Georgia’s Agribusiness
Outlook
Presented by:
John C. McKissick
The Center for Agribusiness
and Economic Development
www.caed.uga.edu
College of Agricultural
and Environmental Sciences
The University of Georgia
Food and Fiber Production and Directly Related
Manufacturing IMPACT as % of Total Output
0 - 10%
10 - 25%
25 - 40%
40 - 60%
60 - 84%
Opportunities/Challenges
’07?
After a “Challenged” ’06!
•
•
•
•
Opportunities
Under 2002 farm bill this
crop year
First time since 1996
“real” cropping
alternatives
High grain/oilseed prices
Demand for some food
products/”farm fresh”,
local grown, “Valueadded”
•
•
•
•
•
Challenges
High grain/oilseed prices
impact livestock poultry
industry (60% of Farm
gate)
Food quality/safety
impacts demand
Farm/agribusiness labor
Long-Term – New Farm
Bill!
WEATHER
2006 Total Farm Gate Value
GA = $10.4 billion
2005 = $10.6 billion
Poultry &
Eggs
42.4%
Fruits &
Nuts
3.0%
Other
Income
6.2%
$2,000,000 - $20,000,000
$20,000,000 - $45,000,000
$45,000,000 - $80,000,000
$80,000,000 - $200,000,000
$200,000,000 - $316,814,000
Forestry &
Products
6.4%
Ornamental
Horticulture
7.4%
Vegetables
8.0%
Row &
Forage
Livestock & Crops
Aquaculture 14.5%
12.2%
2005
Farm Gate Value
Commodity Group
Comparisons:
2005-2006
Poultry &
Eggs
42.7%
Fruits &
Nuts
2.5%
Other
Income
6.3%
Forestry &
Products
6.1%
Ornamental Vegetables
8.5%
Horticulture
6.6%
Livestock &
Aquaculture
12.3%
Row &
Forage
Crops
15.1%
Fruits &
Nuts
3.0%
2006
Poultry &
Eggs
42.4%
Other
Income
6.2%
Farm Gate Value
2005 = $10.6 billion
2006 = $10.4 billion
Forestry &
Products
6.4%
Ornamental
Horticulture
7.4%
Vegetables
8.0%
Livestock &
Aquaculture
12.2%
Row &
Forage
Crops
14.5%
Farm Value Declined in 2006, First
In 10 Years! What About 2007?
$0 - $20,000,000
$20,000,000 - $45,000,000
$45,000,000 - $80,000,000
$80,000,000 - $200,000,000
$200,000,000 - $316,814,000
• Crop/Forage Prices
improved, production?
• Poultry adjustments to
high feed cost results
in higher prices
• Vegetable/fruits
modest growth
• Ornamental markets
mixed
• Livestock reduced with
Beef prices down
Bottom Line – Improved in 2007
Before Freeze and Drought
2006 Row & Forage Crops
Farm Gate Value
GA = $1.5 billion
2005 = $1.6 billion
Hay
8.66%
Oats
0.42%
Other
0.68%
Cotton
49.62%
Peanuts
21.39%
$0 - $1,000,000
$1,000,000 - $5,000,000
$5,000,000 - $15,000,000
$15,000,000 - $30,000,000
$30,000,000 - $55,000,000
Corn
6.83%
Barley
0.01%
Straw Sorghum
Wheat
1.64%
0.29%
2.31% Tobacco Soybeans
3.68%
1.75%
Rye
0.69%
Silage
2.04%
“Fueling” the Opportunities and
Challenges - Corn Ethanol
4000
3500
70 New Plants in 2007?
Adds 1BB to Corn Demand
Million Bushels
3000
2500
2000
$4.25/bu = Ethanol B.E.
1500
1000
500
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Corn Production Can’t Keep
Up with Ethanol Demand
Production
Use
End Stocks
14,000
Livestock/Export B.E. = ?
12,000
2006 - Ga. Use 212 MB, Prod. 26 MB
Million Bushels
10,000
8,000
6,000
4,000
2,000
0
2000
2001
2002
2003
2004
2005
2006
Ethanol Breakeven Matrix
Corn
Price
$2.50
$3.00
$3.50
$4.00
$4.25
$1.50
$0.13
-$0.05
-$0.23
-$0.41
-$0.50
Ethanol Price
$1.75
$0.38
$0.20
$0.02
-$0.16
-$0.25
$2.00
$0.63
$0.45
$0.27
$0.09
$0.00
Biodiesel Breakeven Matrix
Biodiesel Price
Oil Price
$2.00
$2.25
$2.50
$2.75
$0.20
$0.03
$0.28
$0.53
$0.78
$0.25
($0.36)
($0.11)
$0.14
$0.39
$0.30
($0.74)
($0.49)
($0.24)
$0.01
Acres usually chase markets, NOW markets are chasing potential acres!
Need 8 to10 M more corn acres, from where will it come ?
200
75.5
67.5
57.3
57.3
15.3
13.2
78.3
88.3
150
100
50
0
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Planted Millions
250
Year
Corn
P eanuts
Cotton
Wheat
Soybeans
3500
150
230
275
300
1400
1100
500
580
0
280
550
450
2500
2000
1500
1000
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Planted 1000
3000
Year
Corn
Peanuts Cotton
Wheat
Soybeans
Planting Intentions: Georgia and U.S.
GA 2007
1,000 Ac
GA 2006
1,000 Ac
GA
%Chg
US 2007
1,000 Ac
US 2006
1,000 Ac
US
%Chg
500
280
+78.6%
90,454
78,327
+15.5%
1,150
1,400
-17.9%
12,147
15,274
-20.5
Hay
680
650
+4.6%
63,056
60,807
+3.7%
Oats
70
70
0%
4,029
4,168
-3.3%
Peanuts
500
580
-13.8%
1,197
1,240
-3.5%
Sorghum
40
40
0%
7,109
6,522
+9.0%
Soybeans
250
155
+61.3%
67,140
75,522
-11.1%
Tobacco
19
17
+11.8%
344,170
338,950
+1.5%
Wheat
400
230
+73.9%
60,303
57,344
+5.2%
CROP
Corn
Cotton
Primary data source: Prospective Plantings, March 2008, NASS
Peanut Production Falls Below Use
in 2006-7? $425/ton Prices but who
pays storage/handle? Demand???
3000
2500
1500
1000
500
Food Use
Crush
Production
Exports
Seed, Shrink, Resid
Carryover
'07 Proj.
'06 Est.
'05
'04
'03
'02
'01
'00
99
98
97
96
95
94
93
92
91
0
90
1,000 Tons
2000
Cotton lagging in acreage race,
acreage would have to decline by
30% or more to offset ‘06 use
decline!
-4.5 MB
Farm Bill Implications for Crop
Producers
• Less spending on commodity programs, but same
general program structure – good for land owners
• Some spending will be diverted from 5 major program
crops to specialty crops.
• More in conservation, less in commodity programs
• Lower payment limitations and/or lower means-tests
(if not done in agriculture committees, will likely be
debated on floor).
– Peanuts may lose separate payment limitation.
2006 Livestock & Aquaculture
Farm Gate Value
GA = $1.266 billion
2005 = $1.299 billion
Beef Stockers
6.2%
Catfish
0.5%
Beef Cows
28.1%
$0 - $3,000,000
$3,000,000 - $5,000,000
$5,000,000 - $10,000,000
$10,000,000 - $15,000,000
$15,000,000 - $36,241,000
Beef Cattle
Fin Out Co
1.7%
Sheep
0.05%
Quail
1.8%
Pork-Feeder
Pork-Finish
pigs
only
2.5%
1.9%
Dairy
18.4%
Goats
1.1%
Horses-boardtrain-breed
23.2%
Horses-raised
Other
9.7%
2.1%
Pork-Farrowfinish
2.8%
Ga. Beef Cattle Prices Feel Impact of Higher
Corn Prices
M E D . & L R G . # 1 & 2 S T E E R C A L F P R IC E S
5 0 0 -6 0 0 P o unds , G e o rgia , W e e kly
$ P er C wt.
125
120
A vg.
2001-05
115
110
105
30%
2006
100
95
90
2007
85
T
O
C
L
JU
R
P
A
JA
N
80
$/Cwt.
If Not For Improved Beef/Red Meat Demand,
Adjustments Would Be More Severe!
Beef Demand – Production vs. Price Received
9 5 .0 0
9 0 .0 0
05
8 5 .0 0
8 0 .0 0
7 5 .0 0
O ld D e m a n d
06 N ew D em and
03
04
2007
90
93
9192
01
7 0 .0 0
00
94
95 97
96
6 5 .0 0
99
02
98
6 0 .0 0
5 5 .0 0
22.00
23.00
2 4 .0 0
25.00
26.00
B e e f P ro d u c ti o n , M i l . P o u n d s
27.00
28.00
THE BEEF CATTLE CYCLE
4
Increase in Cattle Inventory Means
Increased Beef Supplies 3 Years Later
3
2
1
0
-1
-2
-3
-4
-5
Percentage Change Yr. over Yr.
-6
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
Total Red Meat and Poultry
Production
Bil. Pounds
24.0
23.0
Avg.
2001/05
22.0
2006
21.0
20.0
2007
19.0
18.0
2008
JAN -MAR
APR -JU N
JU L -SEP
OC T-D EC
Georgia Milk Prices
Recover
$ 1 7 .0 0
1 6 .6 5
1 6 .3 4
1 6 .4 1
$ 1 6 .0 0
1 5 .9 4
1 5 .8 9
1 5 .7 0
1 5 .7 9
1 5 .3 3
1 5 .4 5
$ 1 5 .0 0
$/
c
w
t
1 5 .2 9
1 4 .9 0
1 4 .6 7
$ 1 4 .0 0
$ 1 3 .0 0
$ 1 2 .0 0
2006
2 0 0 7 (e s t)
5 -Ye a r A v g .
Milk production
slows to half of
2006’s 2.8%
increase
$ 1 1 .0 0
Jan
Fe b
M ar
Ap r
M ay
Jun
Ju l
Au g
Se p
O ct
Nov
De c
Georgia Livestock – Generally Lower
Prices or Returns?
• GRAIN prices increases
real risk to all livestock.
Further adjustments, i.e.
reduced production or lower
calf prices will be required
with $5 corn!
• RED MEAT demand still
good !
• BEEF CATTLE – Grain
reduces calf prices in
2007,but still relatively
good! Production is
GROWING in US but
drought management in Ga.
• PORK production growing
nationally ,but prices up
supported by strong
exports.
• DAIRY – Production up,
prices up, but only enough
over 5 yr avg. to cover
added feed cost.
• HORSES – pleasure
agriculture continues on
the rise
2006 Poultry & Egg
Farm Gate Value
GA = $4.4 billion
2005 = $4.5 billion
Layers-Table
Other
egg
0.2%
Layers2.5%
Hatching egg
7.7%
$0 - $1,000,000
$1,000,000 - $10,000,000
$10,000,000 - $40,000,000
$40,000,000 - $100,000,000
$100,000,000 - $280,633,000
Breeder
Pullet Unit
3.3%
BroilerIntegrator
75.2%
BroilerGrower
11.0%
Mill.Birds
Birds
Mil.
180
Broiler Producers Adjust To
Higher Feed Cost
Avg.
2001-05
175
170
165
2006
160
Broiler Chick Placements
155
2007
T
O
C
L
JU
R
AP
JA
N
150
Broiler Prices Much Improved –
Better Demand, Production Lower
Cents Per Pound
75
Broiler Prices, 12 city
73
Avg.
2001-05
71
69
67
2006
65
63
61
2007
59
T
O
C
JU
L
AP
R
57
JA
N
$/
c
w
t
Broiler Production Drops .8 lbs. Per
Person in 2007! 2008 - See Corn?
Bil. Pounds
9.5
9.0
Avg.
2001/05
8.5
2006
8.0
7.5
2007
7.0
6.5
2008
JAN -MAR
APR -JU N
JU L -SEP
OC T-D EC
Farm Bill Implications for Livestock
Producers
• Additional spending on ethanol development.
– Implies higher feed cost for poultry and swine producers.
Lower prices for feeder cattle.
• No further postponement in mandatory country of
origin labeling.
– Affects beef and swine producers.
• Restrictions on long-term packer ownership or
contracting of livestock (Harkin and Peterson have
both supported this in the past).
2006 Fruits & Nuts
Farm Gate Value
GA = $306 million
2005 = $268 million
Strawberries
1.6%
$0 - $50,000
$50,000 - $300,000
$300,000 - $1,500,000
$1,500,000 - $5,000,000
$5,000,000 - $34,000,000
Pecans
46.8%
Apples
1.3%
Blueberries
24.8%
Blackberries
1.9%
Grapes
3.1%
Other
0.7%
Peaches
19.8%
2006 Vegetables
Farm Gate Value
GA = $828 million
2005 = $896 million
Tomato
6.8%
Bell Peppers
Zucchini
9.3%Cabbage
Watermelon
2.3%
3.8%
13.4%
$0 - $10,000
$10,000 - $200,000
$200,000 - $3,000,000
$3,000,000 - $15,000,000
$15,000,000 - $141,237,000
Cantaloupe
7.3%
Cucumbers
5.3%
Eggplant
1.2%
Sweet
Corn
12.5%
Snap Beans
Other
Squash
Southern 5.9%
Other Veges Peppers
3.3%
Peas
8.0%
1.39%
1.3%
Okra
0.2%
Onions
15.9%
Greens
7.9%
Georgia Fruits, Nuts and Vegetables
• …..in 2007
• Capitalized on our main
competitive advantage –
proximity to large diversified
markets
• Move to value added – farm
processing. Fresh saturated
except for specialty/ethnic
markets.
• Expected gains – Sweet Corn,
Fresh packaged, Onions….
• Labor? Food Safety, quality?
Demand?
2006 Ornamental Horticulture
Farm Gate Value
GA = $765 million
2005 = $699 million
Field Nursery
13.7%
$0 - $1,000,000
$1,000,000 - $3,000,000
$3,000,000 - $6,000,000
$6,000,000 - $10,000,000
$10,000,000 - $43,415,000
Container
Nursery
27.5%
Greenhouse
35.9%
Other
1.0%
Turfgrass
21.9%
Ornamental Horticulture
•
•
•
•
•
Gains marginal
Market advantage –Ga. 4th
Fastest Growing State offsets
declining housing starts
Declining energy cost
support disposable income
growth for discretionary
goods?
Some oversupply – new
greenhouses, annuals?
New demand – new turf
species, environmental
landscaping, sod turf
requirements, tree-scaping
(field container)
Labor for installation,
maintenance and production
operations?
2006 Forestry & Products
Farm Gate Value
GA = $663 million
2005 = $644 million
Christmas
Trees
1.4%
$0 - $1,000,000
$1,000,000 - $3,000,000
$3,000,000 - $5,000,000
$5,000,000 - $10,000,000
$10,000,000 - $22,260,000
Other
0.9%
Timber
88.3%
Pine Straw
9.4%
2006 Ag-based & Nature-based Tourism
Farm Gate Value = $78 million
2005 = $72 million
Nature-based =
$50.8 million
Guide
services
31.8%
Other Naturebased
2.9%
Wildlife
Corn Maze
observation
1.5%
0.5%
Equestrian
trail rides
2.7%
Hayrides
0.6%
School tours
1.8%
Special
attractions
4.9%
Fishing
9.6%
Camping
20.4%
Special
events
Other-Ag- 14.6%
based
8.7%
Ag-based =
$27.1 million
Contact Information
Prepared by
John McKissick and Sue Boatright
Center for Agribusiness & Economic Development
“Adding Value to Georgia's Agricultural Economy
Through Research and Extension“
To learn more about Georgia counties, go to:
http://www.caed.uga.edu/
...click on “Georgia Statistics System”
Special Area Report
SA-07-14
2007