Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 9, 1994 TAG: 9401050282
SECTION: BUSINESS PAGE: F3 EDITION: METRO
SOURCE: Greg Edwards Staff Writer
DATELINE: LENGTH: Medium
Shrinking the government safety net for farmers makes exporting farm products more important, Espy said.
"We can scream; we can curse; we can lambaste; and sometimes even cause some delay in the inevitable, but the fact is that U.S. budget support for agriculture will continue to decline," Espy told the U.S. Department of Agriculture's outlook conference last month.
Producers of beef cattle, Virginia's top agricultural commodity, don't get government subsidies, but the grain they or others grow to feed the cattle can be eligible for government price support.
Reggie Reynolds, executive secretary of the Virginia Cattlemen's Association, said he expects Virginia cattle will sell for 3 to 6 cents less per pound in 1994 than they did last year. That's down from 85 to 87 cents per pound for a 700-pound steer.
Cattle prices will be down because the beef supply will be larger this year and because the cost of feed needed to fatten cattle for slaughter has risen. Midwestern flooding and a Southern drought last year caused grain shortages, and the price of a bushel of Midwest corn jumped from $2.40 to $3 in the fall.
But overall, Reynolds said, the cattle industry is fairly healthy, and he expects it to grow as long as it remains profitable.
Grain prices also are an important consideration for the dairy farmers. Milk is Virginia's third-largest farm commodity.
Cline Brubaker, a Franklin County dairy farmer and industry leader, said he's usually able to lock in his feed prices six months in advance but can't do that now with grain prices on the rise.
Last year was not as good a year for farming as was 1992, and Brubaker is not optimistic that 1994 will be a boom year. Some are expecting higher milk prices, but higher feed prices would wash out any gain, he said.
Regardless of its year-to-year variations, Virginia agriculture plows a wide furrow through the state's economy, according to a new study by Virginia Tech researchers.
The work by agriculture economist Tom Johnson and research associate Ernest Wade concludes that the agricultural sector of the state's economy accounts for more than one-tenth of the gross state product and nearly 15 percent of the jobs in Virginia.
Conducted for the Virginia Department of Agriculture and Consumer Services, the study looks at the direct and indirect impact of agriculture on the state's economy.
While most people probably see bucolic country scenes with cows and chickens when they think of agriculture, farming accounts for only a small part of the agricultural economy in Virginia.
In 1992 - the latest year for which figures are available - sales from the farm in Virginia were $2.9 billion. But total sales in the agricultural sector were $24.3 billion, including $14.3 billion from the sales of manufactured food and tobacco products, $2.2 billion from the distribution of agricultural products, and $4.9 billion for the materials and machinery used by farmers.
Employees and owners in the agricultural sector used their income to produce another $9.3 billion in sales as they purchased consumer goods and services, according to the Tech research.
by CNB