With low prices and extreme drought, the past three years
haven’t
been kind to Georgia farmers. However, economists say better
days
could be ahead for the state’s agriculture.



According to the “2001 Georgia Farm Outlook and Planning
Guide,” a report prepared by the University of Georgia
Department
of Agricultural and Applied Economics, Georgia’s slumping farm
sector will stabilize in the coming year.



Georgia consumers will continue to benefit, too. Because of an
oversupply of many major farm commodities in the world, food
prices
will likely increase at less than the rate of inflation.



Row-crop Farming Still Tough
…



“Farmers still don’t have a lot of extra money,” said
Bill Givan, a UGA economist who contributed to the report.
“It’s
pretty much the same across the board. Farmers just didn’t get
by (in 2000) on the crops they grew. They’re just sort of
hanging
on right now.”



The report said personal farm income will continue to drop
slightly
next year, mainly due to low commodity prices, higher costs and
a decrease in government payments.



… But Has
Potential



Due to expected trade growth, the report says, longer-term
projections
look good for agriculture. Net farm income is expected to climb
in 2002 and continue to grow in the future.



A tightening of world supplies coupled with an increase in
demand
will encourage cotton prices to stabilize and possibly rise in
the coming year. The U.S. 2001 cotton acreage is expected to
equal
that of 2000. If this holds true, near record exports will be
needed to avoid an oversupply.



Peanuts are expected to remain at government support prices.
Last
week, the U.S. Department of Agriculture announced that the 2001
national poundage quota for peanuts will remain at the 2000
level:
1.18 million tons.



Foreign competition will continue to put pressure on the U.S.
peanut industry. U.S. growers hope to offset this with higher
yields and increased demand.





It’ll Cost Farmers
More



The cost of fuel, fertilizer and borrowed money is expected to
be higher next year. Depending on the fuel prices, which show
no signs of lowering, it will cost farmers 2 percent to 10
percent
more to produce their goods next year, Givan said.



Cattle Outlook Stays
Strong



Georgia cattlemen, despite the drought, did well in 2000. It
looks
like they will continue to do so for the next few years.



“It was a very good year as far as prices for cattle
farmers,”
said John McKissick, a UGA economist who contributed to the
report.
“Cattle prices are going to be very favorable for the next
few years, on into 2003.”



Shoppers are demanding more beef. “We actually had a record
year in beef production in the United States,” McKissick
said, “and it sold at a higher price.”



But Georgia cattlemen haven’t had a chance to fully enjoy the
high prices. Because of the prolonged drought, they’ve had to
spend more money to keep their herds fed and watered. This has
cut into their profits.



Next year, McKissick said, a reduction in the U.S. beef supply
will keep prices at higher levels.



The same can’t be said for poultry, however.



“For the first time in a long time,” McKissick said,
“there is a softening in demand for poultry parts,
particularly
with white meats domestically and dark meat with
exports.”



Today, about half of Georgia’s more than $6 billion farm income
is from poultry production.



To get a copy of the “2001 Georgia Farm Outlook and Planning
Guide,” contact your county UGA Extension Service
office.