Corn Market Overview. Traders on the Chicago Board of Trade have pushed December corn prices below the $2.00 based on expectations of a huge crop this year. Acreage planted exceeded most forecasts and the weather has been conducive to excellent yield prospects at this point in the season. So, lower prices can be easily justified. Its just difficult to realize that a bushel of corn was selling for less than a gallon of gasoline this summer in the Midwest!

Production this year will be near 9.85 billion bushels and the total supply of corn will be near 11.7 billion bushels, about 500 million bushels more than last year. Use will increase by about 200 million bushels to about 9.65 billion bushels implying carry out will be a little over 2 billion bushels, the largest since 1992. Prices will likely find living under the $2.00 roof a comfortable place to be and Georgia growers should use any rallies above that level to forward price any corn than must be sold at harvest. (George Shumaker)

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Soybean Market Situation. New crop price for soybeans joined corn in making a huge swan dive from the highs posted in early May by dropping significantly in light of the huge crop expected to come to market this fall. We may very well produce out first crop in excess of 3 billion bushels this year. If we do it will be over 250 million bushels larger than the previous large crop. Total supplies will soar to nearly 3.3 billion bushels, also for the first time over 3 billion bushels! If these supplies do come to pass we may see soybeans priced in the country at prices below $4.00 per bushel.

Use will increase this year in both domestic crush and exports. These low prices will spur demand but demand will need a real whipping in order to remove these supplies from the market. More likely we will have ending stocks close to the 500 million bushel level and that will continue to keep pressure on prices into the 2001 crop year. Use any rally to forward price soybeans and plan to sell them all at harvest. Then look to the Government Program to supplement income by maximizing your Producer Option Payment. If you have problems with the payment limits, then consider using the loan program and collect on the Loan Deficiency Payment as an alternative. (George Shumaker)

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Drought 2000's Cost on Georgia's Agricultural and Rural Economy. What will the 2000 drought cost agriculture and what impact will it have on Georgia's fragile rural economies? These are hard question to definitively answer until the crop production year is completed. However, to help get a perspective on these important questions, the University of Georgia's College of Agricultural and Environmental Sciences' Center For Agribusiness and Economic Development has estimated drought costs on a county-by-county basis as of July, 2000.

The estimates are derived from the emergency declaration surveys used by USDA to establish the designation of all 159 counties in Georgia as disaster areas. Based on this survey, the farm level losses to the drought of 9 primary summer crops are pegged at $689 million when compared to production in a normal crop year. In addition to the production lost, Georgia producers have increased irrigation cost of around $50 million, placing the total estimated cost of the drought at $739 million. Georgia producers are not the only people affected. The total impact on rural Georgia will be many times the loss production value due to reduced commodity processing and production input purchases.

Every portion of the state's agriculture has been affected, although the largest losses are expected in the South Georgia crop production counties. The largest crop counties have the greatest expected losses. The largest losses are estimated to be in Mitchell ($29.97 million), Early ($20.22 million), Sumter ($20.17 million), Colquitt ($19.06 million) and Dooly ($16.48 million) counties. All county normal year and drought production and value estimates are available at http://www.agecon.uga.edu/~caed/publicat.htm

The total estimated state loss from the 9 primary summer crops amounts to 689 million dollars. This represents a loss of about 39 % of a normal year's production. The largest anticipated loss is in cotton production, the states' number 1 row crop, at $233 million. Crops directly associated with the production of beef and dairy cattle have the next highest projected loss as pasture losses are pegged at $177 million, hay at $89 million, and silage at $3.5 million dollars. These losses will be particularly hard on beef and dairy operations as forage crops are not generally covered by crop insurance. The forage loss is valued at the cost of replacement feed. Producers may have suffered lower weight gains or had to liquidate herds because of the reduced pasture feed supplies. No attempt was made to directly value such losses. Replacement feed supplies are the natural proxy for weight gain or liquidation losses, but will likely understate actual losses. (John McKissick)

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