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Getting the Farm through 2017

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My story on the 2017 economic outlook is up at Growing Georgia. Many thanks to Kent Wolfe, Director of the University of Georgia Center for Agribusiness and Economic Development, and Brady Brewer, Assistant Professor of Agricultural and Applied Economics, for their time. 

Much of the advice from the experts should be obvious for any business operator: know your costs to operate and reduce them in whatever possible. However, as a farmer, there are some agronomic limitations, where revenue opportunity may come at the expense of long-term soil and plant health. I particularly like Brewer's suggestions about diversifying debt, but his recommendation to "get to 2018 with the least amount of damage" also sticks out.

Some of Brewer's comments are copied here for background:

"What we've been advising farmers is now is one of the most important times to know your cost of production. We're starting to transition farmers to where they keep accurate records. They know their input costs and exactly, down to the penny, what it takes to grow a certain crop. But that is our number one recommendation: Knowing your cost of production, what it is going to cost you is step one. Step two is choosing the crop that you think is the sure bet to cover your cost of production. … Different crops bring different risk levels, either through price risk or production risk. Certain crops take more water. Other crops might have historically variable prices. On the output side, those crops might be good in the good times when there's not much chance of going negative. But in times of lean margins, now might not be the time to take those risks. Once you know your cost of production, it's essential to pick the crop that, barring a complete catastrophe, you now is going to get you through this production year. … Let's get to 2018 with the least amount of damage." 

"Take the peanut for example. Due to certain pests, whether it be nematodes or fungus, it's a crop where you don't want to mess a whole lot with the rotation. However, with that said, we have seen some farmers start to tweak their rotation a little bit. Now obviously you can't just go completely away from it. But any tweak that you can do or any slight change is going to help you. Agronomically, if you're at a certain point in your rotation you can't just go completely away from it, but farmers have shown pretty good resiliency in being able to plant a little bit extra of a certain crop in the rotation and take away from another crop in the rotation. Any acre planted to something that is going to help you persevere is going to be better. … You have to think about the long-term so that if you do persevere through the next year, you don't want to completely ruin your soil agronomically. But any tweak is going to help." 

"The strong dollar is not helping us from an economic standpoint. The oversupply of corn and soybeans is really hurting the price for those two commodities. Peanuts and cotton are going to be more demand drive than corn and soybeans. But on the world market just because of the strong dollar, that demand is going to elsewhere just because it's cheaper to find those commodities elsewhere on the international stage. The two commodities that aren't oversupplied — cotton and peanuts — are being hurt by the strong dollar."

"When you speak with bankers they understand what's going in the industry of agriculture right now. They know that farmers' cash flows are tight, and they don't expect a farmer to walk in and say I'm planning for another bumper crop years … They know they're going to have some farmers coming after money, and that money may turn into a negative net loss. What they want farmers to have is a plan in place. Budgeting is going to be essential. If a farmer can go into the bank and say look, this is what my cost of production is, this is what — worse case scenario — I expect to receive at the market. It doesn't look too good, but the good news is that I have some working capital and I'm going to be able to pay you at the end of the year, or most of it. Bankers are going to understand that. From a risk standpoint, I always advise farmers to have multiple lending relationships. Any time you can diversity your banking portfolio, it's going to increase the chances that you keep receiving your lines of credit from lenders. Different lenders have different risk appetites. The more you have, the higher the probability there is that you're going to keep receiving the credit you need."

2016 Specialty Crop Block Grants Announced for Georgia

A little late to get this out, but most of the Specialty Crop Block Grant projects are just getting going, so it's not too late. The Specialty Crop Block Grant is administered cooperatively by USDA Agricultural Marketing Service and Georgia Department of Agriculture.

Here is the full list of Specialty Crop Block Grant awards.

 

Number of Projects: 18

Total Funding: $1,070,978.39

  • This partnership with the Georgia Food Bank Association seeks to provide grower/packer incentives equal to harvest and packing costs to enable growers to donate their wholesome but unmarketable produce to Georgia’s eight regional food banks. These food banks will then distribute this food to low income seniors, children, and working families through their network of 2,400 partner agencies and food-pantries in 159 counties.
  • This partnership with the Georgia Fruit and Vegetable Growers Association, working in cooperation with growers, commodity organizations and agribusiness companies across Georgia, will bring together farm and ranch producers to feature Georgia’s specialty crop fresh produce industry at the 2016 PMA Fresh Summit in Orlando, FL.
  • This partnership with the Georgia Fruit and Vegetable Growers Association seeks to provide the latest and most current research based educational information on specialty crop production practices, pest management techniques, marketing programs, sustainability needs, regulatory issues and food safety guidelines utilizing workshop presentations, hands-on training, networking, and on-the farm consultation.
  • This partnership with Georgia Organics seeks to provide technical workshops for lettuce growers on-farm during field days and farm tours, at the Georgia Organics annual conference, and at other key agriculture conferences addressing production, while integrating pest management, safe handling, organic certification training, and other related topics. Georgia Organics will also distribute and, when appropriate, develop new production resources to provide robust technical assistance workshops to lettuce growers.
  • This partnership with the University of Georgia seeks to protect surface and groundwater quality by monitoring and evaluating different methods of reducing off-site movement of nutrients from blueberry beds and will disseminate information gained through field days and industry meetings.
  • This partnership with the University of Georgia seeks to evaluate lavender production in Georgia; assess its economic viability as a specialty crop for Georgia growers; and identify the market potential and marketing strategies for lavender sales. The results from this project will be disseminated to producers and extension agents via workshops, fact sheets, and individual consultation. Market analysis will be provided to the public through reports and popular press articles.
  • This partnership with Georgia Pecan Growers Association seeks to increase pecan awareness and product demand by using targeted marketing opportunities to promote the health benefits and versatility of pecans to new consumers. As emphasized within this grant’s specifications, GPGA’s projects will increase sales and marketability and drive demand for pecans. Additionally, GPGA will expand child and adult knowledge of nutritional benefits, improve access, and increase consumption of Georgia pecans.
  • This partnership with the Eastern Cantaloupe Growers Association seeks to increase the market share and consumer awareness of Georgia cantaloupes by communicating the safety and quality of eastern cantaloupes to retail produce buyers and by restructuring the website to create a more consumer friendly resource. ECGA will connect with produce buyers nationally by attendance at tradeshows such as PMA’s Fresh Summit attended by more than 900 produce buyers.
  • This partnership with the Georgia Farm Bureau Foundation for Agriculture seeks to increase youth literacy of Georgia’s specialty crops through teacher developed educational materials and by disseminating materials through venues that include the general public as well as students.
  • This partnership with the Georgia Olive Growers Association and the University of Georgia seeks to address the top grower-identified project priorities to help Georgia’s olive industry grow, including: isolating a scientifically-based method of pruning to increase yield of olives planted in super high density orchards; educate local consumers about the health benefits associated with consumption of extra virgin olive oils and how to ensure the purchase of quality oils; and development of a growers’ manual outlining basic production practices and economic data for developing initial business plans.
  • This partnership with Georgia Watermelon Association seeks to educate consumers on the nutritional benefits of watermelon, and to encourage and increase consumption to positively impact the Georgia watermelon industry.
  • This partnership with the University of Georgia seeks to minimize the incidence of blossom-end rot in bell pepper by developing management strategies which can be implemented by growers and by distributing results to stakeholders at grower meetings and field days.
  • This partnership with the University of Georgia seeks to develop specific guidelines for peach growers in Georgia to help them perform effective location and variety specific crop load management. The effects of timing and intensity of thinning during flower or fruit development on fruit size, quality, and yield will be evaluated in multiple peach varieties of high importance to Georgia. This information will be used to develop decision making guidelines that will be provided to Georgia peach growers.
  • This partnership with the University of Georgia seeks to focus on alternative insect control measures to assist the small market farmer in more successfully growing squash and tomatoes. This project will focus on the use of organic alternatives to control the most prolific pests of these two crops, including leaf-footed bugs, stinkbugs, squash bugs, and squash vine bores. Results to be disseminated to stakeholders via field days, training, and publications.
  • This partnership with the University of Georgia seeks to identify native azalea plants for breeding compact varieties that sustain native pollinators. The project will use a genetics-based approach to develop native ornamental plants that have both ecological and economic value.
  • This partnership with the Vidalia Onion Commission seeks to implement a long-term marketing campaign in an effort to reach a younger audience of consumers aged 21-45. The Vidalia Onion Committee also seeks to provide more tools and resources to retailers in an effort to improve performance at the store level.
  • This partnership with the Vineyard and Winery Association of West Georgia seeks to evaluate the effect of three trellising systems on four leading Pierce’s disease-tolerant grape varieties on economic inputs, physiological characteristics, yield, and quality of grapes produced. The results of this study will be shared with current and prospective winegrape producers at regional meetings and field days.
  • Ensure that the State Agency and sub-awardees abide by Federal and State requirements and regulations by performing pre-award and post-award activities to administer Specialty Crop Block Grant Program funding.
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Georgia's Drought Impacts Cattle Production

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If you want to see a clear sign of the effects of the 2016 drought, look no further than livestock auction receipts for the week of November 11. Georgia cattlemen took 3,600 more cattle to the sale than they did during the same period in 2015. That's an increase of over 46 percent. For the year as a whole, 5,600 more head have hit the auction, obviously a large part of that coming in the latter half of the year as pastures quickly degraded.

Chart, forage conditions, and November 22 drought map are below. Praise the Lord we've had some rain in December.

Cattle and Calves Receipts

Data from 20 Georgia auctions. Source: Georgia Cattleman, December 2016

Pasture Conditions Weed Ending 11/13/2016

Source: USDA NASS
Georgia Drought Nov. 22