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CALHOUN COUNTY: Global unease hits home in low commodity prices
CALHOUN COUNTY

CALHOUN COUNTY: Global unease hits home in low commodity prices

The winter's chill and the land's dormancy will soon be a memory as Calhoun County farmers ready for spring plantings.

But 2020 is bringing with it a growing sense of unease among county farmers about what the year may or may not bring.

"There is continued anxiety in the farm community," Calhoun County Clemson Extension Agent Charles Davis said. "Not to say that farming is not an anxiety-filled adventure every year, but there is a growing anxiety that seems to be compounding."

So what are these negatives heading into the spring 2020 planting season?

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"The biggest is commodity prices," Davis said. "When everything you grow and sell has a negative price potential in the coming crop year, it makes for sleepless nights."

"Normally, there is at least one bright star out there, but this year there are none," Davis said.

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While some positive pricing opportunities recently have helped farmers cover cash operating expenses, it has not been enough to add equity to the farm operation.

"Prices are being impacted by any number of world factors," he said.

These include:

  • U.S.-China trade deals that have not met expectations on some fronts.
  • The coronavirus and its impact on global trade with China and crop commodities.
  • The availability of agricultural pesticides and fertilizer products, many of which come from China. A shortage has the potential to increase crop-production costs.
  • Extreme rainfall across the Cotton Belt and Midwest this winter. The water may affect planting dates on corn initially, but other spring crops eventually.
  • The eroding farm equity that has taken place since the floods of 2015. 

As a result, Davis said most farmers are playing it safe and maintaining their crop plantings relatively unchanged from last year.

"There is just no major impetus for wholesale changes," Davis said. "There will be some adjustments on some farms, but most have indicated they plan to stick to their crop mix from last year."

Calhoun County farmer Drake Perrow is one example.

On his farm, he plans to plant 1,500 acres of cotton and about 800 acres of peanuts, which is consistent with crop plantings the farm has done for quite some time.

"We are set up for these two crops, and that is the reasoning," Perrow said. "There is not a commodity out there that the prices are very good, and if you are someone who is not set up to plant grains, it is just cost-prohibitive to purchase equipment to harvest it and have storage to store it."

Corn

Davis expects corn acres to be lower this year compared to last year's 9,200 acres.

"Wet weather currently has folks thinking hard about their corn acres, but if the weather pattern changes soon, we might follow through on the original corn acres we intended to plant," Davis said. "With corn price potential around the $4.30 to $4.50 range, we can be profitable with corn under irrigation."

"Dryland corn is always a big gamble in South Carolina," he said.

Last year, dryland corn suffered from the heat and drought.

Corn is typically planted in the area in April, with harvest in late July and early August.

Cotton

Already depressed cotton prices due to trade negatives with China are being amplified further with the coronavirus fears and fall-off in demand.

"Markets don’t like uncertainty, and at the moment, uncertainty rules," Davis said. "Cotton prices have fallen over 3 cents a pound in the last several weeks and continue a downward trend."

The poor prices will translate into reduced plantings from the 25,000 acres in Calhoun County in 2019, Davis said.

Cotton prices heading into planting were hovering in the 60-cent-per-pound range, below the desired 80 cents.. Forecasts from economists believe cotton will continue to hover in the 60-cent range.

Cotton is typically planted in the area about the middle of April into May, with harvest September through November.

Peanuts

Davis believes peanuts are the most likely beneficiary of low cotton prices, with acreage potentially seeing a rebound from 2019 as "producers crunch the numbers on production costs."

Peanut prices continue to remain stagnant in the $425 to $450-per-ton range.

"The problem with peanuts is that they are expensive to grow and are time-consuming at planting and harvest," Davis said. "Some producers saw better profit potential in other crops last year, so they cut their peanut acres."

This year, peanuts actually may have the best potential to see a profit as compared to other commodities.

Peanuts typically are planted in the middle of April depending on varieties, with harvest around the middle of August.

Soybeans

Davis said soybeans will remain rare in Calhoun County as is typical each year. Last year, there were only about 1,300 acres planted, and he expects the same for 2020.

"Prices have been trending down since January, coming off a trade tariff bump in December," he said. "Purchase expectations have not developed like expected with China, and now the virus scares are again keeping the lid on exports."

"Soybeans have not benefited from the negativity," he said. "As with any commodity, there are brief rallies, and the prudent farmer will take advantage of these rallies to lock in a profit."

Soybeans are planted typically from April through early May and harvested in September.

Hemp

In Calhoun County, Davis says hemp "seems to be a crop that is on the ropes."

High production costs, quality issues, production issues and not getting paid for the crop grown have all been problems reported from the few farmers in the state who have grown the crop.

"In Calhoun County, there is little to no hemp planted," Davis said. "A few small plots existed this past year but nothing of any commercial consequence."

Davis said marketing the crop has also been an issue, and prices being offered are much lower than they were a year ago.

"Basically, the market is flooded with cheap CBD oil, so profit margins that were promised are not being realized, even if you can get a check in the mail," he said. "The largest hemp processor in the country just filed for bankruptcy."

Davis said he sees the only possible future of the crop being contingent upon positive research findings from the U.S. Food and Drug Administration and loosening of legal restrictions surrounding the crop.

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"As it stands right now, those who are experts at growing and marketing specialty crops might make a go of hemp, but the average producer will probably take a beating in the hemp world," he said.

Contact the writer: gzaleski@timesanddemocrat.com or 803-533-5551. Check out Zaleski on Twitter at @ZaleskiTD.

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