March 11, 1999|By Ted Shelsby | Ted Shelsby,SUN STAFF
The extra-fat paychecks of poultry farmers and dairymen last year were not enough to offset big losses by grain growers, and the state ended 1998 with a 3 percent decline in net farm income, according to preliminary estimates released yesterday by the Maryland Agricultural Statistics Service.
Total farm income in Maryland fell $8.2 million last year to $265.4 million.
It was the second consecutive year that Maryland farmers have been hurt by low commodity prices and drought. Farm income last year was 26 percent lower than in 1996.
"This is going to have a serious impact on our rural economy," Maryland Department of Agriculture Secretary Henry A. Virts said.
"The farm equipment dealers are going to suffer. The feed dealers are going to suffer. The truck dealers, restaurants and furniture stores are going to suffer, too. Anybody who serves the farm industry is going to feel the decline."
The drop in farm profit last year was blamed primarily on low commodity prices and a summer drought that destroyed grain crops in Southern Maryland and the Eastern Shore.
"Grain prices were down, down, down last year," said Ray Garibay, head of statistics services for the Agriculture Department, in releasing his net income estimate. He added that the prospects for prices are no better for this year as a result of large supplies of grain in storage.
But not all segments of agriculture shared in the hard times.
Garibay said that 1998 will be remembered fondly by poultry and dairy farmers.
"Last year was our best in the past 10 or 12 years," said Lewis R. Riley, an Eastern Shore chicken grower and former state agriculture secretary.
"Poultry prices stayed healthy throughout 1998, and in most case farmers were paid a price bonus by the processors," Riley said.
He explained that the bonus, which totaled between $5,000 and $6,000 for his farm, is like a profit-sharing plan in which the chicken processors pay farmers above their contract price when wholesale poultry prices rise.
"It's a windfall for good prices," Riley said, "and it made 1998 a very good year for poultry growers."
State dairy farmers also benefited from record milk prices late last year due to a shortage of milk caused by weather problems in Southern California.
Ed Fry, who operates a dairy farm near Kennedyville, said farmers profited from a shortage of cheese and butter last year. "High milk prices, coupled with low grain prices, made for a very good year for the dairy industry in general," he said.
Fry noted that the good times are coming to a halt. He said the basic formula price of milk set by the U.S. Department of Agriculture dropped 37 percent last week, and farmers will feel the bite in their milk checks beginning next month.
Grain farmers have been feeling a financial pinch for more than a year.
Melvin Baile Jr., past president of the Maryland Grain Producers Association, said corn and soybean growers were lucky to break even last year.
"Prices were off 20 percent for corn and the same for soybean," said Baile, who farms 700 acres outside New Windsor in Carroll County.
He said the double whammy of low prices and poor yields was particularly hard on Southern Maryland and Eastern Shore farms that experienced the brunt of last year's drought.
Pub Date: 3/11/99
