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Some Financial Help for Georgia Farmers Appears on the Way. But let's don't start spending the money just yet.

Congress recently passed "The Agricultural Risk Protection Act of 2000"; which revamps the crop insurance program, but also includes some financial assistance for farmers ($7.1 billion). However, at this writing it has not been signed by the President.

The act provides $5.5 billion for U.S. crop producers to receive supplemental AMTA payments equal to their 1999 transition payments. The act specifies the money is to be paid in September, 2000 - which is in this federal fiscal year.

That leaves $1.6 billion to be spent after the new fiscal year begins. Most of it will go directly to farmers. Of particular interest to Georgia farmers are: Payments to peanut producers for their 2000 crop of $30.50 per ton for quota peanuts and $16 per ton for additional peanuts; Another $340 million to compensate U.S. tobacco growers for their economic losses; and Oilseed producers to receive a marketing assistance loan in the 2000 crop year of 15 cents per bushel

No disaster aid has yet been legislated. But look, at least, for some proposals if the drought continues. (Bill Givan)

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Dairy Outlook. U.S. Milk production continues to increase, but at a slower rate. Production for May in the twenty largest states was up 2.6%; however, this increase is down from the 3.3% increase in April.

In the southeast order, Class I utilization (fluid milk) advanced to 61% from 57%, which added approximately 13 cents to the blend price. Utilization remained just over 10% for Class II (ice cream). At the same time, Class III (hard cheese) increased to just over 19%. Class IV (butter and powder) declined, falling from 14% to 9%. (Bill Thomas)

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Cotton Market Weakens But Should Rebound. December cotton futures have dipped below support levels at 59 to 60 cents and may be poised to test the 58 cent level. If realized, this would be the lowest price on December futures since late April. Fortunately for the US cotton grower, the world price or A-Index has also slipped a bit. Should the US price and A-Index continue to track one another downward, LDP's will increase and offset a portion of cash market losses.

Further weakness in price may develop but I do not expect it would last for very long. Export business has reportedly been steady and thus lower prices should (I say should) act to encourage further demand. This would eventually pull prices back up.

USDA's first numbers on actual acres planted will be released on June 30^th. Most observers feel this years cotton plantings will be about 15.6 to 15.9 million acres. USDA's March Prospective Plantings estimate was 15.6. A number of 15.3 or less will likely be favorable to price.

Price weakness over the 2 to 3 weeks has been in response to improved rainfall and the market apparently continues to eye and increasing possibility of a 19+ million bale crop. This is yet to be determined, however, as the crop will be made on July and August weather. There are also uncertainties about the yield potential and amount of abandoned acres in Georgia and Alabama.

Hopefully, most growers are already priced on some portion of the 2000 crop when prices were at or near the mid-60's on December futures. If not, use another rally this summer to get caught up. How much to have priced is tough to say but if demand stays strong, prices should rebound into next year. (Don Shurley)

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Hog Producers to Remain Profitable Through 2001. USDA's Hogs and Pigs report for June 1 (released June 23^rd) showed that there were 6.2 million head of breeding hogs in the U.S., 4 percent below 1999's and up only slightly from the March 1 breeding hog number. The stable breeding herd does not mean stable hog numbers. The number of sows farrowing from March through May was 2.9 million head, 3 percent below 1999's and equivalent to 47 percent of the March 1 breeding herd. It continues to take fewer breeding animals to produce the same number of pigs. As of June 1st, there were another 53.2 million head of market hogs in the U.S. (2 percent below 1999's) to make a total hog inventory of 59.4 million head (2 percent fewer than a year ago).

Based on the June 1st weight breakouts for market hogs and the farrowing intentions, hog slaughter should remain below a year ago through the balance of 2000 and into the first quarter of 2001. But, the year-to-year gap should shrink as 2000 progresses. Slaughter will be 2.5 to 3.5 percent below 1999's in the second quarter and as much as 2.5 percent below 1999's in the fourth quarter. Hog slaughter is expected to move above 2000's during the second quarter of 2001. In terms of pork production, continued dressed weight increases (currently 3 pounds above a year ago and 8 pounds above the previous five-year-average) will continue to bolster tonnage. Heavier weights combined with higher slaughter will likely push 2001's pork output to a new annual record. In terms of prices, live hog prices may have yet to see their seasonal peak at or slightly above $55 per cwt. this summer. The summer highs in 2001 may be in the upper $40's to low $50's.

Pork producers continue to be blessed with a strong demand for pork from both the US and overseas. The price consumers have been willing to pay for the supply of pork has gone up with the popularity of high protein diets, a strong economy, and an apparent desire for more taste in diets. Pork exports for January-April of this year were up about 45%. However, when the pork involved in the food aid package to Russia is removed, pork exports are only up 13% from a year earlier. April exports were down over 4%. The good news is that Japan, our largest customer for pork, has purchased 9% more this year than in 1999. Also good news is that Mexico, now our second largest pork customer, has taken 103% more pork for January-April and Canadian imports are up 16%. (John McKissick)

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