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2006 Economic Outlook: Agriculture: Growth in Beef, Broiler Production

Posted on: Monday, 20 February 2006, 03:03 CST

By Anonymous

OUTLOOK: While not quite the record-setter that 2004 was, 2005 was another very strong year for agricultural receipts, despite the mass exit of tobacco farmers in the first year of the post-buyout era. It's estimated more than 50 percent of tobacco farmers left the crop in 2005, according to Will Snell, agricultural economist at the University of Kentucky. Unless economic incentives suddenly improve in 2006, "look for additional farmers exiting tobacco production, with those remaining continuing to expand the scale of production," Snell said.

Nationwide, broiler production is increasing 3 to 4 percent a year, "but in Kentucky, expansion will probably be two to three times as great," said Lee Meyer, an agricultural economist at UK who specializes in livestock and meats.

Overall, beef will continue to be a leading product in much of Kentucky as farmers turn to cattle to replace lost tobacco income. High prices and support from tobacco settlement and buyout funds will fuel expansion of the state's cattle industry in 2006 - even though it's likely prices will fall in a few years as the growing U.S. cow herd hits markets, Meyer said.

JOBS OUTLOOK: DOWN Farm employment will probably continue declining due to the loss of tobacco production, as agribusiness employment remains relatively flat, according to UK. "Rising production costs cloud the employment situation and the overall economic outlook for Kentucky agriculture," said Richie Farmer, commissioner of agriculture. Farmer added, however, that early- stage initiatives in agri-energy and biomedical research could fuel some job growth.

Copyright Lane Communications Group, Inc. Jan 01, 2006

Source: Lane Report, The

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