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UGA experts predict volatile farming year The perfect storm may hit Georgia agriculture this year. But it doesn't promise to bring rain. Drought, high energy costs and a shaky U.S. economy could make for a trifecta of trouble. "The current rate of change and uncertainty in agriculture is unprecedented," said J. Scott Angle, dean and director of the University of Georgia College of Agricultural and Environmental Sciences. "Now more than ever, farmers must use the best predictive tools to plan for the coming season." Drought and water are major concerns for all of agriculture. The shrinking value of the U.S. dollar and soaring energy costs are troubling, too, said John McKissick, a CAES economist. Good with bad Georgia's agricultural outlook is "a tale of two cities," he said. "The price outlook for all of agriculture is good. But the cost of production is going to be very high also. So whether the total profit picture is good depends on how high the input costs go." Despite drought and other economic challenges, Georgia's farm gate value increased last year. Georgia soybean and wheat farmers got record high prices for their crops. Corn prices were near the record price. "We have a lot of alternatives on the crop side," McKissick said. "We will certainly see a big increase in soybean acreage this year because it's a low-input crop with record high prices." Higher grain prices mean livestock and poultry farmers will pay more to feed their animals.This will increase their costs, he said. Grain prices haven't always been high in Georgia. They were low in the recent past, and farmers reduced production. Because of this, the state lost a lot of its infrastructure to store and handle grain. But that is changing. "How long is this going to last? Are we back in the grain business?" McKissick said. "I think there is a fundamental shift afoot here." Global impact National and international fac- tors have led to the current economic situation, he said. One factor is ethanol. Increased demand for corn to produce it has driven up the value of the crop. Buyers of other crops like soybeans, wheat and peanuts have also increased their prices to make sure farmers grow their crops, too. The U.S. dollar is weak right now. That means foreign countries can buy U.S. crops for less money, which can be a good thing for the farm economy. "So even though we have record high prices here," said McKissick, "they are still competitive for import in other countries."
(Faith Peppers is a news editor for the University of Georgia College of Agricultural and Environmental Sciences.)
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