`A good year' is foreseen, but not for all

Farmers: The poultry and livestock industries should do well, but grain and dairy farmers can expect weak prices.


January 20, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

As state farmers prepare for the new planting season, the outlook is bright for poultry, livestock, and greenhouse and nursery farmers, but grain farmers and dairy farmers will continue to struggle.

"There are some trouble spots, but 2002 could be a good year for state farmers," said state Agriculture Secretary Hagner R. Mister. "That is providing we get some rain."

For the second consecutive year, corn literally piled up on Maryland's Eastern Shore.

The 30- to 40-foot mountains of grain were evidence of another bumper harvest for state grain farmers but also an indication of troubled times in the year ahead.

"We're in a grain surplus mode - a big grain surplus mode," Ray Garibay, state statistician for the Maryland Department of Agriculture's crop reporting service, said of the huge piles. "And that doesn't bode well for grain prices in 2002."

Bruce Gardner, a University of Maryland, College Park agriculture economist, agreed. "There is nothing optimistic in the outlook for grain farmers," he said. "Prices may be up a bit, but they still look pretty bleak."

Gardner said a worldwide supply and demand imbalance for grain has kept prices depressed for the past four years.

"Unless something unexpected happens, unless there is a major catastrophe in some part of the world that boosts U.S. grain exports, I don't see the situation getting much better," Gardner said.

He said soybeans that sold for $4.40 to $4.55 a bushel last year will probably bring no more than $4.70 a bushel this year. Corn prices are projected to rise from $1.85 last year to $2 this year.

As recently as the spring of 1997, Maryland farmers were getting nearly $8.50 a bushel for their soybeans and corn was selling for more than $3 a bushel.

"It's going to take the federal government's deficiency payments to keep farmers afloat this year," Gardner said. Without these payments, he said, many would be in serious financial trouble.

Other predictions for this year by state agriculture officials include:

Continued friction between farmers and the state over the Water Quality Improvement Act of 1998.

A return of tough times for dairy farmers.

The near demise of Maryland's more than 350-year-old tobacco industry.

Good times for poultry processors and the horticulture industry, the two largest sectors of state farming business.

Stable farm loan rates.

Many state farmers are angry over being required to have nutrient-management plans designed to prevent the runoff of excess nutrients from farmland into the Chesapeake Bay.

The requirements stem from the Water Quality Improvement Act of 1998, which was passed by the General Assembly after farm runoff was suspected of causing outbreaks of Pfiesteria piscicida. The resulting fish kills led to the temporary closing of portions of three Maryland waterways, triggered panic over the safety of Maryland seafood and disrupted the state tourism industry.

Farmers argue that no scientific proof links Pfiesteria to farming operations. Some say they will ignore the state regulations.

A small percentage of Maryland farmers met the year-end deadline for filing their nutrient-management plans with the state Department of Agriculture.

Steve Weber, president of the Maryland Farm Bureau, the state's largest farm organization, said he will work with legislative leaders to persuade Gov. Parris N. Glendening or the General Assembly to delay implementation of the regulations for at least two years.

"We think the plan needs to be fixed," Weber said. "We think the regulations need a serious review."

The good times enjoyed by dairy farmers in recent months are not expected to carry into the new year. Gardner said milk prices are expected to decline even more.

"The milk market is tremendously unstable," he said. "This is a real area of risk."

The same can be said for the state's tobacco industry, which dates back to shortly after the first settlers landed at St. Clement's Island in 1634.

"Tobacco is disappearing rapidly in Southern Maryland," said Mister, a former tobacco grower. The crop being readied for sale this spring is expected to be 70 percent smaller than last year's sale.

Mister sees another good year for the state's giant poultry industry. Broiler sales totaled about $460 million last year and accounted for about a third of total value of farm products.

"I think that industry is viable today, and it should be viable in 2002," Mister said.

The greenhouse and nursery business, the fastest-growing sector of agriculture in the state, is expected to lose some of its momentum this year. Garibay said the industry posted $1.2 billion in wholesale and retail sales last year, and has been growing at a 10 percent annual rate in recent years.

He expects the industry "to be level at best, unless something happens to the economy and construction picks up."

Farmers forced to borrow money to put crops in the ground this year can expect favorable rates.

"We have seen rates to our borrowers drop 200 to 250 basis points [2 to 2.5 percentage points] this year, and we expect them to remain stable," said J. Robert Frazee, president and chief executive of MidAtlantic Farm Credit.

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