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Kentucky farms could exceed $6 billion in cash receipts this year

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Column by Matt Adams, Hardin County Extension Service agent

Coming off a record year of more than $5 billion in cash receipts in 2012, Kentucky farmers likely will exceed that amount in 2013, coming in at around $6 billion. Final numbers will not be released until summer.

This momentum likely will carry into 2014, reinforcing that agriculture still has a profound impact on Kentucky’s economy.

Recently, at the 94th annual Kentucky Farm Bureau convention held in Louisville, the University of Kentucky Agriculture Economics Department released its Kentucky agricultural economic outlook for 2014. The annual report includes individual outlooks for several Kentucky agricultural enterprises including tobacco, grains, equine, cattle, dairy, hogs, poultry, sheep and goats, horticulture and forestry.

The report is compiled by UK specialists, including Will Snell, Cory Walters, Kenny Burdine, Lee Meyer, Tim Woods, Jeff Stringer, Bobby Ammerman, Billy Thomas and Alison Davis.

Coming off the 2012 drought, which led to record crop prices due to extremely poor yields, farmers looked to increase crop acres in 2013. Ideal growing conditions across the state — and much of the nation — led to excellent yields and ultimately lower prices. In Kentucky however, those high yields likely will offset the lower prices in 2013. A state average corn yield of 173 bushels per acre is being realized, along with a 49 bushel per acre soybean yield, and 75 bushel per acre winter wheat yield.

Looking at 2014 though, with average yields, current price levels combined with current input prices will make profitability challenging for grain producers.

Major adjustments in corn prices have partially increased profitability for the cattle sector. Wet, cool weather throughout much of 2013 also provided Kentucky cattle producers with ample forage supplies most of the year, something that they hadn’t seen in several years. Looking toward next year, tight supplies once again will provide overall support for feeder cattle markets in 2014.

The combination of tight supplies and cheaper corn should result in a considerable strengthening of calf prices by spring, which likely will reach levels considerably above those seen in the spring of 2013.

While spring and fall prices likely will exceed 2013 levels, year-over-year increases are likely to be lower in the fall. If weather cooperates, it is possible that we could see interest in expansion in some areas of the country in the coming year. However, once expansion begins, it will take at least two years before heifer calves can be developed, bred and produce their first calves.

Wild cards certainly exist, but the very positive supply picture and lower price of corn suggest 2014 will be a very good year for cattle producers.

Tobacco producers, who are realizing lower yields because of excessive moisture in 2013, are getting some relief in the form of price this fall, with substantial increases over year ago levels. It is important to note however, this has been driven by tight burley supplies in the U.S., and demand is not increasing. This could lead to uncertainty in burley profitability for 2014.

A complete version of The Kentucky Agricultural Outlook for 2014 can be found online at http://www2.ca.uky.edu/cmspubsclass/files/esm/Outlook2014.pdf .

HardinCounty Cooperative Extension Service Holiday Schedule: Just as a reminder, the Hardin County Cooperative Extension Service will be closed Dec. 25 through Jan. 1. We will reopen Jan. 2. Have a merry Christmas and a happy and blessed new year.

Matt Adams is a Hardin County Extension Service agent for agriculture and natural resources.