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Economy unlikely to affect many US farmers

Sparta_After losing three-quarters of his apple crop to bad weather last year, Don Armock is more concerned about what Mother Nature has in store for his fruit business in 2009 than how the global recession might affect it.

"Traditional thinking says that when the economy is struggling, people tend to not frequent restaurants as much and tend to eat at home more. The consequence of that is we tend to pick up that business," said Armock, president and co-owner of Riveridge Produce Marketing in Sparta.

While people will put off buying houses and cars in a bad economy, they still need food. That means farmers may be better able to weather the financial storms.

"Yes, we have housing problems, but we're not going to not feed our kids," said Fariborz Ghadar, director of the Center for Global Business Studies at Pennsylvania State University.

And the economic downturn could even boost income for food producers who know how to take advantage of the situation, said Mike Neal, founder and chief executive of SignalDemand, a San Francisco-based company that provides profit-analysis software to the food industry.

Consumers are likely to cut back on goods they perceive as more dispensable while continuing to purchase basic agricultural products containing corn, soybeans, wheat, butter or milk, said Daniel Sumner, director the Agricultural Issues Center at the University of California-Davis.

"The sort of core, staple food products may be doing fine but where I'm sitting right here talking to people in the wine industry or the almond or the pistachio industry, they're saying, `Hey, we're pretty sensitive to incomes,'" Sumner said.

Stephen Hueffed, who last summer launched Willapa Hills Farmstead Cheese, a Doty, Wash.-based company that makes cheese from sheep's milk, said the economic times are tough for a niche business such as his. He expects to sell fewer pieces per order this year, so he's taking steps such as contracting with a food distributor with greater reach to increase the number of his accounts.

"We are hopeful that we will be successful because we are making a value-added farm product," he said.

Sumner said one aspect of the recession that is hurting farmers is the amount of credit available to them. Many growers and producers borrow money to pay for seeds or equipment, or to operate or grow their businesses.

Marty McLendon, a peanut farmer in southwestern Georgia's Calhoun County, said credit is tight, "even with A-rated loans."

"That's going to greatly affect our business," said McLendon, of Leary, Ga. He added he's having to put up more collateral on his loans and "jump through a lot of financial hoops."

Another aspect of the economy affecting farmers is the strengthening U.S. dollar, which is good for Americans traveling abroad and for importing goods but bad for exporting food commodities. A strong dollar affects competitiveness in the world market and makes it harder for other nations to afford U.S. commodities.

And then there's another volatile variable: the cost of transporting goods to market. If fuel prices skyrocket again this year, both consumers and producers will have even more buying and selling decisions to make.

"If energy prices go back up again, that will be probably harmful to our food economy," said Phil Schwallier, of Michigan State University.

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On the Net:

UC-Davis' Agricultural Issues Center: http://aic.ucdavis.edu

___

CHARLESTON, S.C. (AP) - A new national report shows that there are more farms in South Carolina than at any time during the past three decades.

The 2007 Census of Agriculture, which surveys agriculture every five years, was released Wednesday.

It shows almost 25,900 farms in South Carolina. The last time there were that many was in 1978.

The National Agriculture Statistics Service in Columbia says the number follows national trends showing a 4 percent increase nationwide in the number of farms.

But the average farm now is smaller. The average size of a farm in South Carolina back in 1978 was 226 acres. In 2002 it was 197 acres and now it's only 189 acres.

A recent state Department of Agriculture study says agriculture means $34 billion to the state economy.

James Prichard, AP Writer © 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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