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Ag 2001: still depressed despite certain bright spots

Mississippi agriculture started the growing season “like a dream,” as one ag expert put it. The three-year drought had ended, and increased acres planted in cotton, corn and rice set up the potential for record harvests.

Then the dream turned into a nightmare for many growers when the break in the drought turned into too much of a good thing as heavy rains late in the season damaged and destroyed crops. And the better prices for cotton and corn that led to increased acreages being planted in those commodities simply haven’t materialized as hoped.

“There was a very significant increase in rice and cotton production this year in anticipation of better prices,” said Dr. Charles Lee, vice president for Agriculture, Forestry and Veterinarian Medicine at Mississippi State University. “The rainfall late in the season has had a depressing effect on soybeans and some cotton, which was badly hurt by late season rains, which made it difficult to get harvesting done on time.”

The complete damage toll from the untimely rains hasn’t yet been determined. But ag experts are saying record corn, cotton and rice yields are still possible despite the damage because of the increased acreage planted in those crops.

In other areas of agriculture and forestry, Lee said timber prices continue to be depressed. But beef prices are strong, milk and hog prices have improved a little, and there has been a very welcome improvement in poultry prices. Poultry is the state’s top commodity.

Mike McAlpin, president of the Mississippi Poultry Association, said for the first time in nearly four years things are looking up.

“Industry wide this has been our first profitable year in about three and a half years,” McAlpin said. “I think we have seen that most of that has come from the rebound of exports.”

Russian imports — a big part of the success of Mississippi poultry industry until the Russian economy experienced a major downturn three and a half years ago — has come back dramatically. McAlpin said that, as a result, for the first time in almost four years poultry producers are putting a little money in the bank instead of borrowing money.

“Everyone is pleased with that,” McAlpin said. “Grain prices have held steady, so that has been a plus, too.”

Because declines in exports cut prices for poultry, companies haven’t been expanding as quickly. The 5% to 7% annual growth seen in the late 1990s has decreased to 2% to 3% growth. Slower growth prevents oversupply that can depress prices.

The turnaround for poultry came just in the nick of time.

“This time last year there were a lot of concerns whether or not there would be companies that would be able to keep their doors open,” McAlpin said. “You can just bleed so much red ink, and then you are bone dry. Thank goodness the export market has come back. We’ve also seen an uptake in stock prices of publicly traded poultry companies.”

Catfish production was one of the only portions of the agribusiness sector in Mississippi that was profitable a year ago. Growers were benefiting from good market demand coupled with low feed prices. But the catfish industry has been hard hit this year by cheap imports of a Vietnamese fish of another species that growers say is being deliberately mislabeled to make consumers think it is domestic farm-raised catfish.

According to the Mississippi Department of Agriculture and Commerce, the Mississippi catfish industry has been losing more than $172,000 per day because of cheap Vietnamese imports, which works out to a loss of $40 million to growers and $23 million to processors over the past year.

Hugh Warren, executive vice president of the Catfish Growers of America, said the losses have been particularly tough because before the market was flooded with these imports, catfish production was one of the few profitable ventures in agriculture.

“The catfish industry was one bright spot that helped shore up overall agricultural operations that were diversified into catfish,” he said. “The situation has also had an adverse effect on workers in processing plants, feed mills and other related industries that depend on catfish for their jobs.”

Another area of agriculture that is favorable is sweet potatoes.

“Sweet potatoes are doing great,” said Chris Sparkman, deputy commissioner of agriculture in Mississippi. “The acreage is up considerably. The harvest is about half through. Even the price is still pretty good. Sweet potatoes are a growing niche market in the state. It is a specialty type crop farmers can make some money on. Some cotton farmers around Belzoni have gotten into sweet potatoes. It is a nutritious product a lot of health conscious people are interested in.”

“From what our indications are, even with the damage we are going to have a big crop for soybeans and cotton,” Sparkman said. “And we’re going to have a good corn crop. It probably won’t be record production, but a good crop. The hay farmers, rain helped them. Overall we are going to have some good crops, but prices are bad for just about everything except cattle and sweet potatoes.”

Lee says it is unfortunate that higher prices anticipated for cotton and other commodities haven’t materialized.

How state farmers will fare hinges on the outcome of the Farm Bill. Lee said there isn’t good information yet about how federal crop payments will influence the overall outcome of Mississippi agriculture.

“Last year federal farm payments to Mississippi farmers were about $460 million,” Lee said. “We do not yet know yet what those numbers will be for this year, but they will be critical not only for agriculture but critical in terms of impact on the state’s economy given that so much of our economy continues to be dependent on agriculture and forestry.”

The Farm Bill has passed the House, but not the Senate. Lee said the Senate leadership is pressing for more emphasis on conservation. Lee said he believes much of the debate will center around assuring a safe and dependable supply of food. It could be as late as next year before the Farm Bill is finalized.

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3457.

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