Net farm income should keep rising throughout 2004 and the rest of this decade, according to the 2004 Georgia Farm Outlook and Planning Guide, compiled by the University of Georgia Department of Agricultural and Applied Economics.
The demand for food and fiber at home and for U.S. farm exports will continue to climb. And supplies are tighter now than in the past. All of that is good news for Georgia farmers, said Don Shurley, the UGA Extension Service economist who edited the outlook.
The economic health of major Georgia farm commodities like cotton, peanuts and poultry and the future growth of other commodities like vegetables depend greatly on how well they can compete on world markets.
"Because we can grow so much of our crops, we generally have more than we can consume in the United States," Shurley says. "We have to be able to successfully export our commodities."
The continued weakening of the U.S. dollar in international trade markets will make U.S. farm goods easier for other countries to buy in 2004. "When the U.S. dollar weakens," Shurley says, "farm prices usually respond positively due to increased demand for U.S. exports."
Georgia cotton farmers had a great year in 2003. They had a lot of cotton, and the world wanted it. Foreign mills demanded it to make clothes. China, a U.S. cotton competitor, needed it because they had a bad cotton year. And the weaker U.S. dollar helped make it all a little more affordable.
These same positive price factors will continue into 2004. But prices probably won't be as good as in 2003, according to the report. When cotton prices are good in one year, farmers tend to plant more cotton in the next. If they plant more and growing conditions are good, U.S. and world production will likely be high. This will increase the supply and reduce prices.
It's tough to predict, but cotton prices in 2004 probably will be around 60 cents per pound. They got as high as 84 cents in 2003.
Georgia peanut farmers can expect better prices in 2004. When prices for other commodities climb, that tends to increase peanut prices, says Nathan Smith, a University of Georgia Extension peanut economist.
Peanut shellers hope to woo growers into planting peanuts instead of other crops like cotton this spring. They're contracting peanuts right now for about $400 per ton, $20 higher than 2003 prices.
Despite one U.S. case of bovine spongiform encephalopathy, or mad cow disease, in late 2003, Georgia's cattle outlook is good. U.S. consumers still are demanding beef, and U.S. supplies are relatively tight. This translates into favorable prices for cattlemen, says Curt Lacy, Extension cattle economist.
In 2003, a Georgia cattleman could get about 90 cents per pound for a 500-pound steer. He can expect in 2004 to get about 85 cents per pound, still a strong price.
According to the outlook, per capita consumption of major Georgia vegetables like bell pepper, tomatoes, sweet corn, onion and cabbage increased by 3 to 5 percent in 2003. It's expected to increase slightly in 2004. Any increase in exports due to the weaker U.S. dollar will help growers, too.
Details about these and other Georgia crops can be found in the outlook guide at www.agecon.uga.edu