Kentucky
Economist: Kentucky farm sector could set record receipts
FRANKFORT, Ky. (AP) — Kentucky agriculture seems to be on a file tempo to surpass $7 billion in money receipts in 2022, bolstered by sturdy commodity costs that might reward farmers hit exhausting by quickly rising manufacturing prices, an agricultural economist informed state lawmakers Thursday.
Regardless of all of the challenges of this 12 months, College of Kentucky ag economist Will Snell mentioned his greatest concern is for 2023, when commodity costs may drop with out corresponding declines in farmers’ enter prices. Snell appeared earlier than a legislative panel to debate the impact of surging inflation on Kentucky’s farming sector.
Elevated farm manufacturing prices have outpaced rising costs elsewhere within the financial system, Snell mentioned. Fertilizer prices, for instance, have greater than doubled, he mentioned. Snell recounted his latest dialog with a farmer who owed $100,000 to a farm retailer. Farmers have absorbed these sharply greater bills in hopes their investments can be rewarded later within the 12 months.
It is a massive danger, however one that might repay. Market costs for Kentucky’s agricultural commodities — from corn and soybeans to chickens and hogs — have surged since 2020.
Because of this, Snell predicted an excellent 12 months for Kentucky agriculture in 2022, assuming key variables pan out — that farmers have favorable rising situations and export markets stay sturdy.
“I really feel fairly assured to say so long as we now have respectable rising situations, and with the costs we’re anticipating this fall, that we’re going to nicely exceed $7 billion in money receipts for agriculture for 2022,” Snell mentioned.
The Bluegrass State’s file for ag money receipts was $6.5 billion in 2014. Economists suspect final 12 months’s quantity exceeded that degree, however the knowledge will not be out there till later this summer season, Snell mentioned.
Tobacco was once the king of Kentucky agriculture, however its decline has resulted in a extremely diversified farm sector. The state’s high agricultural commodities embrace corn, soybeans, poultry, horses and cattle.
Crop costs this fall have the potential to end in greater internet farm revenue for grain farmers, assuming they’ve good yields, Snell mentioned. Robust export markets for corn and soybean are anticipated to maintain crop costs greater this autumn, he mentioned. For livestock producers, greater feed prices will pose a problem however greater market costs will assist offset greater bills, he mentioned.
As for Kentucky’s internet farm revenue — the quantity left after farmers’ bills — Snell mentioned he doesn’t count on a file quantity this 12 months. However it may find yourself “comparatively excessive” in comparison with the previous decade, assuming yields are good, he mentioned.
However he warned concerning the prospects for a bumpier 12 months for Kentucky farmers in 2023.
“The world will reply to those greater commodity costs and we’ll see most likely some pushback and decrease commodity costs — particularly crop costs — that we anticipate for 2023,” he informed lawmakers. “These enter costs are usually pretty sticky. We usually haven’t seen them come down as quick as commodity costs. And because of this, that’s our greatest concern.”