Industry is cautiously optimistic in 2005
High yields tempered by low prices

BY DOREEN MUZZI
DBJ Contributing Writer

Bumper crop yields in 2004 helped mitigate low commodity prices. While depressed prices did keep many growers from realizing their full profit potential, yields were high enough to keep most afloat financially.

It was a year when some cotton growers made enough lint on their farm to garner a profit, despite the fact that cotton prices had trended below 55 cents per pound by harvest time. As a result, Delta growers and related industry members appear to be cautiously optimistic for more of the same in 2005.

The only factors that seem to be tempering the optimism are increasing production costs due to high fuel and fertilizer prices, and the impending possibility of an Asian Soybean Rust disease outbreak in 2005.

Until November 2004, the United States was the only major soybean producing region of the world free of the disease, which is easily spread from one field to another, and can cause substantial yield loss. The disease poses no health risk to humans or animals. However, preventative treatments for the disease could make it more costly for growers to produce soybeans.

Bill Griffith of Cleveland, Miss., says he won’t cut back on any of his soybean acreage due to the threat of Asian Soybean Rust. Instead, he will continue his crop rotation practice of two years of soybean production followed by one year of rice production.

“Rust is a big concern. I’m planning to follow the recommended preventative course of two fungicide treatments, with one applied at the R1 growth stage and one at R1 plus 20 days. I’ll even make a third fungicide application if it is warranted, and recommended by plant pathologists at Mississippi State University,” says Griffith. “I have used Quadris fungicide for several years on my soybean crop, and have had very good luck with it.”

Boyer Britt of Indianola, Miss., also plans to maintain his crop mix in 2005. The one change he will make is to take a preventative stance on Asian Soybean Rust control. “We’re going to lower our seeding rate, and make two fungicide sprays for rust. From what I understand, we need to be applying fungicides anyway to capture the potential yield advantage.”

Britt says economists’ expectations that commodity prices will be close to loan levels will make 2005 a “tight year,” on his cotton, rice, and soybean farm.

Bolivar County soybean and rice producer Milton Jefcoat adds, “We’re being squeezed by high fertilizer costs, high diesel fuel costs, high production costs, and a dismal price outlook for 2005.”

“It looks like I’ll be working for free again this year,” says Chip Otts of Shaw, Miss. He says he’s not overly optimistic for 2005, considering what it will cost him to supply the necessary diesel fuel and fertilizer for his rice, soybean and wheat farm.

Otts says, “Our input costs are going to be high this year, especially considering the amount of fertilizer we’ve got to put on our rice. To cover these costs, we’ve got to get commodity prices to higher levels,” he says.

“We hope our profits from 2004 will help carry us into the 2005 crop year. Things are looking good so far,” says Bert Mann with Dulaney Seed, Inc., in Clarksdale, Miss. The Delta company sells soybean, rice and wheat seed, seed handling equipment, and irrigation equipment.

Mann says, “We’ve had a real scare with Asian Soybean Rust, but the experts are telling us that we can control it with fungicides.”

Griffith adds, “Hopefully rice prices will come back, because we sure need them to be higher.”

Until then, high crop yields in 2004 are allowing many growers to replace aging equipment and invest in new technology to improve efficiency.

Joe Tannehill of Tannehill Industries, Inc., in Indianola, Miss., believes 2005 will be a good year for agriculture. He’s expecting sales of pressure washers and cleaning chemicals to be up at least 17 percent in 2005.

“Farmers had an exceptional year last year with good yields and good prices for cotton, corn, rice and soybeans. I’ve got farmers spending money that haven’t spent money with me in six to 10 years,” he says.

Local John Deere dealers are also hopeful 2005 will be a profitable year for all of agriculture. Wade, Inc. is a John Deere dealer with seven locations throughout the Delta, including facilities in Batesville, Cleveland, Clarksdale, Indianola, Greenville, Greenwood and Webb.

Wade, Inc., sales associate Tara Gunn says, “Delta farmers have proven they can produce record-breaking crop yields. If the weather will cooperate throughout the growing season and farmers are able to profit from any potential price rallies, then 2005 will be another successful year for Delta agriculture.”

Jimmy Barrett, a partner in the Clarksdale, Miss.-based crop insurance firm, Dunn, Marley and Harris Agency, Inc., says the potential for an Asian Soybean Rust outbreak is spurring more soybean growers to look into buy-up crop insurance policies.

The final deadline for farmers to make changes in crop insurance policies is February 28, and many growers are seriously considering increasing their insurance coverage to minimize their production risks in 2005.

“There’s a lot of uncertainty this year because it’s the first time U.S. growers are facing the possibility of an Asian Soybean Rust infestation in soybean fields here,” Barrett says. “At least with a buy-up insurance policy, growers would have something to fall back on, because growers can protect up to 95 percent of their past yield history with this type of insurance policy.”

Marvin Lott with Jimmy Sanders, Inc., of Cleveland, Miss., says the potential for an Asian Soybean Rust outbreak is weighing heavily on the minds of many soybean growers. But, he says, “The educational process is in place, farmers are dedicated to learning more about the disease spectrum, and a preventative program is in place to deal with the disease.”

An informal survey of his Delta customers leads Lott to project that Mississippi corn acreage will be down, cotton acreage will be up, and soybean acreage will be flat. “I think rice production will be up three to five percent at the most in Bolivar County,” he says. “We’ve got two good years behind us, and I’m hopeful for another good production year.”

Bruce Holder with Demco Distributing Co., in Shelby, Miss., says he expects to see more rice than soybean acreage in the Delta this year.

We will probably sell more spray supplies, than tillage equipment this year,” Holder says. “Farmers have gotten to the point where they are cautious about how much they spend ever year now.” DBJ