cost Farmers More

The cost of fuel, fertilizer and borrowed money is expected to be higher next year. Depending on the fuel prices, which show no signs of lowering, it will cost farmers 2 percent to 10 percent more to produce their goods next year, Givan said.

Cattle Outlook Stays Strong

Georgia cattlemen, despite the drought, did well in 2000. It looks like they will continue to do so for the next few years.

"It was a very good year as far as prices for cattle farmers," said John McKissick, a UGA economist who contributed to the report. "Cattle prices are going to be very favorable for the next few years, on into 2003."

Shoppers are demanding more beef. "We actually had a record year in beef production in the United States," McKissick said, "and it sold at a higher price."

But Georgia cattlemen haven't had a chance to fully enjoy the high prices. Because of the prolonged drought, they've had to spend more money to keep their herds fed and watered. This has cut into their profits.

Next year, McKissick said, a reduction in the U.S. beef supply will keep prices at higher levels.

The same can't be said for poultry, however.

"For the first time in a long time," McKissick said, "there is a softening in demand for poultry parts, particularly with white meats domestically and dark meat with exports."

Today, about half of Georgia's more than $6 billion farm income is from poultry production.

To get a copy of the "2001 Georgia Farm Outlook and Planning Guide," contact your county UGA Extension Service office.

Brad Haire is the former news editor with the University of Georgia College of Agricultural and Environmental Sciences.