A peanut farmer harvesting his crop.
EDITORS NOTE: This is the second of a three-part series on the economic forecast from the University of Georgia’s Terry College of Business.
ALBANY, Ga. — Uncertainty over the Farm Bill, the end of a lingering drought and whether changes to estate taxes could take effect have agriculture officials largely on the fence about how farmers will fare in 2013.
By most accounts, 2012 was a good year to be a farmer, especially those who had access to enough surface water to properly irrigate their fields.
Peanuts soared in 2012 as farmers swapped acres from underpriced items like cotton. Mark Masters of the Georgia Water Planning and Policy Council at Albany State University told attendees to this week's economic forecast luncheon hosted by the University of Georgia's Terry College of Business that peanut acreage grew by 60 percent in 2012 to more than 725,000 acres and nearly doubled production figures, bringing in more than 1.6 million tons.
Other crops like corn saw their acreage tick up only slightly but saw dramatically improved production, signaling stronger yields on fewer acres.
Even cotton, whose prices led many farmers to plant more corn or peanuts, saw increased production over 2011.
Looking ahead to 2013, Masters said he believes there will be a sharp drop in peanut acreage thanks to less-lucrative peanut contracts. Cotton should remain in the same ballpark, and a lingering drought in the midwest could prop up corn prices, making it more attractive to Southwest Georgia farmers who have access to enough water to irrigate.
But the problems that have proven to be perennial for farmers of late will once again be troublesome in 2013.
Politics has again put the Farm Bill on the backburner as discussions in Washington focus on the so-called "fiscal cliff" negotiations, leaving farmers unsure of what the 2013 bill might offer, Masters said.
Farmers also are concerned about the impact any possible changes to the estate tax may have on their ability to do estate planning.
For now, the exemption threshold sits at $5 million worth of assets and land. If that were to change to $1 million, as some have proposed, more than 6,000 new farmers in the area would be impacted.
But perhaps the biggest uncertainty stems from Southwest Georgia's continuing drought.
According to Masters, Georgia was forecast for an El-Niño winter, meaning a cold and wet December, January and February.
"It is now Dec. 4, and it is not cold. It is not wet," Masters said. "If we don't get some measurable rain soon, it's going to be a major problem for anyone trying to grow anything."
Masters pointed to record lows on the Flint River and its tributaries and said there will be some major issues on the horizon if there isn't a sizable rain event in the near future.