Even with cotton still at the gins and grain still in some bins, the outcome for 2003 is clear and worthy of some hearty congratulations to farmers who after years of depressed prices and challenging growing seasons, produced one of, if not, the best crop in Mississippi history.

In preliminary projections released by Mississippi State University in mid-December, the overall production value of Mississippi’s major agricultural industries exceeded $5.65 billion—a 30 percent increase from 2002’s value of $4.34 billion. (Please see Chart 1 on page 25.)

“A good growing season, a compatible harvest and overall improvements in commodity markets resulted in high yields and increased profitability for Mississippi producers in 2003, on average,” says Dr. Lester Spell, commissioner of the Mississippi Department of Agriculture and Commerce. “With agriculture being the state’s No. 1 industry, the immediate effect will be more dollars in the pockets of those working in agriculture, which directly or indirectly employs about 30 percent of the state’s workforce.”

Initially, this will result in more spending in the retail sector, and those same dollars will continue to turn over from there several times, affecting most all citizens of the state in one way or another.

“With agriculture having such a large influence on Mississippi, I’ve always said— ‘when agriculture does well, the state economy does well.’ The 2003 agricultural production year was a win for Mississippi,” added Spell. “I think the effects of a great production year provided immediate stimulus to Mississippi’s economy, and with our livestock and row crop producers eager to gear up again to meet current demands in the highly competitive global marketplace, all sectors of Mississippi will continue to see the benefits of profitability in agriculture.”

MSU economist explains 2003 projections
“Mississippi’s farmers are, for the most part, reflecting on a very good year,” says John D. Anderson, an agricultural economist at Mississippi State University. Records for production per acre were broken for cotton, soybeans and possibly rice. And, at various times in the year, market prices offered profiting-taking opportunities on most crops.
“The rising tide however, is not lifting all boats. The catfish industry continues to suffer from low prices and the dairy industry only recently began to see significant improved in milk prices.”

Anderson says a long-awaited price recovery for catfish seemed possible in the spring of 2003 but “fizzled out in early summer.”

However, catfish producers, previously excluded from government disaster payments, did receive some support in 2003 from a feed compensation program tied to the 2003 crop and livestock disaster assistance program.

Cotton value jumps more than 75 percent
While many commodities are valuable and keep billions of dollars turning over in the Delta’s economy, none are as visible at the state’s “white gold.” Cotton is a high input crop that can take growers on a profitably ride more unpredictable than the best engineered roller coasters. 2003 is a perfect example.

In 2002, Mississippi producers grew for the most part an outstanding crop and then watched it rot in the fields as hurricanes flooded fields and delayed and eventually even prevented harvest of some of that crop. Prices fell to well below government stability levels, and when the end finally came, the state’s cotton crop yielded 808 pounds an acre with poor to unmarketable cottonseed. The overall value was only $439 million.

This year most growers faced ideal growing conditions and almost perfect harvesting weather. A record yield of 916 pounds of lint per acre was recorded, and with cotton prices offering several marketing opportunities in the 70- to 80-cent range, initial projections are placing the value of the 2003 crop at $780 million—a 77.9 percent increase in value from 2002.

Woods Eastland, president and CEO of Staplcotn, the largest producer-owned cotton cooperative in the United States, called the 2003 crop “a huge improvement over 2002 in yields, and a good improvement in quality.

“The bad harvest weather that plagued the Delta last year was replaced by one of the best falls ever, bringing the best color grades perhaps ever.”

Micronaire and staple length, which are a major factor in the industry’s ability to market the cotton crop domestically and internationally, were also a big improvement according to Eastland. “Average grades in 2003 were almost a two-cent-per-pound improvement over 2002. The mood of farmers is good, because yields for all crops were good, and cash prices are so much better.”

Soybeans also rebound with record-busting yields, while rice values gets price boost
“Soybeans’ value of production is projected to be up sharply,” says Anderson. Even though our acreage in 2003 was down slightly, higher yields and improving prices combined to increase the value of production almost 50 percent. Soybeans farm value in 2002 was $243 million, but jumped to a projected $363 million in 2003.

“Prices improved fairly dramatically in late summer as hot, dry weather in the mid-west reduced the size and quality of the crop in that region,” says Anderson. “The potential for strong export demand has continued to support prices.

“Probably no crop has seen prices improve as dramatically as rice,” says Anderson. “While prices are still hovering around the loan rate, which is low by historical standards, that represents a market improvement from a year ago.”

Other projected commodity values for 2003 are: corn, $145 million; rice, $111 million; hay, $78 million; wheat, $19.5 million; grain sorghum, $14 million; sweet potatoes, $58 million; and horticultural crops, $73 million.

Delayed and some new-program payments infiltrate ag economy with $828 million
Of all revenue-producing aspects of production agriculture in 2003, government payments were up the most startling percent at $828 million or 231 percent above payments received by growers in 2002.

“This may seem strange, since prices for most commodities improved in 2003, but the explanation for this is mostly due to the timing of the 2002 Farm Bill,” explained the MSU economist.

One of the provisions of the 2002 Farm Bill allowed farmers and landowners a one-time opportunity to update their farm’s base acres and yields. This represents the historic production of a farm and some key government payments are tied to this historic production.
“The bottom line is due to the schedule of base updating, few farmers received payments on their 2002 crops until well into 2003,” says Anderson.

Another factor was the first-time eligibility of cattle and catfish producers for government payments for some weather-related losses. Typically, these producers do not receive any commodity program payments. DBJ