ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, January 7, 1996 TAG: 9601110128
SECTION: BUSINESS PAGE: D8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Clarence Tardy, a Rockbridge County cattle farmer, has watched the price of the cattle he sells drop by 29 percent - from 93 cents a pound in 1993 to 76 cents in 1994 and 66 cents a pound last year.
"I wouldn't be surprised if they're not 10 cents a pound less [this] year," Tardy said.
Beef cattle, the primary farm commodity in much of Western Virginia, is one of the few gloomy spots in what otherwise is expected to be a bright outlook for the agricultural sector of the economy.
The two biggest question marks in agriculture are beef and dairy, said Joe Coffey, an economist with Southern States Cooperative of Richmond. It could be a year or more before beef prices rebound, he said. Milk prices, Coffey said, have been mediocre. They haven't dropped, but feed prices are up, meaning less profit for farmers.
Some livestock is doing well, though. The outlook for hogs and poultry seems favorable, Coffey said.
"I'm bullish on crops," Coffey said. Corn, soybean and wheat prices are all "very favorable," he said. Tobacco, the state's largest cash crop should have another good year, he said.
Last year's tobacco crop was good in quality but short in supply, mainly because of heavy rains in June, said Franklin County tobacco farmer Johnny Angell. Because of that, farmers received good prices for their tobacco, he said.
Angell, who grows 60 acres of flue-cured tobacco and raises 200 head of cattle to supplement his tobacco income, said the short-term outlook for his tobacco crop looks good. Because of uncertainty related to government regulation and taxation of the controversial crop, the long-term outlook is cloudy, he said.
The future of government regulation, in general, is unclear, Coffey said. The chances are much better with the current Congress than they've ever been that it will phase out federal programs that support farm prices.
Coffey said he is surprised by the large number of farmers who favor elimination of subsidies. Farmers complain about the complexity of the programs and worry that controlling how much farmers can grow in this country will encourage farmers in other countries to become their competitors, he said.
Farm exports nationally in 1995 should reach around $58 billion, a record level, when all the accounting is in, Coffey said.
There's no recession in sight; consumer demand for food is good; inflation seems well under control; and interest rates are coming down, Coffey said.
"The outlook for agriculture I think is quite good," he said. And he's bullish on agriculture in the long term because U.S. farmers have the technology and the market systems in place to compete in a world market, Coffey said.
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