Md. farm profits projected to fall 35% this year

October 23, 1991|By Ted Shelsby

Earnings are down on the farm -- and the impact is being felt by many other businesses statewide.

The Maryland Department of Agriculture estimates that net farm income -- the money farmers have left after selling their crops and paying for things such as seed and fertilizer -- will fall about 35 percent this year and reach its lowest level since 1985.

Based on the latest agricultural data available, M. Bruce West, head of the state's Agricultural Statistics Service, estimates that net farm income will be off more than $138 million this year. Calling his figures his "best guess at this time," Mr. West predicted that farm income will total $261.4 million this year, down from $400.1 million last year.

Robert L. Walker, deputy secretary of agriculture, called the numbers "alarming" and said: "They tell me that there is a lot of suffering and pain out on the farms. There's no doubt about that."

Mr. Walker said that it would be tough for some farmers to survive. "It's a question of how much equity, capital and fortitude they have to carry them through another year," he said.

Based on the state Agriculture Department's estimate, farmers will receive their smallest pay checks since 1985, when farm income totaled $259 million.

The summer drought is only part of the reason for the drop in farm income. Mr. West said that prices for broilers -- by far the state's biggest agriculture industry -- are off this year. Broilers are chickens raised for meat, including Cornish hens, fryers and roasters.

And dairy farmers are receiving about $3 a hundredweight (100 pounds) less for their milk this year.

The drought cut corn production by 31 percent and the state soybean crop by nearly 20 percent.

The economic impact of such a sharp decline goes well beyond a farmer's fences.

Gambacorta Motor Cars, a Ford and Dodge dealership in Chestertown, is heavily dependent on nearby grain farmers for business. Bill Hunter, the sales manager, said yesterday that he hasn't seen many of his farming neighbors this year. "Pickup sales are off 75 percent in this community," he said.

Charles Smith, the manager of Enfield Equipment Inc. in the Harford County community of Pylesville, said farm equipment sales at his outlet are off 20 percent. "Some other dealers I talk to," he added, "say their sales are off as much as 50 percent."

Reider J. White, a spokesman for the Farm Credit Bank of Baltimore, the state's largest agriculture lender, said the bank is paying close attention to its customers to make certain "no one gets in over his head."

"We're not looking at any wholesale shakeout," he said, but he conceded that some poorly managed operations might go out of business.

Mr. White said he has noticed that some rural commercial banks are pulling back on their agriculture lending and investing in more profitable ventures.

Earl H. Brown, an agriculture economist with the University of Maryland, thinks that the Eastern Shore will be "hit the hardest" by the sharp drop in farm profits. "The Eastern Shore is more dependent on agriculture than other parts of the state," he said.

Mr. Brown expressed confidence that if the economy picks up and the weather is normal in the next growing season, most farmers will get through this year's difficulties.

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