Louisiana agriculture facing challenges in 2009

BATON ROUGE, La. – One of the challenges facing Louisiana agriculture in 2009 is the loss of income caused by the 2008 hurricanes, Dr. Mike Strain, commissioner of agriculture and forestry, said at the 2009 Ag Outlook Conference held here Thursday (Feb. 26).

“$1 billion in agricultural capital vaporized,” Strain said of the hurricanes’ aftermath.

“The world needs our products,” Strain said, pointing to Louisiana’s six major ports as important to the state’s and the nation’s agricultural exports.

Strain was one of a dozen speakers who addressed the gathering of agricultural producers and industry members at the Lod Cook Conference Center on the LSU Campus.

The outlook for Louisiana agriculture in the coming year, farm policy and the growing biofuels industry led the topics at the conference.

The conference was developed to address “issues critical to us, critical to the state and critical to the agricultural economy,” said Dr. Bill Richardson, chancellor of the LSU AgCenter, one of the sponsors of the event.

Other sponsors included the Louisiana Farm Bureau, the Louisiana Department of Agriculture and Forestry, the U.S. Department of Agriculture Rural Development and USDA Natural Resources Conservation Service.

Several presenters focused on the 2009 farm bill.

“Congress has become much more explicit” in writing the farm bill, said Dr. Robert Young, chief economist with the American Farm Bureau Federation. He said direct payment programs to producers are least disruptive to the marketplace.

Young talked about the Average Crop Revenue Election (ACRE) program that’s part of the new farm bill.

To participate in the ACRE program, which is an alternative to traditional farm subsidy programs, producers are required to give up 20 percent of their potential direct payments and accept a 30 percent lower crop loan rate, he said.

“The short answer for producers in Louisiana is – ‘don’t waste your time,’” Young said. He explained the program is based on unknown future market prices for subsequent years, and farmers who choose the program are required to participate through 2012.

Louisiana farmers are facing low and negative economic growth, depressed financial and energy markets, speculators, market volatility and double-digit percentage increase in input costs, said LSU AgCenter economist Dr. Kurt Guidry.

For 2009, Guidry said he expects to see minimum shifts in acreage among different row crops and s lower demand because of lower biofuel production. In addition, he said some input costs and commodity prices will be lower in the coming year.

The weak U.S. dollar has meant high levels of agricultural exports but also high costs for imported fertilizers, the LSU AgCenter economist said.

“While we’re seeing lower input costs, they’re still high,” Guidry said.

Livestock producers got “hit hard” by fuel, fertilizer and feed costs, said Dr. Curt Lacy, an economist with the University of Georgia, Tifton.

Lacy said a total reduction in the size of the U.S. cattle herd means beef prices will rise when the economy improves and demand increases. Poultry, because of the short growing periods for chickens, would see prices moderate with “some opportunity for profitability” by the end of the year.

“2009 is going to be another difficult year for livestock producers,” Lacy said. But “once the economy turns the corner, livestock business will improve rapidly.”

The public’s concern about the diversion of food to fuel in the growing move to developing fuels from plants has to be balanced with the global challenge to produce both food and fuel, said Dr. Randell Fortenbery.

The Renk Professor of Agribusiness at the University of Wisconsin-Madison said the production of biofuels is a global issue in a global market.

“Food and fuel have to grow together” as part of an integrated system, Fortenbery said, adding that the mass production of food is energy-intensive, including the need to move foods from agricultural producers to large population centers throughout the world.

“As we move to alternative feedstocks, we must address food security and food scarcity,” he said. “We also need to consider the environmental and social implications.”

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