WASHINGTON – Economic woes in Asia and Russia are being felt by farmers in Maryland, where agricultural exports are expected to drop this year and crop prices have fallen with demand.
“This whole thing with Asia and Russia unwound rapidly,” said Michael Dwyer, a senior economist with the U.S. Department of Agriculture’s Foreign Agricultural Services. “Farmers all over the world are suffering.”
Dwyer said U.S. farm exports fell from $57.3 billion in fiscal 1997 to $54.5 billion in fiscal 1998 and they are expected to drop to $52 billion in this fiscal year.
Maryland agricultural officials said they expect exports to drop 15 to 20 percent from last year’s total of $296 million. The state’s top exports last year were poultry, grains, soybeans, vegetables and tobacco.
“Obviously the Asian market, because of the economic crisis … would affect the export of Maryland products,” said Errol Small, director of marketing at the Maryland Department of Agriculture.
Not only are Maryland farmers selling less overseas, but they are also getting less for their crops.
Since this time last year, corn prices have dropped from $3 a bushel to $2.20 a bushel while soybeans have gone from $7 to $5.25 a bushel. Wheat has fallen from $3.50 a bushel to $2.50.
Maryland has not seen such low prices since 1992, said Kevin McNew, a professor of agricultural and resource economics at the University of Maryland, College Park.
McNew noted that, for Maryland farmers, the economic crisis in Asia and Russia comes on top of a drought this summer that cut into their harvest.
“It’s just been a bad year,” said Herbert Wayson, a Davidsonville farmer and president of the Anne Arundel County Farm Bureau. He said he has been directly affected by low soybean and corn prices.
The dollar’s increased value against ailing foreign currencies has also driven the cost of American imports in some countries about three times as high as two years ago, said Bruce Gardner, professor of agricultural and resource economics at UMCP.
“It’s costing a lot more to buy our imports, so they buy less,” Gardner said.
“Now we have sort of a double whammy,” Gardner said. “We have both decreased prices and poor crops. It’s really hurting us in agriculture.”
Somerset County Farm Bureau President Rick Nelson, a poultry and grain farmer, said grain prices have been hurt the worst. The poultry markets have not been so bad off, he said.
“It’s kind of a catch-22 if you’re a grain and poultry farmer,” said Nelson, because if grain prices are low, then chicken markets are up, and vice versa.
Not everyone is suffering. Reduced exports can mean lower domestic prices for consumers, for farmers who buy grain to feed their animals and for companies that use grain.
Lower wheat prices have benefited Wilkens-Rogers Co., for example, a manufacturer of baking mixes and flour products. The company does very little exporting, said Michael Everett, vice president and chief operating officer, so it is not hurt by soft foreign markets.
But Calvert County tobacco and grain farmer Earl “Buddy” Hance said he has been hurt by the crisis. He said the only thing to do now that the harvest is done is “pray for next year.”
But next year might not bring the relief Maryland farmers are looking for.
The Maryland Agricultural Statistics Service predicts an increase in wheat and corn exports for 1998/99, but a further downturn for soybeans, soybean products and broilers.
“Unfortunately we just can’t offer a lot of hope for 1999,” said Dwyer. He said that the year 2000 is expected to be better.
“While things don’t look great right now, really there is a light at the end of the tunnel,” he said.