Robyn Stewart
Did you know that agriculture is the state of Georgia’s #1 industry and is responsible for contributing over $73 billion dollars to the state economy each year? One in seven people in Georgia work in an agriculture, forestry, or related field. Due to agricultures significant impact on our economy, it is important for producers to receive up-to-date information and outlooks on different commodities. Every January, the UGA College of Agriculture and Environmental Science holds an Ag Forecast Update at four locations across the state. The 2020 Ag Forecast held in Gainesville on January 23 featured speakers Sam Pardue, Todd Applegate, and Todd E. Southerland. Topics included overall US economic outlook, outlooks for each agricultural commodity, and a deeper look at the poultry industry, Georgia’s #1 commodity.
The overall outlook for the United State and Georgia economies was presented as fairly optimistic. In the presence of strong domestic and global agriculture production, it is expected that we will continue to see slow economic growth until the time of elections. However, it should be noted that ongoing trade wars create risk and slow our economic growth. The biggest strength in 2020 for our economy will be the consumer, with the most important economic driver being housing development. Other development such as industries in the metro Atlanta area will also help drive Georgia’s economy. Some of the challenges we face are: growing an already strong economy, ongoing trade agreement issues, and agriculture impacts from Hurricane Michael. For agriculture inputs in 2020, it is expected that cash rent, fuel, seed, labor, and machinery expenses will increase and that fertilizer and interest rates will stay stable or decline.
In addition to the economic update, attendees were given an overview of the following commodities: peanuts, cotton, fruits & nuts, vegetables & pulses, corn, wheat & soybeans, beef, pork, poultry/eggs, dairy, honey bees, timber, and the green industry. For today, I am going to focus on beef and timber, as those are the primary industries in Lincoln County.
The beef production cycle is typically a 10-year span, and we are currently estimated to be in year 6. This means that the cattle industry is starting to move out of expansion, resulting in a declining rate of growth. Over the last 3 years, the beef cattle industry has seen 4% annual growth compared to the all-time average of 0.05% annual growth, and this is expected to decline in 2020. Producers can expect little to no improvement on cattle prices from 2019 and a potential shortage of feed and forage products, causing an increase in production cost. On the consumer end, decreased production in the mid 2010’s led to high beef prices, some of which have remained high. This has resulted in the leveling-off of beef consumption in the US. However, the Asiatic Swine Flu outbreak in China may lead to increased substitution of beef products for pork products. As a result, we expect to see increased exports to China and Australia as well as continued domestic demand to support U.S. beef production.
The second industry of importance in Lincoln County is timber and forestry. Lumber prices have significantly declined from 2018 but are expected to hold steady at $350 per thousand board feet in 2020. There has also been a decline in pulp prices, reducing in several pulp mill closures in the South. Average sawtimber and pulpwood prices are expected to remain flat throughout 2020.
If you are interested in reviewing the Ag Forecast for a specific commodity not included here, please reach out to the Lincoln County Extension Office at uge3181@uga.edu or 706-359-3233. Additionally, Ag Forecast information sheets are currently available and Ag Snapshot booklets should arrive shortly for pick up.
