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Ag in Mississippi saw record yields and profits in 2003

The 2003 crop year will best be remembered as the year things turned around for agriculture in Mississippi. In the previous four to five years, prices were low and there were production problems caused by weather and pests.

But in 2003, the state saw not only record yields in key commodities, but the most favorable prices seen in some time.

“Many things that happened in 2003 had a very positive effect on Mississippi agriculture,” said Mississippi Agriculture Commissioner Lester Spell. “Rain and harvest conditions allowed yields, in many cases, to reach levels that have never been met in our state, and market improvements throughout the year resulted in profitability at the farm level. It has been apparent over these last few months that the state economy does well when agriculture profits.”

The positive trends seem to be continuing in 2004. Spell said most markets have remained at profitable levels and are speculated to remain through this year.

“We look towards optimistic returns in grain, livestock, fiber and other food markets this year with compatible weather, so Mississippi should continue to grow with another good agricultural year in 2004,” Spell said.

Dr. John Anderson, extension ag economist at Mississippi State University (MSU), said 2003 was actually a very good year for agriculture – particularly in the mid-South.

“That was a change from what we have seen really for about the past four or five years,” Anderson said. “What we had in 2003 was a unique combination of circumstances that gave us good yields on our row crops combined with good prices. That isn`t a combination you expect to see very often. Cotton and soybeans did very well. We had exceptional beans. All of our commodities enjoyed significant improvement in price. We had records yields on both cotton and beans, and at the same time very strong price improvements from 2002. We also saw a lot of improvement in rice prices, which were extremely low in 2002. Those prices came up quite a bit in 2003. That was another sector that saw a lot of improvement.”

In terms of total ag revenues, 2003 was a record for the state where an estimated 30% of the workforce is employed in ag related industries. Revenues for 2003 totaled about $5.6 billion from the 43,000 farms in the state covering 11 million acres.

Anderson said another reason ag revenues were up was that government crop support payments increased in 2003. Some people had a difficult time figuring out why with high prices and high yields, government support payments would also be up. Anderson explains that the most recent Farm Bill had a one-time opportunity for farmers to update base acres and base yields on their farms for the government program.

“That was a very important opportunity for them,” Anderson said. “But the practical implications of that was people couldn`t get enrolled to get government payments until 2003 because that is how long it took to get the Farm Bill implemented. Payments received in 2003 were delayed from 2002. Also, disaster assistance received in 2003 came from disasters from as far back as 2001.”

However, increases in government crop payments were less of an issue in the overall economic picture than improvements in crop prices.

In the livestock sector, the cattle market was very good in 2003. Then there was the Canadian mad cow disease (bovine spongiform encephalopathy or BSE) case late in the year that closed U.S. borders to Canadian cattle and beef that at that time represented 7% of the consumption in the U.S. That resulted in a reduced supply of beef in the U.S., and increased demand from Japan, South Korea, Mexico and other counties that stopped importing beef from Canada.

“We picked up a lot of that business,” Johnson said. “The beef market has been fantastic with record prices for feeder cattle and wholesale beef. We didn`t necessarily see record calf prices at auctions in the South, but we saw what were historically very good prices. The market has recovered nicely from the BSE scare.”

Poultry, which is Mississippi`s top commodity in terms of production, also had a good year in 2003 after recovering from a very bad year in 2002. In 2002, there was a trade dispute that disrupted exports to Russia – a key market for U.S. poultry. Anderson said in 2003 the export market recovered quite a bit, and total meat supplies were down from previous years. Those factors helped increase prices and hence profitability for poultry producers.

Approximately 769 million broilers were produced in Mississippi in 2003 and about 1.6 billion eggs. The total value of poultry and egg production was $1.59 billion.

Timber, the state`s second highest commodity, brought in an estimated $1.03 billion in 2003. It was the leading agricultural crop in 40 counties. Of the state`s total land, 61% is devoted to commercial forests.

Anderson said timber prices bottomed out in 2003 and then started to come back. It was a flat year in terms of the value of production, but the improvement in prices was welcome.

Other top commodities that did particularly well in 2003 include corn and soybeans. Anderson said prices on those commodities backed up a little in the past month, but continue to see good demand.

“We have very low stocks for just about all of our commodities, and that is always supportive of price,” Anderson said. “Even if prices stay where they are, producers will do pretty well this year. Looking forward from where we are now, there have been opportunities for producers to hedge production with a forward contract at fairly profitable levels, primarily on corn and soybeans. Poultry broiler prices are much better than a year ago. The poultry industry is set to have a pretty good year after a scare earlier this year regarding avian influenza. It should be a good year for poultry.”

Other top commodities in Mississippi for 2003 include cotton, $780 million, soybeans, $263 million; catfish, $255 million, cattle and calves, $194 million; corn, $145 million; rice, $111 million; hay $78 million, and horticulture, $73 million.

Kerry Johnson, area horticulture agent for 11 coastal counties in Mississippi, said nurseries in that area of the state that produce ornamental plants are recovering from the economic downturn in 2003.

“I think they were affected more from the overall economic situation than any particular environmental event,” Johnson said. “Demand was down somewhat in 2003, and that is probably because the supply of nursery crops was up and the economy was still sort of sluggish. But that seems to be turning around this spring. Sales seem to have picked up over last year.”

Lee Taylor, Forrest County Extension director, said row crop farmers in the Pine Belt had a good year.

“Our farmers did well with cotton and peanuts,” Taylor said. “They had real good yields on both. They were able to make a profit. Cattle prices were doing well, and then we got the shock about mad cow disease. Everyone was really concerned about it. We thought prices would plummet, but prices remained good and are predicted to remain good during the summer. Profits were very welcome. For a while cotton prices were very depressed. But as it got around harvest time, they really took off. We got some good prices for cotton. So that was fortunate. We got some timely rains. That helped everything.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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