Opinion: Florida Ag Holds Steady

In 1896, William Jennings Bryan said, “Burn down our cities and leave our farms and the cities will spring up again as if by magic, but destroy our farms and grass will grow in the streets of every city in America!” Despite the turmoil our economy is currently experiencing, agriculture has remained Florida’s most stable industry.

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Following the terrorist attacks of 9/11, Florida’s tourism industry suffered greatly, but agriculture, our second largest economic driver, continued to demonstrate resilience. Economically, there are a lot of variables that can impact Florida agriculture in the coming year, but the one powerful constant that should never be discounted is the determination and resiliency of our agriculturists.

At this early date, citrus industry analysts are predicting a reduction in the orange crop from 2008’s 169.7 million boxes to around 150 to 155 million in 2009, caused in part by hurricane damage. Growers are being impacted by large carryover inventories of orange juice, higher costs for fuel and fertilizer, and the expense of battling canker and greening. Lower retail prices, a smaller Brazilian crop, and the potential for a reduced Florida crop could have a positive influence on fruit prices. The University of Florida’s Institute of Food and Agricultural Sciences estimates production costs have increased by as much as 24¢ per pounds solid to combat greening and canker.

All agricultural commodities are facing higher production costs due to substantially increased energy and fertilizer prices. Fertilizer has increased 200% in just five years. One issue impacting fertilizer cost is increased natural gas prices. Also, China’s burgeoning economy is causing reduced exports to satisfy its own demand.

Stabilization of world commodity markets could result in lower input costs for nursery owners and more disposable income for consumers. Lower energy costs could also jumpstart the slumping housing market, providing a subsequent boost to plant and tree sales. All things considered, industry analysts are cautiously optimistic about the outlook for 2009.

The beef industry is currently feeling the effects of lower gross sales prices on calves, in some cases down 17%. A factor that may support prices is the currently tight beef supply due to reduced herd size. With this and some relief on input costs, i.e. lower grain and corn prices, and cheaper fuel, things could be brighter in 2009. Demand for beef remains strong, providing ranchers with valid reasons for optimism for 2009.

The effect of higher crop input and energy prices continues to challenge Florida agricultural producers. This situation has been exacerbated by the weak economy, adversely impacting product demand and prices. Our nursery industry — especially growers of woody ornamentals, trees, and sod — continues to be hampered by sluggish housing starts. A reduction of disposable income for consumers has negatively impacted demand for premium foods like beef and orange juice. We are hopeful that economic conditions will improve in the second half of 2009, and that, coupled with moderating to lower crop input prices, will result in improved profitability for the state’s growers and agricultural industry.