The price-cost squeeze facing Georgia farmers is being continued. The general decline in most major farm commodities during the past few years has affected both crop and livestock producers. This decline in per unit profit has forced many crop farmers to expand their acreage in an attempt to maintain total farm net income.

Larger operations have caused more capital to be at risk, which has caused larger losses due to unfavorable weather the past two years. Farm lenders relate that many farmer borrowers repaid operating loans in 1998 but could not make payments on long term debts. Thus, the depressed commodity markets plus a spring drought has caused both farmers and lenders to be apprehensive about the 1999 farming year.

A recent survey of County Extension Coordinators (89 counties responding) indicated that of the 11,000 full time responding farm operators, almost half (5,400 -49%) had trouble paying bills in 1998. Further, these agents indicated 262 (2%) farm operators went out of business after the 1998 season. Obviously, Georgia farmers started 1999 in less than ideal financial conditions and will be hard pressed to survive a prolonged drought.

While we often think of row crop farmers bearing the brunt of dry weather, livestock producers are also affected. Many beef farmers have had their first hay cutting reduced in 1999 due to dry weather. Further feed losses will cut into profits and may force early sales of some animals.

Some farmers relate that quota crops have carried some farm operations during past crises. But we must be aware quota crops are not found in all sections of the state and their profitability is being eroded due to quota reductions and/or steady price supports.

Georgia farmers , facing low price prospects for many crops (cotton, corn, soybeans) along with government forced cutbacks in other traditionally profitable crops (peanuts, tobacco) are in poor shape to stand the burden of a prolonged drought in1999. All associated with Georgia agriculture are concerned about the profitability of farming and will be concerned about the weather in coming weeks and months.