Good yields, bad prices — Agriculture impacted by weaker market

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Published: January 17,2014

Tags: Business, corn, cotton, farm, Mississippi, rice, subsidies

Farm SubsidiesFor farmers, 2013 was a year to remember, though not all of those memories are good ones.

For the 19th consecutive year, poultry rang in as the top commodity in Mississippi, and forest products saw a bounce-back year, regaining the number two spot of Mississippi’s top commodity list.

However, many commodities — including corn and soybeans — saw market prices that could not offset costs even as yields set new state records.

John Michael Riley, agricultural economist with the Mississippi State University Extension Service, said the major difference between 2013 and the prior year were agronomic crop prices.

“In 2012, when most of the nation’s farmland was experiencing a major drought, Mississippi farmers were able to produce very good yields,” Riley said. “While yields were down across the country, our growers were able to capitalize on the higher prices.”

Riley estimated agricultural commodity values for 2013 compared to the previous year and the five-year average. The estimated $7.35 billion is 4 percent less than 2012’s total value, but 11 percent more than the five-year average.

Soybeans are a good example of what many farmers faced in 2013. Farmers are expected to have harvested 43 bushels per acre, nearing the state record of 45 bushels set in 2012. But the 2013 crop has an estimated value of $993 million, which is more than 20 percent below 2012.

Corn held on to its number four ranking among the state’s commodities with an estimated value of $631 million. Still, that is down more than 30 percent compared to 2012.

“Corn’s projected average price for the state is $4.40 a bushel, down from $6.89 a bushel received in 2012,” Riley said.

Erick Larson, Extension grain crops agronomist, said weather was a key factor in the production of corn, which is highly dependent on moisture.

“Most of the corn in the state was planted the first 25 days of March,” Lawson said. “From then until early May, there were very few opportunities to plant. A lot of the acres that were intended for corn, but never planted, were dryland acres. The state’s per-acre yield in 2013 is more reflective of irrigated yields.

“In Mississippi, irrigated land normally produces yields of 50 to 100 bushels of corn more per acre than does non-irrigated land.”

But the news wasn’t all bad. In fact, some value of some commodities such as rice, cotton, livestock and hay were up last year compared to 2012.

Perhaps the best news was in catfish. After years of decline in acreage, catfish production is expected to come in 10 percent above 2012 — the first production increase in catfish in more than a decade.

The 2013 crop is expected to bring $178 million.

Jimmy Avery, Extension aquaculture specialist and director of the Southern Regional Aquaculture Center in Stoneville, said some consumers chose cheaper foreign imports in 2011, when catfish supplies were tight and retail prices of catfish increased about 50 percent. The shortage peaked in late 2011 and early 2012.

“Now that our supply has stabilized and more consumers are requesting U.S. products, our markets are returning,” he said. “Farmers are finding a way to intensify production and be more efficient. They are ending the year much more optimistic about profit potential in 2014.”

Poultry and forestry, however, were the two commodities that helped buoy the state’s agriculture figures in 2013. Poultry value was up 10 percent over 2012 while forestry is estimated to be up approximately 13 percent. Both poultry and forestry were up 13 percent and 17 percent, respectively, over the five=year average.

For poultry farmers, the increase in corn production and corresponding drop in feed costs added up to an improved year. In 2012, poultry farmers were paying $8 per bushel for corn. Last year, the cost was $4.50 per bushel.

Tom Tabler, Extension professor in the Department of Poultry Science at Mississippi State University, said, “There has been a slight expansion of the industry, not just in Mississippi, but across the country. Producers have seen fairly good market prices and feed prices that are in line with profitability.”

Foresters saw a harvest value in 2013 that is more than 14 percent over the previous year. More notably, the 2013 harvest value is 34.9 percent higher than the 2009 harvest value of $864.9 million, which was the lowest valued harvest year since the recession of 2007 to 2009.

“The increase can be attributed to several factors, including an increase in timber harvesting because of slightly higher prices,” said James Henderson, associate Extension professor in MSU’s College of Forest Resources. “Severance taxes collected on timber sales are up 4.4 percent as of October, compared to the same period for 2012.”

 

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