On farms, going against the grain

Prices for soybeans, corn will be `dismal,' state officials fear

April 10, 2001|By Ted Shelsby | Ted Shelsby,SUN STAFF

It's planting time again, but Lawrence Meeks - like many farmers around the state - already is worried.

"The grain market is very depressed," Meeks said one day last week as he watched a soft drizzle through his kitchen window. Meeks farms about 3,000 acres in northwest Carroll County.

"Nitrogen fertilizer prices have gone through the roof," he said.

Said Dan Knopf, deputy statistician for the Maryland Department of Agriculture: "At the beginning of the growing season, everybody wants to be optimistic. But the reality this year is that things look pretty dismal for corn and soybean prices."

Bruce Gardner, an agricultural economist with the University of Maryland, College Park, said that if current corn prices were adjusted for inflation, they would be at a historic low.

Prices of soybeans, the other major grain crop in the state, aren't much better, according to Gardner.

Hagner R. Mister, state agriculture secretary, looked at a copy of a newly released state planting-intention report and saw more bad news.

The report indicates how much of each crop farmers intend to grow this year.

"Corn acreage planting is up," Mister said. "Soybean acreage planting is up, too, about 6 percent over last year.

"That means we're going to stay in a supply-and-demand crunch. There's already a big supply of grain in the country, and when you have a lot of something, prices drop," said the state's chief farm advocate.

Knopf said big corn harvests in Brazil and Argentina are also putting pressure on local grain prices.

He said the average price for the corn grown in the state in 1999 and sold last year averaged $2.27 a bushel.

"We are forecasting corn at $2 a bushel this year," Knopf said. In 1997, state farmers were receiving $3 for each bushel of corn trucked to market.

Like everyone else, farmers are paying more for fuel to heat their houses and power their cars and tractors. But the big impact of rising energy prices, according to Meeks, shows up in the cost of the nitrogen fertilizer for plants.

Meeks explained that natural gas is used in the production of nitrogen fertilizer, and the increase in gas prices is reflected in the cost of fertilizer.

"Last year we paid $85 a ton for 30 percent nitrogen fertilizer," said Meeks. "This year it's $175 or $185 a ton for the same fertilizer."

In one way, Meeks said, Maryland farmers are faring better than their colleagues in other parts of the country. "Fertilizer prices are high here," he said, "but is available, locally. In some parts of the country, there are spot shortages."

The financial plight of agriculture in the state is not as bad as some of the numbers would suggest, according to Joe Mullhausen, a 71-year-old grower who farms about 300 acres in the Prospect region of Harford County.

Mullhausen credits federal government support payments for the survival of many financially struggling farm operations.

"Without the government's loan deficiency payments [commonly called LDPs], farmers would be in big trouble," Gardner said.

Grain farmers in the state received nearly $40 million in federal payments last year. Without them, Mullhausen said, "many farmers would be up the creek without a paddle."

There are some bright spots in agriculture this year, according to Mullhausen.

"Beef cattle prices are very good," he said. "We're getting 80 cents a pound on the full," he said of beef cows shipped to slaughter. "Two years ago, prices were in the low 60s."

He credits a 9 percent increase in the per capita consumption of beef this year for the better farm price.

Meeks also said many farmers are worried about foot-and-mouth disease, a threat he said that "could prove devastating."

Roger Olson, the state veterinarian, said agriculture officials are working closely with federal agriculture officials to prevent an outbreak here.

He said agriculture officials are stopping some travelers from certain parts of Europe who are arriving at Baltimore-Washington International Airport and washing their shoes in bleach water in an effort to kill the virus.

Used farm equipment arriving at the port is inspected and sprayed with bleach water if there's a chance of any soil on the wheel carrying the disease.

Dairy farms, another major sector of production agriculture in Maryland, will continue to struggle this year, according to Gardner.

"Milk prices are coming back a little bit, but not enough to make a big difference," Gardner said. "Dairy farmers will continue to feel a financial pinch this year. Maybe it won't be as bad as last year, but it going to be bad again."

Low milk prices and high costs of production are being blamed for Maryland losing dairy farms at a rate 32 percent higher than the Northeast region of the country.

Maryland has lost nearly 30 percent of its dairy farms over the past nine years.

Mister, the state agriculture secretary, pointed out that Maryland will also lose more than half its tobacco farms this year. But the decline will not have a significant effect of the economic health of Southern Maryland, where the crop is grown, he said.

He explained that the loss of tobacco farms is due to the state's buyout program, which pays farmers to halt their production of the leaf.

Farmers will continue to receive payments from the state for 10 years, Gardner noted, and, as a result, the region will not feel the economic pinch of tobacco's demise.

"I hate to paint a gloomy picture," said Knopf, the agriculture department statistician, "but there is not much for farmers to be happy about this year."

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