Mother Nature smiled on Georgia grain farmers this year. Not
just by sending us
favorable weather, but by making growing conditions unfavorable
in the Midwest.

“1996 was a good year for all the grains in Georgia — corn,
wheat and soybeans,”
said George Shumaker, an economist with the University of
Georgia Extension
Service.

This is the first year farmers are operating under the “Freedom
to Farm” bill that
allows them to switch to crops that can be more profitable for
them. Shumaker
said that’s allowed them to plant different crops as world
market prices have
dropped or risen.

A lot of the effect farmers felt was due to a cold, wet spring
in the Midwest. That
kept those farmers from harvesting their wheat on time and
planting corn.

Through 1996, world wheat stocks dropped to a very low level. It
became
imperative to either grow a very large crop or use less wheat.
Because those stocks
were so low, prices rose.

Shumaker said the rising wheat prices earlier this year didn’t
really affect
Georgians, though. Local prices dropped near the harvest period.
The main grain
exporting facility in Savannah closed last year, further
depressing prices.

But the prices of retail bread and wheat products remained the
same because the
wheat value in the product is already quite low.

Worldwide wheat production jumped through the rest of 1996. “In
fact, right now
there is really an excess of wheat in the market,” Shumaker
said. That’s pushing
prices back down.

Georgia farmers grew a very large corn crop. Farmers really had
to manage the
way they sold their corn, to reduce their risk of getting caught
by falling prices, he
said.

The near-record crop caused prices to fall sharply during
harvest. They dropped
from $5.50 per bushel during early spring to about $2.50 per
bushel during
harvest in September and October.

But that’s good news for livestock farmers and retail meat
buyers. Lower corn
and other feed grain costs help lower the cost of raising beef
cattle, hogs and
chickens. Lower production costs gradually translate into slight
retail price drops.

Other feed grains include soybeans. Georgia farmers are just
getting back into
growing soybeans. “For many years, other crops such as peanuts,
cotton, corn or
wheat, were more profitable,” Shumaker said. “So farmers grew
those instead of
soybeans.”

New management programs are helping Georgia farmers grow
soybeans at
profitable levels. They’re contributing to the record U.S.
soybean exports this
year, too.

“Any nation that needs soybeans at this time of year has to come
to us to get
them,” he said.

“Here at the end of 1996, I would expect to see some increase in
soybean acres (for
1997),” Shumaker said, “and a slight decline in the corn
market.”

Current price ratios between soybeans and corn suggest that
soybeans are likely to
return a greater profit than corn for grain farmers, he said.