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Agriculture a vital cog in the economy of Mississippi

By BECKY GILLETTE

Mississippi is a very rural state with some of the best farmland in the world.

“We live in a country where only about two percent of our population is involved in farming, and it is so often forgotten that these farms, most of which are family operated, touch the lives of every person by providing safe, affordable food and fiber to the world,” said Mississippi Ag Commissioner Andy Gibson.

Gibson said agriculture continues to be the leading industry in Mississippi and an important economic driver. The state’s 36,200 farms produced $7.5 billion in commodities last year, farm gate value alone, contributing greatly to the economy.

“Agriculture is the backbone of many of our small towns and rural communities with a significant number of jobs, both on-farm and off-farm, related to agriculture,” Gibson said.

Agriculture is the number one industry in Mississippi and employs approximately 29 percent of the state’s work force either directly or indirectly, said Dr. Josh Maples, assistant professor and extension economist, Department of Agricultural Economics, Mississippi State University.

“Overall, agriculture and forestry added $16.41 billion to the Mississippi economy,” Maples said.

In terms of dollars of production, poultry and eggs led the way in 2017 at $2.8 billion worth of production followed by forestry at $1.4 billion. The next three are the primary row crops in the state – soybeans, cotton, and corn. Maples said combined, these three crops accounted for almost $2 billion worth of production.

“Even products beyond the top five still have major impacts,” Maples said. “Cattle and catfish rank sixth and seventh and accounted for $285 million and $181 million, respectively.”

Commodity prices are lower this year which will impact the total value of production. For example, soybean prices are approximately 30 percent lower than they were just four or five years ago.

“The story is similar for other commodities, too,” Maples said. “This has severely tightened margins for producers and resulted in a lower value of production even if the quantity produced is similar.”

Many people aren’t aware of the importance of supporting ag in Mississippi.

“Understanding and teaching others about the importance of agriculture to our everyday lives is one of the best ways to support agriculture,” Maples said. “Mississippi State University is very involved in this effort through research and extension efforts that target continually improving agricultural production practices and increasing knowledge for both producers and consumers. A strong agriculture and forestry industry in Mississippi is not only important to the lives of those directly involved, but also to Mississippi as a whole because agriculture is such an important part of the state economy.”

In terms of employment, income, and gross domestic product (GDP), the size of production agriculture and/or farming in the state is relatively small compared to other sectors.

“However, if indirectly related industries are considered, then the significance of agriculture increases considerably,” said Dr. Corey Miller, economic analyst, University Research Center, Mississippi Institutions of Higher Learning. “In addition, for specific areas of the state such as the Delta counties and south-central counties (i.e., poultry industry) agricultural production and related occupations account for a sizable share of economic activity. Moreover, in years of relatively slow growth in economic output in Mississippi–which has characterized most years since the end of the Great Recession–agriculture can have a significant impact. The year-to-year changes in the contribution of agriculture can be more volatile than other sectors, however.”

Over the past decade, the agriculture sector in Mississippi has mostly maintained its value as a share of real GDP. Miller said the share has improved somewhat over the past five years, although the value can fluctuate from year to year.

Historically, agriculture has been one of a few industries where the U.S. has maintained a trade surplus. For example, the latest forecast by USDA projects a trade surplus in U.S. agriculture for fiscal 2018 of $21 billion. For about the last ten years on average 20 percent of the value of U.S. agricultural production was exported.

“Compared to the late 1990s the value of agricultural products exported to Canada and Mexico has increased considerably due to NAFTA,” Miller said. “The U.S. also exports a much larger share of its agricultural production to China than in the past because of trade liberalization and rising incomes in that country.”

There are concerns about profitability in ag this year. USDA’s current forecast projects a decline in U.S. real net farm income in 2018 from the previous year. Much of this expected decline results from very good yields in each of the previous two years, leading to price decreases, while expenses remain largely flat.

“Most recently, the uncertainty created by the potential tariffs China could impose on U.S. soybeans in response to U.S. duties on Chinese goods has led to decreases in futures prices for soybeans, other grains, and livestock,” Miller said. “These price declines could exacerbate profitability issues in 2018 if they persist. But the longer-term concern from tariffs is China could find sources other than the U.S. to help meet the country’s demand for soybeans and other agricultural commodities.”

The Delta crop got a late start due to wet, cool planting conditions.

“However, in a meeting earlier this week with cotton, soybean, corn, and rice growers, all participants from all areas of the Delta felt like we have a very good crop in the field and that it holds promise for a good harvest,” said Chip Morgan, executive vice president of the Delta Council. “We’ve got a lot of production challenges to meet between now and harvest.”

Senate and House actions on the Farm Bill are their highest priority at this time and both the House and Senate are moving their bills toward floor action. While both the House and Senate bills are good farm bills, Morgan said there are formidable challenges that must be met when the House-Senate conferees begin to reconcile their different bills.

“We are grateful to Chairman Roberts (Kan.), Ranking Member Stabenow (Mich), House Chairman Conaway (Texas), and Ranking House Member Peterson (Minn) for their very good work in crafting a very solid national farm policy,” Morgan said. “The provisions proposed by Senator Grassley to restrict the eligibility of farmers to participate in the commodity programs would be extremely disruptive to farmers in the Mid-South, the Southeast, Texas, and the Far West, and we are hopeful that conferees will address this proposal during House-Senate Conference proceedings.”

Beth Stevens, executive director of the Greenwood Chamber of Commerce, said many people may not think of it as an industry.

“But it certainly is,” Stevens said. “When you think of all the supplemental businesses that are part of the process and the supply chain for crops like cotton, you have everything from the farmer to the ginner, the warehousing, fuel, implements, shipping, banking, chemicals, water, retail and so much more. That’s a huge impact.”

Stevens said their local economy certainly feels the effects of agriculture, both in terms of a good year and a not-so-good year.

“It definitely has a big impact on the community either way,” she said. “Small towns, especially in Mississippi, are supported by the ag industry in many ways.”

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