1. Acreage Shifts in Southern Commodities: Why and Is It Temporary? National Farm Business Management Conference June 9-13, 2013 Dr. Nathan B. Smith, Amanda Smith, and Dr. Don Shurley

2. Total Cropland Source: U.S. Census, NASS USDA

3. Major Land Use

4. Acreage for Principle Crops 2007-2012 Source: Acreage and Crop Production Annual Summary, NASS

5. Principle Field Crops Planted All Hay 1 Barley Canola Corn Cotton Dry Edible Beans Oats Peanuts Potatoes Proso Millet Rice Rye Sorghum Soybeans Sugarbeets Tobacco 1 Sugarcane 1 Sunflower Wheat –Durum –Other Spring –Winter Source: Acreage, NASS 1 Harvested Acres used

6. SE Field Crop Acreage Trends 2006-2011

7. Active CRP Acres ACTIVE CRPACRES EXPIRE StateACRES9/30/20119/30/20129/30/2013 ALABAMA394,01180,78578,77435,528 ARKANSAS239,51312,26033,65615,217 FLORIDA56,7299,54511,7106,331 GEORGIA312,44123,49933,71215,524 KENTUCKY350,94536,96546,45935,113 LOUISIANA327,90311,86238,11923,687 MISSISSIPPI846,342101,070166,30865,384 NORTH CAROLINA117,11712,86810,7367,858 SOUTH CAROLINA158,13120,55535,32114,674 TENNESSEE199,81534,25328,82251,556 VIRGINIA63,4125,0565,6174,754 SE3,066,359348,718489,233275,626 US30,718,1574,410,3086,537,0703,323,570 Source: Monthly CRP Acreage Report, FSA

8. Factors Affecting Georgia Row Crop Acreage Relative Prices (cotton, corn, peanut, soybeans & wheat) Government Programs – used to be major driving force Infrastructure – Handling Facilities - Cotton Gins, Peanut Buying Points, Grain Elevators, Port – Processors - Shelling Plants, Feed Mills, Oilseed Processors, Ethanol Plant, Flour Mill, Textile Mill – Ownership – more farmers share in cotton gins, peanut buying points, sheller Risk Management – Crop insurance – Marketing Cooperatives & Contracts Access to Capital & Capital Costs – Operating Loan – Machinery and Equipment – cotton & peanuts capital intensive, more leasing Technology – Seed, Chemicals, Irrigation Cost of Inputs Crop Rotation Weather Water

9. Georgia Trends in Row Crops Increased acres More interest in corn and soybeans Growth in grain infrastructure Increase in irrigation units Clearing of edges of fields and pine plantations brought back into production More corn in cotton, peanut rotation.

11. Typical Georgia Crop Rotations 2012 GPAC Winners GrowerCrop Rotation 1Peanut-cotton-corn-peanut 2Cotton-cotton-cotton-peanut 3Cotton-corn-corn-peanut 4Peanut-vegetables-cotton-peanut 5Peanut-cotton-corn-peanut 6Peanut-corn-cotton-peanut 7Peanut-cotton-corn-peanut 8Peanut-cotton-cotton-peanut

12. 12 Georgia Major Row Crops, Vegetables, Fruits & Nuts Ranking by Farm Gate Receipts, Million $ 2005200620072008200920102011Average Cotton7237456295847131,1671,508867 Vegetables896828895849916753781845 Peanut423321382582401471586452 Fruits/Nuts268306242268366451655365 Corn84103213237203227312197 Soybean3326691161681146584 Wheat38356212257628366 Tobacco4555657053465455 Grain Sorgh.3.24.49.212.27.511.5179 Total25132423256628402885330340612942 Gov’t Pmts417345319311252318227313 Crop Ins.581009310796117222113

13. SUMMARY OF SOUTH GEORGIA CROP ENTERPRISE ESTIMATES, 2013 By A.R. Smith, N.B. Smith and W.D. Shurley, UGA Extension Economists, Department of Agricultural and Applied Economics April 2013 Estimate Conventional TillageIRRIGATED NON-IRRIGATED GrainInt Mgmt Grain CottonPeanutsCornSoybeansSorghumWheatCottonPeanutsCornSoybeansSorghumWheat EXPECTED YIELD per ACRE1,200 lbs 4,500 lbs 200 bu 60 bu 100 bu 75 bu 750 lbs 3,200 lbs 85 bu 30 bu 65 bu 55 bu EXPECTED SEASON AVG PRICE$0.80 /lb $403 /ton $5.70 /bu $12.00 /bu $5.13 /bu $6.00 /bu $0.80 /lb $410 /ton $5.70 /bu $12.00 /bu $5.13 /bu $6.00 /bu GROSS RETURN per ACRE$960$906$1,140$720$513$450$600$656$485$360$333$330 VARIABLE COSTS per ACRE Seed9010593541450881055054932 BWEP1.21 0.76 Fertilizer & Lime*14753339761841471135313276117104 Chicken Litter Chemicals75175157822417114715342215 Custom Application/Hand Weeding15 Scouting10 Fuel and Lube**497327232737477327232721 Repairs and Maintenance244817141718244817141710 Irrigation***9773976142 Labor28341211121427341211127 Insurance162720153612313729222415 Land Rent Other Interest on Operating Capital18192011 1014169877 Gin & Warehouse (net after cottonseed) -10 -6 Drying and Cleaning 5461 317 3826 205 Marketing and Fees 15 10 TOTAL VARIABLE COSTS per ACRE$560$676$701$341$396$336$435$563$317$241$254$216 RETURN ABOVE VARIABLE COST per ACRE$400$231$439$379$117$114$165$93$167$119$79$114 BREAKEVEN PRICE (Variable Cost)$0.47 /lb $300 /ton $3.51 /bu $5.68 /bu $3.96 /bu $4.48 /bu $0.58 /lb $352 /ton $3.73 /bu $8.04 /bu $3.91 /bu $3.92 /bu FIXED COSTS per ACRE Machinery and Equipment1161466155586011514661555836 Irrigation120 Buildings Miscellaneous Overhead283435172017222816121311 TOTAL SPECIFIED FIXED COSTS per ACRE$264$300$216$192$198$77$137$175$76$67$71$47 TOTAL COST EXCL. LAND & MGT per ACRE$825$976$917$533$594$412$572$737$394$309$325$263 RETURN TO LAND AND MGT per ACRE$135-$70$223$187-$81$38$28-$81$91$51$8$67 BREAKEVEN PRICE (Total Costs)$0.69 /lb $434 /ton $4.58 /bu $8.89 /bu $5.94 /bu $5.50 /bu $0.76 /lb $461 /ton $4.63 /bu $10.28 /bu $5.00 /bu $4.78 /bu BREAKEVEN YIELD per ACRE1,031 lbs 4,846 lbs 161 bu 44 bu 116 bu 69 bu 715 lbs 3,597 lbs 69 bu 26 bu 63 bu 44 bu * Expected fertilizer $/lb. of nutrient are as follows: N=$0.70 P=$0.50 K=$0.50 ** Season Average Diesel fuel price of:$3.75per Gallon *** Average of diesel and electric irrigation application costs. Electric is estimated at $7/appl and diesel is estimated at $17.25/appl when diesel cost $3.75/gal. Crop Comparison Tool

14. 2013 Net Returns Comparison, Non-Irrigated CornCottonPeanutsSorghumSoybeans Expected Yield857503,2006530 Expected Average Price$6.00$0.78$400$5.40$12.00 Crop Income Per Acre$510$585$640$351$360 Variable Costs Per Acre$326$440$571$261$258 Net Return Above Variable Cost$184$145$69$90$102 Net Return Above Variable Cost & $75 Land Rent$109$70($6)$15$27 Computer Spreadsheet Budgets Printable Budgets Crop Comparison Tool http://www.ces.uga.edu/Agriculture/agecon/new.html

15. 2013 Net Returns Comparison, Irrigated 2013 Ag Forecast CornCottonPeanutsSorghumSoybeans Expected Yield2001,2004,50010060 Expected Average Price$6.00$0.78$400$5.40$12.00 Crop Income Per Acre$1,200$936$900$540$720 Variable Costs Per Acre$709$567$680$396$346 Net Return Above Variable Cost$491$369$220$144$374 Net Return Above Variable Cost & $200 Land Rent$306$184$35($41)$189 Computer Spreadsheet Budgets Printable Budgets Crop Comparison Tool http://www.ces.uga.edu/Agriculture/agecon/new.html

16. Comparison of 2013 Estimated Net Returns, Georgia, Non-Irrigated CornCottonPeanutsSoybeans Expected Yield 857503,20030 Expected Average Price 1 $5.75$0.82$450$11.75 Crop Income $488$615$720$352 Variable Costs 2 $326$440$571$258 Net Return Per Acre Above VC $162$175$149$94 Net Return Per Acre Above VC + $75 Land Rent $87$100$74$19 1/ Basis the futures prices as of1/15/2013. Peanut price is expected average price. 2/ Assumes Jan 2013 costs, Crop Comparison Tool, Department of Agricultural and Applied Economics, University of Georgia Comparison of 2013 Estimated Net Returns, Georgia, Irrigated CornCottonPeanutsSoybeans Expected Yield 2001,2004,50060 Expected Average Price 1 $5.75$0.82$450$11.75 Crop Income $1,150$984$1012$705 Variable Costs 2 $709$567$680$346 Net Return Per Acre Above VC $441$417$332$359 Net Return per Acre Above VC & $185 Land Rent $256$232$147$174

23. Compiled by Nathan Smith, UGA Extension Economist, Source: NASS USDA, QucikStats and Propsective Plantings, March 28, 2013

24. SWOT Analysis for SE Row Crops Strengths Productive Soils Water resources Longer season Sandy soils and climate for peanuts, cotton Weaknesses Need fertility help Topsoil depth Dryland yields Smaller, irregular fields Grains infrastructure Opportunities Diversification Respond to market signals Proximity to ports Specialty markets Threats Climate change Pests Population growth Water use & availability Southern specific cultivars

25. Thank You Nathan Smith nathans@uga.edu 229-386-3512