Agriculture - January 2010

According to the U.S. Department of Agriculture (USDA), in December and early January District growers received heavy rainfalls and cooler-than-normal temperatures. These conditions had an adverse impact on crops and production. Excessive rains reportedly damaged crops in most areas of the District, and wet soils were unable to support heavy machinery for harvesting and fieldwork. Areas of central Florida endured between 10 and 44 hours of below-freezing temperatures with some damage reported to vegetable, nursery, and citrus crops.

According to recent USDA estimates, poultry production in 2010 will be flat or up slightly from 2009, restrained by uncertainties in domestic and global markets. During 2009, the value of U.S. broiler exports fell slightly from 2008 levels. Poultry exports to the region's top market, Russia, were down 24 percent from 2008 because of a ban on U.S. poultry shipments based on Russia's new stringent inspection standards. Trade negotiators from both countries are meeting in late January to discuss potential solutions to this trade impasse. Fortunately, higher export sales to Cuba, Taiwan, Central America, and other countries have helped offset reduced sales to Russia.

According to the USDA, despite recent crop damage, the region's cotton crop for 2010 is estimated to be a bit higher than last year's thanks to higher yields per acre. Excessive rainfall across the region has reportedly damaged cotton crops in some areas of Mississippi and Tennessee. However, according to a University of Georgia economist, cotton acreage is likely to increase in 2010 because of improved market prices and business conditions at home and abroad.

Prices paid to farmers rose steadily during most of 2009, staying above 50 cents per pound during the second half of the year. USDA economists reported that demand for U.S cotton should increase because of expected higher mill usage in major textile-producing countries.

According to University of Florida economists, market conditions for the citrus industry were mixed at year end. In 2009, producers were challenged by diseases and more recently by below-freezing temperatures that are likely to reduce new estimates of citrus that are currently being evaluated. Pricewise, however, citrus growers have recently received above-average returns, according to contacts and data. Despite high volatility in prices reported in December, on a 12-month-average basis, growers' prices last year were more than 30 percent higher than comparable prices for 2008.