Ag economy grows to record high of $11.4 billion in 2012

Linda Foster Benedict Special to The Citizen

The agricultural economy in Louisiana grew to a record high value of $11.4 billion in 2012, an increase of 6.5 percent over the 2011 amount of $10.7 billion, according to the latest figures released by the LSU AgCenter.

The main reason for the unprecedented growth were high prices for corn and soybeans combined with record yields, according to John Westra, AgCenter economist. He compiles Louisiana agriculture statistics for the Ag Summary, which is published annually in print form and at www.LSUAgCenter.com.

"The only row crop to exceed corn and soybeans in value for Louisiana was sugarcane," Westra said, adding that sugarcane's value was $993 million in 2012, actually down 8 percent from 2011 because of lower sugar prices.

Soybeans covered the most acreage of any crop in Louisiana during 2012 – 1.1 million acres. The total value was $805 million, which was 53 percent higher than in 2011.

"That's an astounding increase," Westra said, adding that farmers had a record average yield of 45 bushels per acre and a record price per bushel of $14.

The dollars in the Ag Summary reflect the gross farm value of each commodity plus the value added by the first level of activity, which includes cleaning, grading, transporting and some processing.

"We include only the processing that occurs in Louisiana, and we don't include any restaurant activity," Westra said.

The value for feed grains, which is mostly corn, increased 31 percent over 2011 to $794 million in 2012. The statewide average yield for corn was 169 bushels per acre, another record high.

"There's no doubt that we benefitted from drought conditions in other parts of the country," Westra said.

Also included in feed grains are grain sorghum, which also had record yields in 2011, and oats, which had a significant decline in acreage from 2011.

Sugarcane had near-record yields for the cane, with the sugar recovery being the highest on record (8,412 pounds of sugar per acre). This helped minimize the effects of lower prices, Westra said.

Steady prices for cotton combined with record low acres harvested in Louisiana caused the value of this commodity to be down 9 percent over 2011. The value in 2012 was $278 million.

"The cotton yield was up over 2011, but the number of acres planted to cotton continues to shrink," Westra said, adding that cotton farmers are switching to soybeans and corn, where they can make more money.

Land harvested for cotton was about 225,000 acres, down 22 percent from 2011, and the lowest level recorded since 1866, when the state began tracking cotton production.

"We expect to be down another 50,000 acres in 2013," Westra said about cotton.

The crop with the steepest decline in value for the year was sweet potatoes, which dropped 44 percent – from $142 million in 2011 to $80 million in 2012 – despite good yields.

"The number of acres was down substantially," Westra said, adding that the acreage harvested went from 13,360 in 2011 to 9,730 in 2012.

Westra said the decline is due to at least a half dozen retirements among sweet potato farmers and the reluctance of banks to make loans for sweet potato production.

"Sweet potatoes can be very profitable, but they are a high risk commodity," Westra said.

Sweet potato production is labor-intensive, which is costly, and heavy rains at harvest can easily ruin a crop.

Banks appear to have become less willing to loan money for rice production, also, which is due in part to high production costs. This is one of the reasons fewer acres were planted in rice in 2012 – 391,000 – than in 2011 – 417,000.

Despite fewer acres, rice prices were good and yields were record-setting, so the contribution from rice was $483 million, which was slightly higher than in 2011.

The biggest contributor to the agriculture economy continues to be forestry, although it was down 5 percent from 2011. It went from $3 billion to $2.8 billion in 2012.

Saw timber prices were up slightly, which was due primarily to the uptick in the housing industry. But pulpwood, which is made into paper products, and chip and saw production, which goes into wood products like plywood, were both down, Westra said.

Animal enterprises were up 15 percent from 2011 – from $2.6 billion to $3 billion in 2012. The bulk of that increase was in poultry production, which went up 21 percent in 2012 to $1.9 billion. That includes both eggs and broilers, the source of meat, Westra said.

The beef cattle industry went up 25 percent – from $448 million in 2011 to $561 million in 2012. The Louisiana cattle industry involves cow-calf operations, in which calves are weaned and then sold to feedlots in other states for finishing.

"We had about the same number of cattle both years, but the prices were higher in 2012," Westra said.

The Louisiana dairy industry continues to shrink with a contribution to the state's economy at $118 million in 2012, down 12 percent from 2011. The number of dairy farms dropped to 135 in 2012, compared with 140 in 2011.

"The high prices for feed and fertilizer are the main contributors to the decline," Westra said.

The aquaculture industry – which includes crawfish, catfish, alligators, oysters and turtles – also declined from $442 million in 2011 to $431 million in 2012, primarily due to a 22 percent drop in farm-raised crawfish production.

"This drop in production stemmed from extremely dry preseason conditions and cold winter temperatures," Westra said.

The fisheries industry, on the other hand, had a 40 percent increase. This industry includes both freshwater and marine fisheries. Unlike the other commodities, these numbers reflect the change from the year before – from 2010 to 2011.

"It's always a year behind because of the way the numbers are collected," Westra said.

Because 2010 was the year of the Deepwater Horizon oil spill, the increased numbers reflect the recovery the following year.

Westra said 2013 should be another good year for Louisiana farmers – especially those who grow soybeans and corn. Those prices are expected to remain high, although not as high as in 2012.