Acreage Shifts in Southern Commodities:
Why and Is It Temporary?
National Farm Business Management Conference
June 9-13, 2013
Dr. Nathan B. Smith, Amanda Smith,
and Dr. Don Shurley
10,000,000
5,000,000
15,000,000
Source: U.S. Census, NASS USDA
1997
2002
0
2007
7,451,482
6,992,992
6,047,348
40,000,000
35,000,000
33,667,177
38,657,710
39,051,211
45,000,000
4,525,365
4,194,158
3,274,137
20,000,000
15,478,091
14,843,357
13,007,625
25,000,000
2,603,915
2,270,084
2,151,219
5,701,023
5,472,128
4,895,204
6,324,156
5,822,786
5,530,825
5,567,627
5,071,537
4,691,344
8,887,861
8,412,354
7,278,098
5,572,570
4,676,567
4,478,168
3,610,304
3,715,257
2,953,340
10,271,653
9,576,047
8,432,221
4,435,041
3,732,751
3,142,958
Total Cropland
30,000,000
Major Land Use
Acreage for Principle Crops
2007-2012
23005
Principle Crops Acreage for 13 Southern States
25000
0
2007
2008
2009
2010
2011
Source: Acreage and Crop Production Annual Summary, NASS
2012
2935
4882
1699
3610
4985
6064
3671
1170
5000
7861
10000
5000
10169
15000
2290
1,000 Acres
20000
Principle Field Crops Planted
•
•
•
•
•
•
•
All Hay1
•
Barley
•
Canola
•
Corn
•
Cotton
•
Dry Edible Beans •
Oats
•
Source: Acreage, NASS
1Harvested Acres used
Peanuts
Potatoes
Proso Millet
Rice
Rye
Sorghum
Soybeans
•
•
•
•
•
Sugarbeets
Tobacco1
Sugarcane1
Sunflower
Wheat
– Durum
– Other Spring
– Winter
SE Field Crop Acreage Trends
2006-2011
(1,000 Acres)
2006
Corn
4,620
Cotton
7,088
Hay
10,895
Peanuts
1,053
Rice
1,946
Sorghum
278
Soybeans
10,802
Sweet Potato
80
Wheat
2,493
Total
39,255
2007
2008
2009
2010 2011p
7,530
6,005
6,135
6,075
6,590
4,625
3,493
3,246
4,207
5,128
11,289
11,393
11,107
11,430
11,075
1,012
1,250
930
1,091
974
1,901
2,101
2,201
2,636
1,776
751
469
178
179
335
10,034
12,862
13,517
12,320
11,920
84
86
90
99
112
3,798
5,285
3,427
2,257
3,743
41,024
42,944
40,831
40,294
41,653
Active CRP Acres
State
ALABAMA
ARKANSAS
FLORIDA
GEORGIA
KENTUCKY
LOUISIANA
MISSISSIPPI
NORTH CAROLINA
SOUTH CAROLINA
TENNESSEE
VIRGINIA
SE
US
ACTIVE CRP ACRES EXPIRE ACRES EXPIRE ACRES EXPIRE
ACRES
9/30/2011
9/30/2012
9/30/2013
394,011
80,785
78,774
35,528
239,513
12,260
33,656
15,217
56,729
9,545
11,710
6,331
312,441
23,499
33,712
15,524
350,945
36,965
46,459
35,113
327,903
11,862
38,119
23,687
846,342
101,070
166,308
65,384
117,117
12,868
10,736
7,858
158,131
20,555
35,321
14,674
199,815
34,253
28,822
51,556
63,412
5,056
5,617
4,754
3,066,359
30,718,157
Source: Monthly CRP Acreage Report, FSA
348,718
4,410,308
489,233
6,537,070
275,626
3,323,570
Factors Affecting Georgia Row Crop Acreage
• Relative Prices (cotton, corn, peanut, soybeans & wheat)
• Government Programs – used to be major driving force
• Infrastructure
– Handling Facilities - Cotton Gins, Peanut Buying Points, Grain Elevators, Port
– Processors - Shelling Plants, Feed Mills, Oilseed Processors, Ethanol Plant,
Flour Mill, Textile Mill
– Ownership – more farmers share in cotton gins, peanut buying points, sheller
• Risk Management
– Crop insurance
– Marketing Cooperatives & Contracts
• Access to Capital & Capital Costs
– Operating Loan
– Machinery and Equipment – cotton & peanuts capital intensive, more leasing
• Technology
– Seed, Chemicals, Irrigation
•
•
•
•
Cost of Inputs
Crop Rotation
Weather
Water
Georgia Trends in Row Crops
•
•
•
•
•
Increased acres
More interest in corn and soybeans
Growth in grain infrastructure
Increase in irrigation units
Clearing of edges of fields and pine
plantations brought back into production
• More corn in cotton, peanut rotation.
Typical Georgia Crop Rotations
2012 GPAC Winners
Grower
Crop Rotation
1
Peanut-cotton-corn-peanut
2
Cotton-cotton-cotton-peanut
3
Cotton-corn-corn-peanut
4
Peanut-vegetables-cotton-peanut
5
Peanut-cotton-corn-peanut
6
Peanut-corn-cotton-peanut
7
Peanut-cotton-corn-peanut
8
Peanut-cotton-cotton-peanut
Georgia Major Row Crops, Vegetables, Fruits & Nuts
Ranking by Farm Gate Receipts, Million $
2005 2006 2007 2008 2009 2010 2011 Average
Cotton
723
745
629
584
713
1,167
1,508
867
Vegetables
896
828
895
849
916
753
781
845
Peanut
423
321
382
582
401
471
586
452
Fruits/Nuts
268
306
242
268
366
451
655
365
Corn
84
103
213
237
203
227
312
197
Soybean
33
26
69
116
168
114
65
84
Wheat
38
35
62
122
57
62
83
66
Tobacco
45
55
65
70
53
46
54
55
3.2
4.4
9.2
12.2
7.5
11.5
17
9
2513
2423
2566
2840
2885
3303
4061
2942
417
345
319
311
252
318
227
313
58
100
93
107
96
117
222
12
113
Grain Sorgh.
Total
Gov’t Pmts
Crop Ins.
SUMMARY OF SOUTH GEORGIA CROP ENTERPRISE ESTIMATES, 2013
By A.R. Smith, N.B. Smith and W.D. Shurley, UGA Extension Economists, Department of Agricultural and Applied Economics
April 2013 Estimate
Conventional Tillage
IRRIGATED
Grain
NON-IRRIGATED
Int Mgmt
Grain
Cotton
1,200 lbs
$0.80 /lb
$960
Peanuts
4,500 lbs
$403 /ton
$906
Corn
200 bu
$5.70 /bu
$1,140
Soybeans
60 bu
$12.00 /bu
$720
Sorghum
100 bu
$5.13 /bu
$513
Wheat
75 bu
$6.00 /bu
$450
Cotton
750 lbs
$0.80 /lb
$600
Peanuts
3,200 lbs
$410 /ton
$656
Corn
85 bu
$5.70 /bu
$485
Soybeans
30 bu
$12.00 /bu
$360
Sorghum
65 bu
$5.13 /bu
$333
Wheat
55 bu
$6.00 /bu
$330
90
1.21
147
105
93
54
14
50
105
50
54
9
32
53
339
76
184
147
88
0.76
113
53
132
76
117
104
75
15
10
49
24
97
28
16
175
15
78
22
41
147
15
34
22
15
73
48
73
34
27
27
17
97
12
20
23
14
61
11
15
27
17
42
12
36
37
18
71
15
10
47
24
73
48
27
17
23
14
27
17
21
10
14
12
27
31
34
37
12
29
11
22
12
24
7
15
18
-10
19
20
11
11
10
14
-6
16
9
8
7
7
61
31
7
20
5
$701
$396
$336
$435
38
10
$563
26
$560
54
15
$676
$317
$254
$216
RETURN ABOVE VARIABLE COST per ACRE
BREAKEVEN PRICE (Variable Cost)
FIXED COSTS per ACRE
Machinery and Equipment
Irrigation
Buildings
Miscellaneous Overhead
$400
$0.47 /lb
$231
$300 /ton
$439
$3.51 /bu
$117
$3.96 /bu
$114
$4.48 /bu
$165
$0.58 /lb
$93
$352 /ton
$167
$3.73 /bu
$79
$3.91 /bu
$114
$3.92 /bu
116
120
146
120
61
120
55
120
58
120
60
115
146
61
55
58
36
28
34
35
17
20
17
22
28
16
12
13
11
TOTAL SPECIFIED FIXED COSTS per ACRE
$264
$300
$216
$192
$198
$77
$137
$175
$76
$67
$71
$47
TOTAL COST EXCL. LAND & MGT per ACRE
RETURN TO LAND AND MGT per ACRE
$825
$135
$976
-$70
$917
$223
$533
$187
$594
-$81
$412
$38
$572
$28
$737
-$81
$394
$91
$309
$51
$325
$8
$263
$67
$0.69 /lb
1,031 lbs
$434 /ton
4,846 lbs
$4.58 /bu
161 bu
$5.94 /bu
116 bu
$5.50 /bu
69 bu
$0.76 /lb
715 lbs
$461 /ton
3,597 lbs
$4.63 /bu
69 bu
$10.28 /bu
26 bu
$5.00 /bu
63 bu
$4.78 /bu
44 bu
EXPECTED YIELD per ACRE
EXPECTED SEASON AVG PRICE
GROSS RETURN per ACRE
VARIABLE COSTS per ACRE
Seed
BWEP
Fertilizer & Lime*
Chicken Litter
Chemicals
Custom Application/Hand Weeding
Scouting
Fuel and Lube**
Repairs and Maintenance
Irrigation***
Labor
Insurance
Land Rent
Other
Interest on Operating Capital
Gin & Warehouse (net after cottonseed)
Drying and Cleaning
Marketing and Fees
TOTAL VARIABLE COSTS per ACRE
BREAKEVEN PRICE (Total Costs)
BREAKEVEN YIELD per ACRE
* Expected fertilizer $/lb. of nutrient are as follows:
N=
$0.70
$341
$379
$5.68 /bu
$8.89 /bu
44 bu
P= $0.50
$241
$119
$8.04 /bu
K= $0.50
** Season Average Diesel fuel price of:
$3.75 per Gallon
*** Average of diesel and electric irrigation application costs. Electric is estimated at $7/appl and diesel is estimated at $17.25/appl when diesel cost $3.75/gal.
Crop Comparison Tool
2013 Net Returns Comparison, Non-Irrigated
Expected Yield
Expected Average Price
Crop Income Per Acre
Variable Costs Per Acre
Net Return Above Variable Cost
Corn
85
$6.00
$510
$326
$184
Net Return Above Variable Cost
& $75 Land Rent
$109
Cotton Peanuts Sorghum Soybeans
750
3,200
65
30
$0.78
$400
$5.40 $12.00
$585
$640
$351
$360
$440
$571
$261
$258
$145
$69
$90
$102
$70
($6)
$15
Computer Spreadsheet Budgets
Printable Budgets
Crop Comparison Tool
http://www.ces.uga.edu/Agriculture/agecon/new.html
$27
2013 Net Returns Comparison, Irrigated
Expected Yield
Expected Average Price
Crop Income Per Acre
Variable Costs Per Acre
Net Return Above Variable Cost
Net Return Above Variable Cost
& $200 Land Rent
Corn
200
$6.00
$1,200
$709
$491
$306
Cotton Peanuts Sorghum Soybeans
1,200
4,500
100
60
$0.78
$400
$5.40 $12.00
$936
$900
$540
$720
$567
$680
$396
$346
$369
$220
$144
$374
$184
$35
($41)
Computer Spreadsheet Budgets
Printable Budgets
Crop Comparison Tool
http://www.ces.uga.edu/Agriculture/agecon/new.html
2013 Ag Forecast
$189
Comparison of 2013 Estimated Net Returns, Georgia, Irrigated
Corn
Cotton
Peanuts
Soybeans
Expected Yield
200
1,200
4,500
60
Expected Average Price1
$5.75
$0.82
$450
$11.75
Crop Income
$1,150
$984
$1012
$705
Variable Costs2
$709
$567
$680
$346
Net Return Per Acre Above
VC
Net Return per Acre Above
VC & $185 Land Rent
$441
$417
$332
$359
$256
$232
$147
$174
Comparison of 2013 Estimated Net Returns, Georgia, Non-Irrigated
Corn
Cotton
Peanuts
Soybeans
Expected Yield
85
750
3,200
30
Expected Average Price1
$5.75
$0.82
$450
$11.75
Crop Income
$488
$615
$720
$352
Variable Costs2
$326
$440
$571
$258
Net Return Per Acre Above
VC
Net Return Per Acre Above
VC + $75 Land Rent
$162
$175
$149
$94
$87
$100
$74
$19
1/ Basis the futures prices as of1/15/2013. Peanut price is expected average price.
2/ Assumes Jan 2013 costs, Crop Comparison Tool, Department of Agricultural and Applied Economics, University of
Georgia
Georgia 7 Major Row Crops Planted Acres*
(1,000 Acres)
2007
510
2008
370
2009
420
2010
295
2011
345
2012 2013P 2013*
345
450
495
Cotton
1030
Peanuts
530
Sorghum, Grain
65
Soybeans
295
Tobacco (harvested)18.5
Wheat
360
Total
2809
940
690
60
430
16
480
2986
1000
510
55
470
13.8
340
2809
1400
565
45
270
11.4
170
2756
1600
475
50
155
11.9
250
2887
1290
735
55
220
10
290
2945
Corn
Compiled by Nathan Smith, UGA Extension Economist,
Source: NASS USDA, QucikStats and Propsective Plantings, March 28, 2013
1190
470
60
400
10.5
410
2991
1300
475
65
280
11
400
3026
SWOT Analysis for SE Row Crops
•
•
•
•
•
•
•
•
Strengths
Productive Soils
Water resources
Longer season
Sandy soils and climate for
peanuts, cotton
Opportunities
Diversification
Respond to market signals
Proximity to ports
Specialty markets
•
•
•
•
•
Weaknesses
Need fertility help
Topsoil depth
Dryland yields
Smaller, irregular fields
Grains infrastructure
•
•
•
•
•
Threats
Climate change
Pests
Population growth
Water use & availability
Southern specific cultivars
Thank You
Nathan Smith
nathans@uga.edu
229-386-3512