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Tar Heel growers optimistic ⎯ to a point

You wouldn’t call it over-confidence, but the mood among farmers and agriculturists at the recent Southern Farm Show in Raleigh, N.C., was definitely more optimistic than a year ago.

“Agriculture is in the best shape of any industry in this state,” said Steve Troxler, North Carolina Commissioner of Agriculture, at a meeting of tobacco farmers at the show. “We are not making the money we would like to make, but we are grateful we are where we are.”

That sentiment translated into an interest in the tools needed to produce a bigger crop more efficiently.

“Farmers are interested in the equipment on the floor,” said Wade Sealey, president of Gaston Sealey Co. of Fairmont, N.C., during the show. “The ones I talked with had a pretty positive outlook for 2009. They are hopefully optimistic.”

There may be a little more optimism in the Southeast than in other parts of the country.

“But farmers here are concerned about the commodity prices and whether they are going to fluctuate as they have in years past. That affects some of the decisions they make.”

Financing affects those decisions too, but credit didn’t seem to be nearly the problem it is in other segments of the economy. Gary Bullen, North Carolina Extension ag economics associate, said there seems to be access to credit for farmers this season.

“Because agriculture is doing so much better than most other areas of our economy, it stands to reason that lenders would look favorably on farmers,” he said. “So where a farmer has acceptable credit, I think there should be financing available, though with tighter restrictions than in the past.”

He added that this might not be the year to borrow a lot of money.

“I don’t anticipate a lot of major capital expenditures getting done on farms in 2009,” he said. “But where a farmer can make a relatively small investment to save labor or improve efficiency, he may well take a look at making that purchase.”

Farmer Mel Ray of Whiteville, N.C., expressed cautious optimism for the upcoming season, in part because the prices of some of the materials farmers need have come down since this time a year ago.

“Certain input costs — particularly nitrogen — are decreasing in price, while fuel and energy costs have improved,” he said.

Blake Brown, North Carolina Extension ag economist, agreed there will be some relief in fuel costs in 2009. “I am hearing some good stories about the prices farmers have locked in for propane. The price is way down from the 2008 peak.”

But the propane market is a very volatile one, Brown added, and things could change very quickly.

Some forms of fertilizer will be less expensive but not all: Sulfate of potash was still high at the time of the show.

“It is incredibly high,” said Paul Denton, Tennessee Extension agronomist. “I have seen quotes of $1,200 a ton, which would be over $1 per pound of potash.”

Don’t use any more than you have to, he says. Soil test, then utilize what you have in the ground. This might be a good year to go to custom blending if you haven’t already. And remember that banding increases fertilizer efficiency.

There may be one beneficial side effect for farmers of the high level of unemployment: Substantial local labor may be available for the first time in years, said Brown.

Ray told Southeast Farm Press he had been monitoring sales of farm equipment at the show and in the weeks before, and he had not seen many sales of new equipment for tobacco, his No. 1 crop.

“Very few farmers seem interested in new barns, which might cost $35,000 apiece,” Ray said.

Nevertheless, he questioned the wisdom of buying used tobacco curing barns.

“I would be very cautious about buying a used one, especially one that is more than 10 years old,” he said. “You might have to spend too much to fix it up.”

There was one bright note for tobacco farmers, Ray said: The price prospects are close to last year’s. “Contract prices for tobacco in 2009 are not reduced as much as we feared,” said Ray, who is president for 2009 of the Tobacco Growers Association of North Carolina. “Should we have a very good growing season, then I believe 2009 will yield some positive returns for farmers.”

Price was still a question mark for soybean and grain producers at the time of the Raleigh show. Some were still bitter about the 2008 marketing season, which promised very high prices early on that never materialized.

“We learned the commodity market is a false market with a price on paper that we never had in reality,” said grower Ken Bartlett of La Grange, N.C. “A lot of soybean growers were very disappointed in the price they received for the 2008 crop. But I seriously doubt growers will cut back this season. You don’t see that many getting in and out of the crop. Soybean growers are pretty stable.”


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