Things you should know about crop production in Alabama Bob Goodman, Extension Economist

Crops in Alabama  Cotton 3.8 M ac  Peanuts ½ M ac  Corn 3.8 M ac  Soybeans 2.1 M ac  Wheat.725 M ac  Sweet Potatoes  Sweet Corn  Tomatoes  Watermelons  Potatoes

Crops in Alabama  Cotton lb/ac to 766 lb/ac  Peanuts lb/ac to 2675 lb/ac  Corn- 55 bu/ac to 107 bu/ac  Soybeans - 16 bu/ac to 35 bu/ac  Wheat - 34 bu/ac to 54 bu/ac Yield Variability

Recent Cropping History  Cotton: stable at 5-600,000 acres.  Soybeans: losing gulf acreage, stable at around ,000 acres in NW.  Corn: susceptible to drought and heat, usually plant about 200,000 acres  Wheat: Planted acres increased for no-till, harvested acres decreasing  Peanuts: Loss of program is moving peanuts into new areas of state. Acreage constant at ,000.

Cropping History  Many areas in Alabama are marginal crop production areas:  “Poor” soils? – Piedmont, black-belt, coastal plains  “Never more than a week away from a drought” – Summer rainfall pattern  Lack of irrigation potential  Small, irregular fields  Rolling topography  History of under-capitalization, low production

Cropping History  Some areas are prime crop production areas: same areas TN valley, Wiregrass, Coastal Plain  Would continue to produce without government commodity payments  Greater capitalization, better management, more production inputs, increased use of new technology, larger farms

Recent Cotton Developments  Boll Weevil Eradication – early ’90’s  Budworm resistance and Bt  Roundup-Ready cotton  Crop Rotation with corn or peanuts  Export trade and the domestic textile industry

Cotton  About 80% transgenic  Roundup-ready  Bt  Stacked  About 80% Conservation Tillage  Cover Crops  Stubble Cropping  Spindle picked  Most cotton in Alabama does not receive an over-the-top insecticide treatment.

Peanuts  Now a commodity program crop  Loan price is $355 per ton, old price support was about $600 per ton  Twin row, No-till adoption  Peanut acreage shifting

Soybeans  2 Million acres in 1979 down to 200,000  Roundup-Ready and conservation tillage  1994 Plant Variety Protection Act  Emergence of private patented varieties

Corn  Emerging as important rotational crop for cotton in North Alabama  Amenable to new technology:  Bt  Twin-Row planting  High plant population  Precision Ag

Wheat  Planted for grain, forage, cover  Weed control, disease control is an issue if planted for grain

VariableFixedTotal Expenses Cost Upland cotton Peanuts Corn for grain Soybeans Wheat for grain Crop Expense Summary

TotalExpectedTotal Cost Gross ReturnProfit Upland cotton Peanuts Corn for grain Soybeans Wheat for grain Crop Costs and Returns

Crop Insurance  MPCI – Multi Peril Crop Insurance  Based on 50-75% APH x % RMA crop price  CRC – provides revenue protection based on price and yield expectations by paying for losses below the guarantee at the higher of an early-season price or the harvest price.

 Crop insurance typically insures about 50% of a farmers normal expected revenue.  Government commodity disaster payments are also based on APH, and usually provide for limited coverage of losses exceeding 75% of normal yield. Crop Insurance

Commodity Programs  Fixed Payments  Countercyclical Payments  Loan Deficiency Payments  Emergency Program Payments

Commodity Programs Fixed Payment Countercyclical Payment Loan Deficiency Payment Target Price Market Price Loan Rate Fixed and countercyclical payments are “decoupled” from production and are made on 85% of a farm’s “base” crop acreage. Peanuts are a commodity crop in this program.

 Promote Market Stability  Assist Conservation of Natural Resources  Insure Self-Sufficiency  Preserve the rural economy and community  Help all agricultural sectors  Allow alternative uses for commodities  Have a history of success  Are relatively inexpensive Commodity Programs

Issues for the future  Role of Public Sector and NGO’s in technology development and ownership of genetic material.  The importance of our agricultural identity and heritage in the face of an increasingly urban society.  Adoption of new technology  Genetics  Precision agriculture