Recession slams Georgia agriculture industry

Washington — After initially sparing much of the agriculture industry, it looks like the recession is starting to reach down to the farm.

Prices for commodities have fallen as much as 50 percent in recent months.

Agricultural exports, which surged by an unprecedented $33 billion to new highs last year, are now expected to fall by $20 billion this year.

Farm incomes, which also reached records last year, are now projected to drop 17 percent, according to recently released figures from the U.S. Department of Agriculture. “What a difference 12 months make,” Joseph Glauber, chief economist for the Agriculture Department recently told a congressional committee exploring the recession’s impact on the agriculture industry.

Georgia is one of the East Coast’s biggest agriculture states and is the nation’s largest producer of peanuts, poultry and pecans.

Like their counterparts elsewhere, many Georgia farmers had a banner year last year, despite the recession that ravaged other industries.

But suddenly, that’s changing for many.

We “may never have seen such a transition from such a successful year to one of the worst we’ve seen in many years,” said Don McGough, commodities/marketing director for the Georgia Farm Bureau.

The salmonella outbreak tied to a Georgia peanut plant decimated that industry. A worldwide decline in poultry prices is prompting the closure of a chicken processing plant in Douglas next month and is causing some Georgia chicken farmers to sell birds for less than it costs to raise them. In recent weeks, heavy rains wiped out new plantings of vegetables and melons and delayed plantings of corn and other crops.

“I guess like always, we’ve got to take the bad along with the good,” said Leighton Cooley, a fourth-generation chicken farmer in the town of Roberta, about 80 miles south of Atlanta. “With ag, there’s always something to deal with.”

The USDA is predicting a 3 percent decline in poultry production and a 13 percent decline in chicken exports — which now account for the bulk of sales for some farmers — because of rising feed prices and declining demand from countries such as China and Russia. Poultry is Georgia’s No. 1 farm product.

Prices for cotton, which helped build the state of Georgia, are expected to fall by as much as 13 percent, and exports are expected to decline by $1.2 billion.

And then there’s the financial crisis. Many farmers rely on short-term loans from community banks to get through the planting season. With the banking industry in turmoil, it’s tough for farmers to get loans, said Rep. Jim Marshall, a Macon Democrat who is on the House Agriculture Committee, which is exploring the recession’s effects on farming.

“This is the time of year when farmers need to be investing heavily,” Marshall said. “And if they can’t find credit, they may not be able to make the investments they need to make. “The result is lower production, less profits,” he said.

Farming can be a feast-or-famine industry. Agriculture is often the last industry into a recession — people still have to eat — and often the last out of a recession.

There are some bright spots on the horizon, Georgia agriculture experts say. The nation’s push for more renewable fuels is expected to boost Georgia’s fledgling biomass fuels business. Georgia — which some call “the Saudi Arabia of biofuels” — could someday become a major supplier of switch grass, pine forest waste, peanut hulls and other byproducts that could be converted into electricity.

Farmers in Georgia could also benefit from the ongoing drought and other problems facing big agricultural states such as Arizona and California, said Scott Angle, dean and director of the University of Georgia’s College of Agricultural and Environmental Sciences. “There’s a variety of issues that are going to make agriculture in places like California continually more difficult,” Angle said. As a result, “Georgia is going to have to pick up a lot of the slack on the East Coast.”

Wes Shannon of Tifton has been farming for most of his life, through recessions and boom times and everything in between.

Heavy rains recently delayed planting on his 500-acre farm, where he grows peanuts, corn, watermelons and other crops. But it didn’t dampen his spirits.

“I’m more optimistic about agriculture than I am a lot of other industries these days,” Shannon said as he waited out a recent rainstorm.

“But I’m a farmer,” he added. “I have to be optimistic.”