Drought conditions in parts of the state have added to low commodity prices to make 1999 one of the bleakest years for agriculture that the state has seen in many years.
“Things are about the same: bad,” said Jim Carrington, director of information for the Mississippi Farm Bureau. “I’ve been with the Farm Bureau 29 years, and I don’t think I’ve ever seen it as bad as it is now.”
Carrington said lack of rainfall has hurt productivity in some areas of the state. Although many areas received rain recently, in many cases the rains came too late to be very helpful. Now that farmers are beginning to enter the harvest season, rain can be a problem instead of a help.
Low commodity prices, not weather, continue to be the greatest problem facing Mississippi farmers.
“The Farm Bureau is trying to work with Congress to get some legislation passed to see if we can help our farmers,” Carrington said. “Of course, some action has been taken but it hasn’t really addressed a lot of the problems we are having. So we still have some work to do there.”
Tommy Gregory, state statistician for the U.S. Department of Agriculture (USDA), said drought conditions in parts of Mississippi are expected to reduce yields from amounts predicted earlier in the year.
Gregory said prices for agriculture products continue to be depressed.
“Prices are very bad this year,” Gregory said. “If supplies stay high worldwide, which it looks like they might, prices will remain bad and the farmers won’t make any money. Everyone else on the marketing chain is able to pass along costs much easier than farmers. Farmers have much more difficulty passing on increased costs to the customer.”
A lot of growers in Mississippi store soybeans and cotton after harvest for sale in February and March when they hope prices will be higher.
While news of drought and heat elsewhere in the U.S. might lead people to believe that the harvest will be reduced, leading to more favorable marketing conditions, Gregory said most of the bad weather was in the Northeast. But the largest production of staple crops is in the Midwestern Grain Belt which hasn’t experienced significant drought problems.
“Even with all the news about drought, there is still a large supply of corn and soybeans on the market,” Gregory said.
Catfish farming continues to be one of the few bright spots in Mississippi agriculture. The industry has been doing well over the past year.
“That is a real success story for Mississippi,” Gregory said. “They go through good and bad times themselves, but that is currently a bright area for Mississippi agriculture. And they were getting even better prices last spring than they are right now.”
Prices for timber in Mississippi are down in most areas, according to Bob Daniels, a forestry specialist with the Mississippi State University Extension Service. The first half of 1999 saw about the same volume of timber harvested as the previous year. But prices are lower.
“Price are about the same for the pine saw timber market,” Daniels said. “The others are all down. Hardwood saw timber is down about 10%. Oak saw timber is down 4.5%. Pine pulpwood is down 18%, and hardwood pulpwood is down 28%. Pulpwood demand has been off significantly, and prices have reflected that.”
The pine lumber market through the first half of the year has been good. But the economic crisis in Asia, particularly in Japan, has had a big impact on demand for pulpwood.
“Generally there is an over capacity of paper making in the world,” Daniels said. “There is more capacity than demand. As a result, that has set off a string of mergers and acquisitions in the pulp and paper industry. There have been a number of decisions to close down mills or take paper machines offline to try to bring production in line with demand.”
Daniels said that the general consensus is that the market for pulpwood in Mississippi will be soft for the rest of the year. He expects that overall the value of Mississippi’s timber harvest will be about 5% lower in 1999 than in 1998 although that could change if timber sales pick up in the fall.
Mississippi has 18.5 million acres of forest, representing about 62% of the state’s land. The majority of this land, 66%, is owned by private non-industrial landowners. More than 310,000 private, non-industrial landowners own about 12 million acres of Mississippi forest land. The value of Mississippi’s timber harvest is over $1 billion each year.
Some paper companies are hoping that their investments in Y2K computer compliance could make them more competitive than other companies that haven’t yet upgraded computers to deal with the issue of Year 2000 computer compliance. Daniels said companies believe if they can stay productive, and avoid Y2K problems, they will benefit.
Contact MBJ staff writer Becky Gillette at firstname.lastname@example.org.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info