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Many Alabama growers 'hanging on'

Much like the struggling patient who makes some progress but not enough for complete recovery, farmers are making modest improvements in their bottom line but not enough to turn the corner to full prosperity.

"The bottom line is that yields are looking good and prices are okay," says Max Runge, an Alabama Cooperative Extension System economist. "It hasn't been a banner year of production or prices, even though it's been good enough to pay down some debt and survive for another year.”

And it's precisely this mediocrity associated with the 2009 crop year picture that concerns Runge.

"I hate to say it, but it's gotten to the point where we're surviving from year to year," says Runge.

"We can't keep doing this because sooner or later we're going to run into big problems again."

And when farmers do, Runge fears they are not going to be adequately prepared for the consequences.

Cotton prices have climbed slightly, from about $47 per hundredweight in the spring to about $60 dollars today.

Largely because of increased yields, corn, which has been the big winner in recent years, has undergone a significant drop, from almost $4 a bushel in the spring to around $3 today.

Meanwhile, peanuts have enjoyed a modest uptick, from about $350 to around $400.

Runge describes soybean prices as the year's biggest surprise. Earlier this year, prices stood at around $8.30 a bushel, though they've risen to about $9.25.

"'It's really surprising that soybeans have held as well as they have," he says, citing droughts in China and India as major factors.

Amid a spike in worldwide supplies, Runge projects a poor outlook for wheat.

What U.S. — and Alabama — farming badly needs is a healthy spike in prices. But that doesn't appear to be in the cards anytime soon, Runge says.

"Things are not great but they could be worse."

Runge is especially concerned by the long-term trends associated with farming in Alabama and throughout the United States.

"The average age of our farmers is somewhere in the mid-fifties," he says. "A number of these have reached the point where they're saying, 'I don't want to do this anymore.'"

Middle-aged farmers who have amassed enough equity often opt for one of three choices: Turning their operations over to a younger family member, leasing their land to another user or leaving farming entirely.

"We're losing that production base and we can only lose so much," Runge says. "We've cut to the bone and we can't go much further."

Nevertheless, Runge says farming, which he describes one of the most adaptive sectors of the U.S. economy, should by no means be counted out.

"This is really nothing new for agriculture," he says. "Farmers have been in these situations time and again but they've always found a way out."

Some sunshine already is peaking through the clouds, he says, pointing to signs that poor economic conditions may have bottomed out.

Decreasing energy costs have presented farmers with an improved outlook: Farmers are paying less for several critical farm inputs, including fertilizer, nitrogen and equipment operation — a welcome change from the past couple of years.

TAGS: Management
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