`Not great ... but a better year' for Md. farms

Gains might not extend to dairies, tobacco


January 12, 2003|By Ted Shelsby | Ted Shelsby,SUN STAFF

As state farmers close out their books on a year marked by severe drought, they can look forward to improved markets in 2003, experts said.

"Not a great year, but a better year," said Keith Collins, the U.S. Department of Agriculture's chief economist.

Prices for corn and soybeans should rise, and cattlemen and pig farmers also should fare better, he said. Collins also sees improvement in the poultry industry - a major component of Maryland agriculture.

Other predictions by state agriculture officials include:

A continuation of tough times for dairy farmers.

An improvement in relations between the governor's office and the agriculture industry.

A continued decline of Maryland's more-than-350- year-old tobacco industry.

Little, if any, change in farm loan interest rates.

There are also hints of possible movement toward resolving the dispute over repair of the port of Baltimore's only grain elevator.

Collins said U.S. net cash farm income - income minus expenses - should rise this year. "It won't reach the $60 billion level of 2001, but it will be better than the $51 billion in 2002," he said.

He foresees corn prices rising 22 percent and soybean prices up 24 percent.

He expects declines in cattle and hog production to boost farm beef prices by 11 percent and pork by 5 percent.

As for poultry, which accounts for about 35 percent of Maryland's farm sales, Collins said the USDA is projecting that wholesale prices will rise 6 percent to 59 cents a pound.

State farmers are hoping for a relaxation of state laws dealing with farm runoff and chicken waste.

Stephen Weber, president of the Maryland Farm Bureau, the state's largest farm organization, and owner of the Weber's Farm store in Parkville, said Gov.-elect Robert L. Ehrlich Jr. has promised the Farm Bureau that he will take a look at the nutrient management laws to determine if changes are needed or if a delay in implementing the regulations is in order.

The Water Quality Improvement Act of 1998 was passed by the General Assembly after farm runoff was suspected of causing a Pfiesteria piscicida outbreak in the Chesapeake Bay. 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.

Weber said poultry processors are hoping the state will back away from holding chicken-processing companies responsible for getting rid of the excess waste generated by their contract chicken growers.

Weber said the Farm Bureau will be seeking state funds to help pay for repair and reopening of the port of Baltimore's grain elevator. The elevator collapsed in June 2001 as a result of storm damage. A state study estimated that the lack of a grain pier in Baltimore is costing Central Maryland grain farmers $25 million a year in lost revenue.

Like other borrowers, farmers will benefit from low-interest rates again this year, according to Robert Frazee, president of MidAtlantic Farm Credit, the state's largest agricultural lender.

"I don't see anything in the economy that will result in any significant increase in interest rates," Frazee said. "They may swing a little down or a little up, but we see fairly stable rates."

Hagner R. Mister, Maryland's agriculture secretary, said the state's tobacco industry would continue to shrink and that dairy farmers would still be squeezed by low prices. The state has a buyout program for tobacco farmers.

Frazee and Collins agree that dairy farmers will continue to struggle to make ends meet.

"Things will be tough, at least for the first half of the year," Frazee said. He thinks that prices could improve a little bit in the second half as production declines.

Collins said milk prices paid farmers reached a 20-year low last year and are expected to improve only slightly this year.

"Overall, I feel like we are going to have a good year, if the weather cooperates," Mister said. "Last year, with such a serious drought, was a disaster. We're due for a good year."

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