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Asian Flu Impacts State's Agriculture
MISSISSIPPI STATE -- Low yields and market problems brought on by Mississippi's weather challenges and Asian economic problems resulted in an estimated 8 percent loss to the state's agriculture's total gross income.
Dr. John Robinson, agricultural economist with Mississippi State University's Extension Service, said observers should remember 1997 was a record year, and supplies were high going into 1998. The "Asian Flu" resulted in less movement of U.S. products to Pacific Rim countries.
"While some 1998 commodities stand out as dropping significantly in their farm-gate value from the previous year, we had some remarkable records set in 1997 that would have been hard to beat regardless of any single factor," Robinson said. "Most growers experienced better-than-average yields and average prices in 1997, but that was not the case in 1998, which was below even the five-year average prices and yields."
Robinson estimated the total crop value dropped about 22 percent from 1997. Cotton, soybeans, corn, rice and wheat posted losses ranging from 16 to 42 percent. Acreage, production and prices are the three main factors that impact farm-gate values from year to year. 1998 was the third year under the Freedom to Farm Act allowing growers to make planting decisions and playing havoc with commodity totals.
"Wheat lost more than 40 percent for the second year in a row. Last year, blame went to reduced acreage and blame this year goes to poor prices," Robinson said. "The outlook is making it hard for growers to make planting decision for 1999. No crop is standing out as the obvious best choice."
Corn also posted a second year of significant declines. After a record 1996 crop, corn's value drop about 35 percent in 1997 and is estimated to drop another 38 percent in 1998. Corn's farm gate value has changed from $203.6 million in 1996 to $133.3 million in 1997. For 1998, the estimated corn value is $82.4 million.
Mississippi's top crops remained poultry/eggs estimated at $1.46 billion, timber at $1.31 billion, and cotton at $541 million. Poultry/eggs were slightly higher than in 1997, but timber is down less than 1 percent and cotton dropped about 16 percent.
"The two bright spots were milk, which improved an estimated 14 percent, and catfish with about a 13 percent increase," Robinson said. "Hogs were a significant decline in the livestock picture with a 24 percent decrease, but the total livestock picture still improved slightly in 1998."
Cattle/calves increased 28 percent from 1996 to 1997, but are estimated to have decreased in 1998 by about 8 percent.
Dr. Charlie Forrest, Extension marketing specialist, said producers waited longer than normal in anticipation of better prices.
"Cattle producers entered 1998 expecting good prices. The delay in fed cattle marketing while producers waited for those better prices resulted in heavier cattle and added to the total beef tonnage," Forrest said. "Even though grain costs were down, feedlots have lost a lot of money in the last 12 to 18 months as they were limited in what they could pay for feeder cattle."
Hogs posted the biggest livestock market losses with an estimated 24 percent decline in farm-gate value.
"You have to go back to the 1950s or '60s to find hog prices as low as right now," Forrest said. "Prices for market hogs have been as low as 8 or 10 cents a pound, which means you could buy a hog ready for slaughter for $20 to $25. Without much hope for improvement in the next six months, Mississippi hog farmers will face a tough 1999."
Forrest said the outlook for cattle is better, but they will still face large amounts of competing meat supplies and an uncertain world economy.