test-blog

Economists give '22 crop outlook

Posted on February 25, 2022 12:00 AM

By Jennifer Whittaker

Farmers attending a series of commodity meetings Georgia ag organizations held this winter had a chance to hear UGA Extension economists predict 2022 prices for their commodities while agronomists and pathologists gave production tips for navigating high fertilizer costs and expected weather patterns.

We’re sharing the insights and tips offered for Georgia’s major crops at the Georgia Peanut Commission’s Farm Show, the UGA Cotton Production Workshop/Georgia Cotton Commission Annual Meeting, and the Georgia Ag Forecast, hosted by the UGA College of Agricultural & Environmental Sciences.

Speakers at all the meetings encouraged Georgia farmers to use the UGA row crop comparison tools to run the numbers for their farms to compare the costs and returns for major crops and some livestock.

Visit www.gfb.ag/UGAagbudgets for these tools.

AG INPUT COSTS RISE

In the past year, biggest price increases:

• Fertilizer +85-125%

• Shipping spot loads +41%

• Diesel +35%

• Pallets +32%

Source: Georgia Economist Dr. Jeff Dorman

Peanuts

Georgia’s 2021 peanut crop produced 1.67 million tons with an average yield of 4,465 lbs/acre, UGA Extension Peanut Agronomist Dr.

Scott Montford said at the Georgia Peanut Show, reporting stats from a Jan. 17 report.

“The 2021 crop was one of the largest yields for Georgia in the past 10 to 15 years,” Montford said. “Last year’s crop set us up where we’re going to have some [supply stock] overages, which might drive down

contract prices for this year’s crop.”

Montfort attributed the high average yield/acre to non-irrigated acres faring well due to more rain and cooler temperatures. While Georgia’s eastern and central peanut belt benefited from last year’s weather, Montford acknowledged that many peanut growers in Southwest Georgia had lower yields due to excess rain and cooler temperatures.

Speaking at the Ag Forecast, UGA Extension Economist Amanda Smith said Georgia growers may increase their peanut acreage 5-10% in ’22 due to rising fertilizer costs and stable prices, but warned, “We don’t need to see an acreage increase as much as 10%, due to the effect this could have on prices in ’23.”

Cotton

Georgia’s ‘21 cotton crop produced 2.25 million bales up 3% from ‘20 with an average yield of 931 lbs./acre according to the USDA

2021 crop summary. This report, released Jan. 12, was based on a farmer survey conducted in early December, so stats may change.

“Last year Georgia had good weather. Last year we harvested large amounts of cotton compared to 2020,”

UGA Cotton Economist Serinna Liu said at Georgia’s annual cotton meeting. 2021 crop summary. This report, released Jan. 12, was based on a farmer survey conducted in early December, so stats may change.

“Last year Georgia had good weather. Last year we harvested large amounts of cotton compared to 2020,” UGA Cotton Economist Serinna Liu said at Georgia’s annual cotton meeting.

Liu discussed how supply chain disruptions at shipping ports and a lack of employees to drive trucks or class the ’21 cotton crop is impacting cotton imports and exports.

“Due to a shortage of employees, 12.9% less cotton has been classed for the ‘21 crop compared to the five-year average,” Liu said. “This big gap hinders our ability to sell our cotton and will delay our exports.”

Cotton prices soared as high as $1.20/lb. in 2021. Liu explained these prices were driven by hedge fund managers investing in cotton when the stock market dropped. For ‘22, she expects cotton prices to range from 80 to 90 cents/lb. as production costs rise by 17.4% for irrigated cotton and 24.7% for dryland cotton.

“The price for irrigated land needs to be locked in at 89 cents/lb to cover costs,” Liu said. “Growers need to lock in a price of $1.09/lb for dryland to break even.”

Corn & Soybeans

Georgia’s ’21 corn crop produced 81 million bushels, an increase of 15% from the ’20 crop due to a record yield of 182 bushels/acre

according to the USDA ’21 crop summary. Georgia farmers planted 60,000 more acres of corn in ’21 (480,000) than’20 and harvested 55,000 more acres in ’21 (445,000) than ’20.

U.S. corn production was higher than consumption in 2021, so ending stocks are up.

Food use is expected to be steady in ‘22, but livestock feed use is down as higher prices. Ethanol consumption is expected to remain stable.

\“We are starting to see large ending stocks of corn for ethanol, so the question is do we need as much corn for ethanol?” UGA Economist Amanda Smith said. “It’s still profitable to plant corn, especially over soybeans.”

She estimates Georgia corn prices for the coming year will range from $5.85 to $6.50 a bushel.

“The big question is ‘What will be the number of corn acres planted nationwide?’ Smith said. “This will determine how high fertilizer prices go.”

In ’22, Georgia corn and soybean acres are expected to stay the same or increase slightly.

Georgia’s ’21 soybean crop of 6.21 million bushels was up 59% over ’20 due to a 42% increase in harvested acres (135,000) and a state record yield of 46 bushels/acre only 5.4 bushels/acre lower than the U.S. yield.

U.S. soybean production exceeded consumption for the 2021-22 crop, increasing ending stocks by about 8%. Global ending stocks will be down from last year, but the amount depends on how the South American crop fares.

Smith estimates Georgia ’22 soybean prices will average$10-12/bushel.

Managing fertility needs vs. price

While farmers are looking at higher fertilizer prices than they’ve seen in more than a decade, UGA Extension Agronomist Glen Harris put the situation in perspective.

“There are no silver bullets in this game of dealing with higher fertilizer prices, but farmers dealt with high fertilizer prices in 2008 and prices for some fertilizer components aren’t as high as they were then,” Harris said.

In 2008 the average price of nitrogen was 85 cents/pound while it was 95 cents/pound by end of 2021, Harris said. The average price of phosphate in 2008 was 85 cents/pound while it reached 65 cents/pound last year. Soluble potassium had an average price of 80 cents/pound in 2008 while it was just under 70 cents/pound last year.

“Be sure to take soil samples of your fields to determine what your soil needs,” Harris advises.

Harris recommends that farmers follow the four Rs approach to properly fertilize their fields: use the right source; apply at the right rate; apply nutrients at the right stage of growth and apply in the right place (to areas in field where needed).

“Even now with fertilizer prices being higher, for corn and cotton crops, you need to fertilize your fields based on the yields you want. It will still pay because commodity prices are good,” Harris said. “If commodity prices go down, that will be a different story.”

Fertilizer prices are expected to ease by late summer Smith said.

Managing nematodes

Come summer, South Georgia farmers may pay the piper for the mild weather they enjoyed this winter.

“We want [consistent] colder temperatures to send soil temperatures plummeting [for a prolonged period of time] said UGA Extension Plant Pathologist Dr. Bob Kemerait. “The winter we haven’t had this year is setting us up for an increase in thrips, nematodes and tomato spotted wilt virus.”

Kemerait said farmers will probably pay more for fungicides to combat disease and nematodes; they may experience shortages of generic products azoxystrobin, pyraclostrobin and tebucaonazole. Premium fungicides should be available unless peanut acreage goes way above 2021.