The Panhandle's growers are encountering the realities of global trade -- painfully.
Rex Holley is expecting the best harvest of cotton and peanuts he's had in five years. But with the asking price for cotton down to 50 cents a pound -- 30 cents less than it was a year ago -- Holley will be lucky to recoup the $500,000 he spends in annual production costs, much less turn a profit.
Cotton prices are at a 30-year low. Prices for peanuts are also near record lows this year, as are corn, soybeans and hogs, driven down by a one-two combination: dwindling demand from overseas markets plus a glut in supply, caused in part by increasing imports from Europe, Asia and Latin America.
Holley is clearly frustrated. "It's just one more nail in the coffin for farmers," says Holley, who works out of Baker in Okaloosa County.
Hog farmers and those who have planted corn and soybeans are in similar straits, says Gerald Edmondson, the chief agent for the University of Florida's Extension Service in Okaloosa County. As bountiful harvests outstrip demand, the farmers' own success is working against them. "We have been very efficient producers," Edmondson says, noting that projected levels of corn, soybean, peanuts and cotton to be harvested will reach record numbers across the Panhandle.
Agricultural goods from overseas only add to the glut of supply. Ed Jowers, a lifelong farmer and an extension agent in Marianna, blames the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), both of which opened doors to growers overseas: "The pressures put on us by the production of other countries are affecting us here," Jowers says.
In addition, the lingering effects of the Asian economic crisis continue to vex the Panhandle growers who have come to rely on cotton exports for profits. "Cotton has made a big comeback in the past 10 years. We've grown from 500 or 600 acres to 30,000 acres," says Jowers. "The world market was good, and we were able to profit on it during the good years."
But with many Asian countries still struggling to rebuild their economies, overseas demand for cotton continues to be flat. Neither China nor Japan -- both of which became big customers for Florida growers -- are buying much cotton these days, having chosen instead to grow their own.
Holley says the low prices won't put his farms out of business, but he's given more thought to diversifying what he grows -- and getting out of food and fiber crops altogether.
"Possibly into sod and things like that," he says. "It's just very hard to diversify when you have $500,000 tied up in equipment designed to produce cotton."
In the News
Escambia County -- A local citizens' advisory council recommended that Champion International improve its wastewater treatment facilities and reduce the amount of chemical effluent running off into 11-Mile Creek. The Escambia County Citizens Council spent nine months examining the problem. Champion said it would consider the group's recommendation.
Lynn Haven -- The Trane Co. launched a $50-million expansion that will add 250,000 square feet to its 100,000-sq.-ft. air-handler manufacturing plant. The addition will be complete by May 2000, and the company expects to hire 350 new workers by the end of next summer.
Milton -- Businessman Erwin Penniman will move his two companies, Specialty Windows of Florida and Vinyl Windows of Florida, from Pensacola to one of Russell Corp.'s two recently closed apparel mills. The move, to be completed in March, will create 50 new jobs. The two companies employ 150, had combined sales of $8 million in 1998 and are forecasting 30% growth in sales this year.
Panama City -- Panama City-Bay County International Airport selected San Francisco-based Bechtel Corp. to design, plan and build a proposed multi-million-dollar airport in West Bay.
Panhandle-- Jacksonville's St. Joe Co. (NYSE-JOE) hopes to encourage the sale of portions of its 1.1-million acres of property in north Florida by reducing the size of parcels to between 50 and 1,000 acres.
Pensacola -- IBC Turbo closed its manufacturing plant at the Port of Pensacola after 150 of its workers voted for union representation. The company, which made turbines for A.J. Mechanical, also a tenant at the port, will relocate to Georgia. The 150 workers lost their jobs.
Santa Rosa Beach -- In South Walton County, Sacred Heart Health System of Pensacola has plans to build a $25-million, 60-bed hospital and emergency care center on land that real estate company St. Joe Co. will donate, but first the Florida Agency for Health Care Administration must give its approval.
Tallahassee -- Super-Lube, founded in 1980 by John R. Lewis and Doug Behrman, two former Florida State University professors, sold 52 of its 69 stores in Florida to Atlanta-based American LubeFast for an undisclosed sum. With more than 300 workers, Super-Lube was the nation's largest independently held oil-change company, with sales this year expected to reach $20 million.
Some residents of Destin are so incensed about a proposed conference center on Okaloosa Island -- to be paid for with bed-tax dollars received by the Okaloosa County Tourist Development Council (TDC) -- that they're trying to kill not only the center, but the TDC itself. Members of the Freedom Committee are trying to repeal the 10-year-old law that established the TDC and the bed tax that funds it. Gaylan King, who heads the committee, said the group's original aim was to quash the convention center. "It's a sweetheart deal on public land," says King, who is concerned that the center could become a financial burden for local residents, despite the fact that the TDC recently doubled its bed tax from 2 cents on the dollar to 4 cents to pay for the project. "If a hurricane blows through here and they don't have tourists coming in here, filling up the hotel rooms and paying the bed tax, who's going to be responsible for the bond servicing?" King asks. TDC executive director Darrel Jones said abolishing his agency would mean no money for promoting Destin or Okaloosa Island. Last year, TDC culled $2.3 million in bed-tax dollars, and more than half went to marketing and promoting the county. The remainder paid for beach cleaning, dune restoration and improving public access to the beaches. Any repeal of the law forming the TDC will require 4,000 signatures for a referendum, and of course an election.