Georgia farmers should see better prices for what they produce
next year, according to a University of Georgia study.
The 2003 Farm Outlook and Planning Guide, published by the UGA
College of Agricultural and Environmental Sciences, will be
released in mid-January.
Cotton comeback?
Supply-and-demand seems to favor cotton farmers, said Don
Shurley, a UGA cotton economist with the CAES agricultural and
applied economics department.
In 2002, the world grew 87.4 million bales of cotton, or 11
percent fewer than in 2001. A bale of cotton is 450 pounds of
lint. Production declined in the major cotton-producing
countries: China, India, Australia and the United States.
While the world supply is lower, the demand for cotton is
expected to rise next year to about 96.4 million bales, up 2.4
percent from 2001.
“At this juncture, the 2003 cotton price outlook is
encouraging,” Shurley said.
Peanut marketing
UGA peanut economist Nathan Smith said Georgia farmers’ 2003
peanut crop will be their second under the new farm bill, which
ended the way they had long marketed their peanuts. Under
previous farm bills, the government had regulated the U.S.
peanut supply through a quota system.
To get better-than-average prices in 2003, peanut growers will
have to watch the market closely. Like cotton, peanut prices are
now very susceptible to supply-and-demand. And right now, this
isn’t working in peanut farmers’ favor.
The 2001 crop was the second-largest ever, creating an
oversupply of peanuts going into 2002. To get rid of these extra
peanuts, farmers need access to foreign markets or a huge
increase in consumer demand.
The U.S. Department of Agriculture expects U.S. citizens to eat
about 4.5 percent more peanuts this year. The industry view is
that lower peanut prices will increase consumption.
Lower farm prices for peanuts could mean slightly lower prices
for peanut butter and for candy and snacks containing peanuts.
It may be more likely, though, that manufacturers will spend
more on advertisements and promotions instead of lowering
prices.
The 2002 U.S. peanut crop wasn’t a good one. This drop in supply
could mean higher prices for farmers in the future.
Lively stock
Livestock and poultry account for 51 percent of Georgia’s total
farm income. In 2002, there was a large supply of poultry and
red meat. This suppressed farm prices. But domestic demand
remained strong, and prices weren’t as bad as they could have
been.
In 2003, poultry growers can expect slightly higher prices, said
John McKissick, a UGA livestock economist. But an oversupply of
eggs will continue to hurt egg prices.
U.S. beef production is expected to total 25.95 billion pounds,
down from 27 billion in 2002. This lower supply will increase
prices for farmers. Beef demand is expected to remain strong.
Tobacco uncertain
The tobacco industry still faces uncertainty. Tobacco remains
under a federal quota-based system. But changes in the industry
and the mood in Washington toward quota-based farm policies
point to a potential quota buyout.
Growers seem willing to give up the security of government price
supports for greater freedom in deciding how much to grow and in
selling directly to tobacco companies.
The 2003 flue-cured quota, announced Dec. 15, will be 526.4
million pounds, or 9.6 percent less than in 2002 and 40 percent
less than in 1997.
With the lower production, most growers have gotten prices above
the government support price. In 2002, 95 percent of Georgia
tobacco was contracted directly with tobacco companies.
Agriculture is Georgia’s No. 1 industry, generating $8.7 billion
of the state’s $400 billion annual economy. Including the
businesses directly and indirectly affected, farming contributes
$41 billion of state economy.
For a copy of the 2003 Georgia outlook guide, call your UGA
Extension Service county office.
