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Mark Masters expects region’s overall farm income to be lower in 2014

Masters added that farm gate value for Albany’s MSA increased 47 percent from 2008 to 2013

Director Jeff Humphreys, left, Selig Center for Economic Growth Terry College of Business, talks with Mark Masters, Director of Flint River Water Planning and Policy Center. Masters warned that he expects the region’s overall farm income to be lower in 2014. (File Photo)

Director Jeff Humphreys, left, Selig Center for Economic Growth Terry College of Business, talks with Mark Masters, Director of Flint River Water Planning and Policy Center. Masters warned that he expects the region’s overall farm income to be lower in 2014. (File Photo)

ALBANY — Mark Masters of Albany, Director of Projects at the Georgia Water Planning and Policy Center, warns farmers and the banks who served them that overall farm income is expected to be down in 2014.

“For 2014, prices are trending lower than last year for most commodities. Livestock is the exception. We are near record highs in that sector.” Masters said. “Overall farm income is expected to be lower due to lower prices across the board for our primary crops. Planted acreage may be lower than in past few years since it is so wet … some areas that have been planted recently are under water; and any payments associated with the new farm bill likely won’t be made until 2015.”

But Masters, speaking at Thursday’s annual Economic Outlook series presented by the University of Georgia, was not completely void of good news.

“Farm Gate Value for the Albany MSA (metropolitan statistical area) increased 47 percent from 2008 through 2012; mostly due to increased prices levels across the board for the crops we grow in Southwest Georgia (peanuts, corn cotton, pecans) and the ability to water those crops during the drought,” Masters said. “In 2013 we saw a reduction in prices off the highs of 2011-2012, particularly in peanuts, and farm income slightly lower than in 2012. Farmers continued to make equipment purchases and land improvements in 2013 and irrigated land rents and sales continue to be strong.

“However, we likely won’t see the same level of activity from farmers making new purchases or improvements given the retreating prices and uncertainty over the new farm bill.”

Masters said a air of uncertainty surrounds the new farm bill.

“Even by federal standards this new bill is convoluted,” he said. “There is a lot of uncertainty, but all in all we’re doing OK.”

Masters said the new bill features elimination of direct payments to farmers and adds two new safety net programs including:

— Price Loss Coverage (PLC) – similar to old system of target prices and counter-cyclical payments

— Agriculture Risk Coverage (ARC) – revenue based

He said farmers have to decide which program to participate in this year and cannot change that selection for five years (or the life of the bill). This requirement could place a burden on farmers since the programs are so new and the regulations have not been written or released by U.S. Department of Agriculture.

Masters added that cotton is not eligible for PLC or ARC and will have a separate program called Stacked Income Protection Plan which will not be available until at least 2015, so there will be some transition for farmers. He said streamlined payment limitations are capped at $125,000 per person (there is an additional $125,000 specific to peanuts as well).

“I hope by this time next year we will be able to offer you a lot more clarity on this farm bill,” Masters said.

Water issues might also come to the forefront in 2014 Masters said, cautioning the decades long “water wars” currently being fought by Georgia, Alabama and Florida are not going away anytime soon.

“Southwest Georgia is still under a moratorium for new surface water withdrawals and groundwater withdrawals from the Floridan aquifer and changes to the Flint River Drought Protection Act are pending in the Georgia Legislature,” Masters said. “The Regional Water Planning Councils have resumed meeting and will be reviewing and revising plans in 2015-16.”

He also advises that the region keep an eye on a new Supreme Court suit filed by Florida against Georgia to equitably apportion the waters in the ACF River Basin, which is the drainage basin of the Apalachicola, Chattahoochee and Flint rivers.