| OU 292 | February 12, 1996 |
Pegging farm income for 1995 is a hazardous task, much less looking ahead to 1996. After all, final 1994 cash receipts were only recently released. Still, a preliminary look at 1995 reveals a very, very good year for the states crop sector economy despite some weather related yield problems. And an early look ahead promises even brighter prospects for 1996. In contrast, high feed prices and low livestock prices have led to a great deal of red ink in that sector. That situation too is likely to persist through 1996.
| 1992 | 1993 | 1994 | 1995* | 1996* | |
|---|---|---|---|---|---|
| $1,000 | |||||
| Crops | |||||
| Tobacco | 190 | 186 | 172 | 194 | 185 |
| Soybeans | 81 | 67 | 67 | 75 | 70 |
| Peanuts | 9 | 7 | 10 | 10 | 10 |
| Corn | 45 | 27 | 37 | 60 | 70 |
| Wheat | 40 | 30 | 51 | 40 | 48 |
| Cotton | 75 | 63 | 104 | 165 | 205 |
| Vegetables | 53 | 86 | 89 | 95 | 105 |
| Fruits & nuts | 36 | 40 | 50 | 60 | 50 |
| Greenhouse, nursery | 120 | 128 | 145 | 160 | 180 |
| Other | 20 | 22 | 30 | 35 | 40 |
| Total crops | 672 | 657 | 755 | 894 | 963 |
| Livestock | |||||
| Milk | 61 | 60 | 61 | 60 | 62 |
| Cattle | 113 | 133 | 124 | 115 | 110 |
| Hogs | 64 | 72 | 61 | 70 | 70 |
| Eggs | 69 | 69 | 70 | 70 | 70 |
| Broilers | 136 | 170 | 206 | 220 | 230 |
| Turkeys | 71 | 74 | 69 | 75 | 80 |
| Other livestock | 23 | 22 | 24 | 25 | 25 |
| Total livestock | 537 | 600 | 615 | 635 | 647 |
| Total commodities | 1208 | 1257 | 1370 | 1529 | 1610 |
| Government payments | 73 | 102 | 60 | 30 | 20 |
| State total | 1281 | 1359 | 1430 | 1559 | 1630 |
Cash receipts from crop sales could jump more than 15 percent above 1994 levels this year, followed by a further surge this year. Increased acreage of major crops is virtually a sure thing. Wheat acreage would have been up, but weather prevented considerable acreage from being planted. Attractive prices based on historic levels are available in the marketplace today for harvest delivery -- $4.00 wheat, $3.00 corn, 76 cent cotton, $6.75 soybeans. Although some input prices (seed, fertilizer) have risen sharply, a "normal" growing season should result in a nice bottom line for most crop producers.
Optimism over income prospects appears to have been reflected in the farm real estate market. 1995 farmland values in South Carolina were reported to be $1,337/acre -- up 11 percent from 1994. This was one of the largest increases in the southeast.
The only bright spot in the livestock sector has been the export market. Exports of red meat and poultry continue to expand rapidly. Perhaps foreigners can help us eat our way out of the current meat glut, and 1997 will see a return to more normal costs and returns.
The question I'm asked most often is how long this boom in fiber and grain prices will last. The old economics adage is "the cure for high (low) prices is high (low) prices." Rest assured that such will be the case again in both the crop and livestock sectors. Crop farmers should enjoy the ride and be aggressive marketers, even thinking ahead to the '97 crop. And cowboys should just be trying to hang on until '97.
1996 by Department of Agricultural and Applied Economics, Clemson
University.
