LITTLE ROCK — Arkansas’ secretary of agriculture says 2011 has been a good year for the state’s farmers thanks to high crop and livestock prices.
But the president of the Arkansas Farm Bureau says the positive impact of those prices has been tempered by rising production costs and natural disasters.
The U.S. Department of Agriculture said last week that net farm income is forecast at a record $100.9 billion for the 2011 calendar year, a jump of 28 percentage points from 2010. Total cash income, or spendable income, is forecast at $109.8 billion, an increase of 18.9 percentage points over 2010 and $34.2 billion above the average for the previous 10 years of $75.6 billion.
“I was not surprised at the record income, because these prices that we’ve had, for crops for example, were something that we’ve always wanted and never thought would ever happen, but it’s happened,” said state Secretary of Agriculture Richard Bell.
Bell credits the high prices with increased exports and a growing demand for biofuels.
Independent reporting for Pine Bluff & Jefferson County since 1879.
“Ethanol has really changed the face of American agriculture by providing another increment of demand we never had before,” he said. “We don’t produce ethanol in the state of Arkansas, but we’re still getting the benefit of the higher prices.”
The U.S. shipped a record $137.4 billion worth of agricultural products overseas in the 2010-11 fiscal year, according to the USDA. Crops sales are projected at $204 billion for the 2011 calendar year, an increase of 19 percentage points from last year, and livestock sales are projected at $164.1 billion, a jump of 17 percentage points.
The USDA says a record 41 percent of this year’s corn crop will go to the production of ethanol, or three times the percentage from five years ago.
Soybeans, corn and rice are all fetching higher prices because of the demand for ethanol, Bell said. He said rice farmers are still feeling the effects of 2010’s poor-quality rice crop, but even rice prices are “not bad.”
Arkansas is the top rice-producing state in the nation.
Bell said livestock prices are up significantly in every area except poultry — Arkansas is second in the nation behind Georgia in poultry production — but “that’s a problem that’s caused by overproduction within the sector, and it’ll probably eventually straighten out also.”
The USDA will not release Arkansas’ farm income total for 2011 until next year. Randy Veach, who was re-elected Friday to a fourth term as president of the Arkansas Farm Bureau, said the state’s farmers are pleased with high prices, but he said 2011 has been “an extremely expensive year” for them.
“Our input costs have skyrocketed, especially when you take into consideration energy and what it costs for our fuel. In the South here, we have to irrigate. We had an extremely tough year, starting off with flooding, and it made everything late, and then we came back and (because of) the drought and extreme heat it cost a whole lot more to keep poultry cooled off, and they didn’t have enough hay for their livestock,” Veach said.
Ranchers who sold off their livestock because of the drought gained some extra income this year, “but they’re not going to have any next year because those herds are gone,” he said.
The Arkansas Farm Bureau has estimated the economic impact to Arkansas farmers from this year’s floods at $500 million. Veach said that estimate did not include the impact from the drought that followed the floods.
“The sad thing is, we may lose some farmers,” he said.
Bell said some farmers go out of business every year. He acknowledged that some areas were badly hurt by disasters, including areas along the Mississippi River that were flooded, but he said high prices helped farmers cope and noted that statewide production was mostly up from last year.
The USDA has projected Arkansas’ corn production for 2011 at 71.4 million bushels, up 25 percent from 2010; its cotton production at 1.37 million bales, up 16 percent from last year; its sorghum production at 62.9 million bushels, up 13 percent from last year; and its soybean production at 120 million bushels, up 9 percent from last year.
The only crop for which the USDA projected a decline in production is rice. The state’s rice production for the year is projected at 79.1 million hundredweight, down 32 percent from 2010.
Bell said that decline was largely a matter of choice. Because of the poor quality of the 2010 rice crop and because of rising soybean prices, many farmers chose to increase their soybean production and decrease their rice production, he said.
Bell said the USDA’s forecast speaks for itself.
“Farmers are not doing badly, is what I take out of it,” he said.
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