• Even with the increased yields, growers are expecting the same net return since expenses have gone up.
• It’s a race to see which will win — prices or expenses.
The August crop production forecast for Virginia farmers reported several pleasant increases as the growing season progressed.
Cotton production is expected to be up 86 percent from 2010, and winter wheat production could increase 129 percent from last year. But higher expenses are putting a damper on farmers’ profit expectations.
"Even with the increased yields, we’re expecting the same net return since expenses have gone up. It’s a race to see which will win — prices or expenses," said M.L. Everett Jr., chairman of the Virginia Farm Bureau Federation Cotton Advisory Committee and a Southampton County cotton, grain and peanut grower.
"These expenses have been something else. I just got a fuel delivery, and we’re looking at just over $3 a gallon on diesel fuel, and that was before a 10-cent-a-gallon increase that hit today," Everett said. "Some producers are thinking about buying next year’s fertilizer now, in hopes of saving money on the price increases expected next spring."
As demand for raw cotton came roaring back on the world market this past winter, prices topped $2 a pound. Those are stratospheric levels, considering Everett sold his cotton for between 65 and 70 cents a pound in recent years.
Like most Virginia farmers, he locked in his price for most of this year’s crop once it crossed the $1-a-pound threshold, so he didn’t get to take full advantage of the price run-up.
He’s still struggling to make a profit, he said, since late-summer heat and dry weather has reduced his potential yields.
"Everyone’s trying to get a piece of the action, from seed companies to cotton processors. And everyone’s concerned with the whole economy and what it may be like six months from now. So we’re all being as businesslike and conservative as possible right now."
The National Agricultural Statistics Service estimates Virginia cotton yields will reach 981 pounds an acre this year, up 249 pounds an acre from 2010. And cotton acreage is up 39 percent from last year, at 114,000 acres.
Almost all Virginia cotton is grown in the southeastern corner of the state.
Virginia winter wheat yields are now forecast to reach 72 bushels an acre, compared to 51 bushels an acre last year. Wheat acreage is up 100,000 acres from the 160,000 acres harvested in 2010.
Corn yields also are forecast to be higher in Virginia this year at 116 bushels an acre, an increase of 39 bushels an acre over 2010.
Corn production is predicted to be 90 percent higher than last year, with 340,000 harvested acres.
Virginia peanut plantings are down from last year by 4,000 acres, but production is expected to rise 43 percent from 2010 levels due to an almost 50 percent increase in expected yields.