Published on 02/21/07

Farmers hear good, bad news in Ag Forecast 2007

By Dan Rahn
University of Georgia

Chuck Lee scanned the 160 farmers, lenders and others at the Georgia Ag Forecast 2007. "You want to know what it's like?" he said. "I've got four boys, and ain't none of them coming back to the farm."

The final speaker of the breakfast meeting Feb. 20 in Statesboro, Ga., Lee punctuated the morning with a tough assessment.

"My father struggled to support a family farming 100 acres," he said. "I've struggled trying to support a family farming 2,500 acres. I have to wonder how many acres we'll have to farm to support a family in 40 years."

The sellout crowd heard good news and bad from the economists on the program. The forecast of the upcoming farm season included prospects for the 2007 federal farm bill.

Lee drew a laugh with the punch line of a story about economists, characterizing their information as "entirely correct and entirely useless." But he added, "The information we've heard here is not useless."

Uncertain times

That's why Georgia Ag Forecast 2007 was created, said Scott Angle, dean and director of the University of Georgia College of Agricultural and Environmental Sciences. Agriculture needs good information.

"With the new farm bill and competition with other countries, I've never seen a time when things were more uncertain," Angle said. "That's the reason for the Ag Forecast."

The program was created to be an annual series. This year's series began Feb. 19 in Macon, where 130 people attended. More than 200 attended in Albany Feb. 21, and 150 are expected to attend in Gainesville Feb. 28.

Joe Outlaw, a Texas A&M University economist who has worked in farm policy analysis for two decades, said "only an idiot" would make forecasts on the farm bill. "So here goes," he said, predicting only a 25-percent chance of major changes.

Outlaw said the next farm bill will likely have more emphasis on renewable fuels. He predicted some tightening of payment limits, more funds for conservation programs and little other change.

Corn prices up

He and UGA economist John McKissick said the growing demand for corn for ethanol creates opportunities for farmers who can grow it.

Just a year ago, McKissick said, corn was at $2 a bushel and ethanol at $4 a gallon. "Now it's just the opposite," he said. "Ethanol is $2 a gallon and corn is $4 a bushel."

The three main markets for corn, he said, are ethanol production, poultry and livestock feed and export markets. The U.S. has about 100 ethanol plants now and will soon have 70 more. The added demand has driven corn prices skyward. But the historically high prices haven't dampened the export demand. "Exports are up," he said.

While that's good news for farmers who can switch acres to corn, it's terrible news for Georgia as a whole, McKissick said. The state gets more than half of its farm income from poultry.

Big-time losses

In 2006, he said, Georgia poultry growers used 212 million bushels of corn. Cattle farms pushed that usage to 230 million bushels. But farmers here grew only 28 million bushels. "Even if we double production," he said, "it won't make much of a dent in the deficit."

That's bad. "Every time the corn price goes up $1," McKissick said, "there's a $200 million net loss in the Georgia economy."

And many farmers can't quickly change to growing corn. Lee said the enormous cost of equipment limits his "fairly diversified" farm's flexibility. "When you buy a six-row cotton picker," he said, "you're committed to growing cotton."

Lee said he hopes one of his sons will change his mind about not coming back to the farm. "I hope we'll always have farmers," he said. "We just have to continually grow in what we do."

(Dan Rahn is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.)

Dan Rahn is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.