The economic outlook for agriculture is bright

Last week, I had the chance to attend the Commodity Day of the Kentucky Farm Bureau Annual meeting in Louisville.  State and national experts discuss new findings and directions for a variety of farm enterprises through short conferences through the day.  I was able to attend the tobacco conference, the economic outlook conference and the forage conference.  Other well attended offerings were:  dairy, equine, feed grains, beef, horticulture, forestry and natural resources. 

In the Economic Outlook Conference, participants heard that Kentucky just came off a record year in 2011 with almost $5 billion in agriculture cash receipts.  With our 2012 Drought, most would think that 2012 could not fare as well, yet the statistics say differently. On the upside: Cattle prices remained high, a larger and higher priced tobacco crop is being marketed, equine is showing signs of improvement, and despite significant yield losses, the corn crop will rival poultry as the top agricultural enterprise.  As a result, the forecast is for Kentucky Agriculture Receipts to total a new record $5.3 billion.  Our net income will be boosted by significant crop insurance payments, which will enable it to remain near the top end of our typical range ($1 billion to $1.5 Billion). 

The tobacco conference discussed the world supply/demand situation, with the companies requesting more tobacco production in 2012.  In the face of the price and labor situation, would the producers respond?   They did, to the tune of 14 percent more acres planted in 2012.  Decent yield and good quality are making this the highest valued tobacco crop in the post buyout era. 

In the tobacco conference, we were made aware of a significant change made by the Risk Management Agency in the special provisions for tobacco federal crop insurance that will be effective in 2013.  The following statement appears in the “Special Provisions of Insurance 2013 and Succeeding Years for Burley Tobacco”:  Tobacco will not be insurable on any acreage planted to tobacco in the two previous crop years.  RMA is attempting to address issues where lack of rotation contributes to increased risk of crop losses, and this may have some significant impact on many local farmers. 

A member of the press asked about ‘Industrial Hemp’ during the Agriculture Outlook Conference.   A Kentucky Industrial Hemp Committee has been re-energized with the Commissioner of Agriculture as the committee chair.  While local research on crop production and marketing is limited, Canada does produce industrial hemp on approximately 40,000 acres (Kentucky’s tobacco crop is around 87,000 acres).   If legislation occurs to allow this crop to be produced as an agricultural enterprise, it is likely that the manufacturing phase will need to start and expand rapidly to match production.

In the Forage Conference, participants were reminded that summertime droughts through the past five years have had some negative impact on pastures and hayfields, and coupled with fewer acres available (some being taken out of forages and replaced by grain), emphasis should be placed on renovation and improvement.  Soil sampling is a good place to start, and certified seed of a locally tested variety should be sought.  If weather permits, many broadleaf weeds can be controlled now, still allowing addition of legumes to grass fields in the early spring.

Agriculture and weather

A long awaited rainy spell has put the Henry County Tobacco industry back into full gear.  And while the early tobacco has had the good quality and color desired by the industry, the later housed tobacco was in need of this type of humidity for its proper curing. 

The CoCoRaHS network in Henry County reports more than 2 inches of rain at the reporting stations since Friday.  Many of our ponds, lakes, and streams needed this ‘recharge’ as we head into the colder winter months, so this should be a big help to many livestock producers. 

If we look at past averages for ‘normal’ rainfall amounts for the year, Henry County generally gets 45 inches of rain.  In a quick look at the CoCoRaHS recording stations around Henry County, we are somewhat under that average with only three weeks to go.  Our stations have recorded between 35 and 40 inches for the year, which is quite a difference from last year when we recorded more than 60 inches of rain.