Search Site   
News Stories at a Glance
Deere 4440 cab tractor racked up $18,000 at farm retirement auction
Indiana legislature passes bills for ag land purchases, broadband grants
Make spring planting safety plans early to avoid injuries
Michigan soybean grower visits Dubai to showcase U.S. products
Scientists are interested in eclipse effects on crops and livestock
U.S. retail meat demand for pork and beef both decreased in 2023
Iowa one of the few states to see farms increase in 2022 Ag Census
Trade, E15, GREET, tax credits the talk at Commodity Classic
Ohioan travels to Malta as part of US Grains Council trade mission
FFA members learn about Australian culture, agriculture during trip
Timing of Dicamba ruling may cause issues for 2024 planting
   
Archive
Search Archive  
   
$4.7 billion estimated for ’08 Kentucky farm cash receipts

By TIM THORNBERRY
Kentucky Correspondent

LOUISVILLE, Ky. — University of Kentucky agriculture economists had good news to deliver to the annual Kentucky Farm Bureau Federation Conference last week even in the wake of a disastrous year for the economy as a whole.

The group predicts farm cash receipts for 2008 to be a record breaking $4.7 billion outdoing last year’s record of $4.43 billion. Percentage wise the increase wasn’t as much as the 10 percent from 2006 to 2007 but the numbers are encouraging even though the state’s top ag related industry took a big hit.

The equine sector is projected to drop more than $100 million dollars to about $900 million. In fact, livestock in general was off leaving the crop sector to make up the difference thanks to high prices seen most of the year.

“What we’ve seen this year is that gross income improvements are being driven from the crop side, rather than from the animal side,” said Economist Lee Meyer. “Historically livestock have contributed about two-thirds to farm cash receipts.”

The economy has contributed to those livestock losses added Meyer but 2009 may see a bit of an increase. The UK’s Kentucky Agricultural Economic Outlook for 2009 predicts livestock receipts to “increase about two percent to $2.7 billion on the strength of the poultry industry and modest improvements in the equine industry.
The outlook also projected that “cattle and dairy are likely to continue to decline.”

Meyer also said, “As the economy has weakened, we’ve seen demand go down. A lot of the beef market is driven by restaurants, the high end cuts especially. So as restaurants get hurt by the economy, which is where people often cut back, beef gets hit that way.”

Despite the lower numbers, livestock still comprised 57 percent of total state receipts, about $2.7 billion.

High crop prices contributed to an increase of about $600 million over last year. The UK group reported the state “has seen dramatically higher income from corn, soybeans and especially wheat. Corn rose 51 percent to $701 million, soybeans are up 41 percent and wheat is about three times the 2007 level.”

Next year may not be as profitable for crops as a six percent decline is expected. Input costs are still a concern even though fuel and fertilizer prices are falling.

Vegetables made a big comeback in 2008 after a devastating freeze left many fields barren the year before. Total acreage increased by 17 percent over 2007. UK Agricultural Economist Tim Woods said Kentucky has more than doubled cash receipts from vegetables over the past 10 years. The demand for locally-grown products helped to spur the increase as well.

Tobacco saw an increase in receipts despite a decline in burley production. Dark tobacco leads the way now as it grew by 40 percent this year. UK’s Will Snell, forecasts “tobacco income in 2008 will have risen 13 percent to $375 million, its highest level since 2004.” Burley prices are also up from last year nearly 20 cents a pound by some accounts, helping with the increase.

Next year dark tobacco production is predicted to remain strong although it probably won’t see the same increase it enjoyed in 2008. Burley is a little less certain according to Snell. World markets are likely to contributed to yet another decline in acreage but total receipts could increase to about $400 million, the highest level since the federal quota buyout in 2004.

While the news is good, record cash receipts don’t necessarily equate into record net profit. Input prices rose dramatically in 2008 and are expected to still be relatively high next year even though fuel and fertilizer are down. Grain prices have fallen as well since the summer.

Still, Kentucky farmers can expect a net increase of 10 percent for 2008 and if the 2009 outlooks holds, “Kentucky’s net farm income for 2009 will probably continue to improve.” The report noted “while cash income is predicted to decline slightly, there is considerable uncertainty about the costs of inputs for crop production. If they do drop, net farm income from crops could improve.”

Comparatively speaking the state ag industry is in relatively good shape especially with the decline in other economic sectors. Meyer described it as solid with a good base and good fundamentals.

12/10/2008