Georgia agriculture forecast shows mixed bag ahead for meat, row crops

About 180 people interested in Georgia agriculture gathered in Macon on Friday to learn what's ahead for the state's largest industry.

The Georgia Ag Forecast held in the Georgia Farm Bureau building on Bass Road is an annual seminar series held at different locations around the state. The meeting in Macon is the fifth of six in this year's series.

Various experts, including economists, gave an outlook of the overall economy and agricultural markets for the coming year. The forecast for some products look a little better than some others.

The growth rate of the U.S. gross domestic product is expected to be 2.5 percent this year, a little higher than the rate of 2.3 percent last year, said Kent Wolfe, director of the Center for Agribusiness and Economic Development at the University of Georgia, But GDP growth is below the average during the past 50 years of 2.9 percent.

"Even though we are doing OK, we are not doing as well as we have after past recessions," Wolfe said. "A lot of the growth is coming through consumer spending. ... So there is positive movement there."

Also since the housing market has started to recover and new house building is up, "that's what will drive the economy this year," he said. "And businesses are spending more money on infrastructure, equipment and personnel. So, those three factors will be keeping economy going through 2016.

"The Georgia economy is actually going to be doing a little bit better and housing starts will play a major role."

When it comes to the U.S. meat complex, which is beef, pork and poultry, "we are looking at a positive growth in beef" but poultry went down, he said. This is attributed mostly to outbreaks of the avian influenza in early 2015, hitting 200 locations across 15 states. About 4 million birds had to be destroyed to try to contain that outbreak.

"We lost about 14 percent of our export market" because of the outbreak and it resulted in $390 million in lost revenue, Wolfe said. "That's pretty significant."

While Japan has been a big beef user, they get most of it from Australia, so there may be an opportunity for the U.S. to fill some of that demand, he said.

The global demand several years in advance calls for increases for meat, so "that has a positive effect here in the United States as we supply poultry, pork and beef throughout the world."

The prospects for timber farms, honey bees and blueberries are looking up for the coming year.

For several row crops, the forecast is not so rosy.

"Over all '15 was a good year in terms of production," said Don Shurley, University of Georgia cooperative extension economist. "Both in the U.S. and globally production continues to kind of outpace demand. Demand has been hurt by fragile economies around the world by the strength of the dollar, which has reduced our exports."

But when production outpaces demand, it most often means weaker prices.

Prices have trending downward across the board on nearly all row crops including corn, soybeans, cotton and wheat.

"If you are a row crop producer and everything goes south at the same time, that's kind of a worse-case scenario," Shurley said. "Typically, what you would prefer to happen is that one or two of your crops to go down in price but the others hold or increase so they offset each other. That's the whole point of being diversified on your farm so you spread your risks out."

Peanut production is up and the good thing is that peanut usage is also up, but it's not quite exceeding demand, he said.

Shurley has been telling cotton growers the same as he did last year: "Be patient and wait for prices to go up."

Perry farmer Andy Thompson, who farms about 1,000 acres of cotton and peanuts, said after the meeting he's not changing what he plans to grow this year.

"It wasn't very positive," Thompson said of the row crop forecast. "But agriculture has been in a slump for a while. ... As the Chinese economy slows down, so does our market."

He seemed to take Shurley's advice to heart.

"We'll hold on to what we've got and wait for things to improve," he said.

Jim Parks, owner of Cherokee Pecan Co. in Fort Valley, said that while the experts didn't address pecans during the meeting, "pecans have been in a better position than row crops ... and the outlook is very promising."

Since pecan trees have to be about seven years old before they reach good production, "it's a long term investment," said Parks, who farms 1,000 acres of trees. "You have to be real particular ... you want to make sure the varieties you plant will sustain you 50 to 100 years."

A goal of the Georgia Department of Agriculture and others is to try to improve school nutrition, said Commissioner Gary Black. And the department would like by 2020 to have 20 percent of the school menu to be from Georgia grown products.

"There is a way to do this," Black said. "It will create market opportunities for our farmers, it will give better food for our students, so they can excel."

The series is presented by the University of Georgia College of Agricultural and Environmental Sciences, in partnership with Georgia Farm Bureau and the Georgia Department of Agriculture.

To contact writer Linda S. Morris, call 744-4223.

This story was originally published January 29, 2016 at 4:15 PM with the headline "Georgia agriculture forecast shows mixed bag ahead for meat, row crops ."