What is in this article?:
- Alabama farm economy compared to kaleidoscope
- Good commodity prices, scorching drought
• At any given time, about a third of farmers are making money, a third are breaking even, while the remaining third are not turning a profit.
Good commodity prices, scorching drought
For southeast Alabama row-crop producers, the 2011 crop year was fraught with irony — good commodity prices but little to sell due to the effects of scorching drought.
Meanwhile, in the geographic opposite end of Alabama, northwest row-crop producers fared considerably better. “Growing conditions were good, prices were fair — not exactly a record year but a good one,” Runge says.
Only a few months later, as Alabama producers entered the 2012 crop year, conditions had changed decidedly for the better.
While input costs had climbed, cattle producers were still enjoying exceptionally good prices. Meanwhile Alabama row-crop producers were anticipating good prices for most commodities. Spring planting conditions were optimal throughout the state.
Then drought conditions set in, and fields and cropland began drying up, so did the optimism of the state’s row-crop producers.
Conditions were even worse in the Midwest, which worked to drive soybean and corn prices higher.
Then, the kaleidoscope went another turn and conditions changed for the better throughout much of Alabama. “As harvest rolled around, corn and soybean yields were not as bad as expected, and while prices went down, they still ended up at good levels,” Runge says.
Some irony was mixed in too.
Runge says Alabama producers can expect record yields for soybeans, cotton and peanuts, though prices turned out to be a mixed bag — good for corn and soybeans, though not so good for peanuts and cotton.
Another factor that contributes significantly to this kaleidoscopic effect in Alabama is that row-crop producers don’t produce enough to affect national commodity prices. Consequently, they’re at the mercy of conditions in the rest of the nation, primarily the Midwest, which dominates corn and soybean production.
“It really is a different picture in the Midwest than other parts of the country,” Runge says. “Land productivity is much higher and the farm economy is less diversified and, consequently, less prone to this kaleidoscopic effect common in Alabama.”
Runge says he was reminded of this recently following a conversation with a Midwestern row-crop producer.
“He talked about his good three- to four-year run and how he felt for farmers in the Southeast who deal with all these wild cards,” Runge says. “He sees farming in the Southeast as quite a challenge compared to where he’s from.”