SHARE:
Agribusiness
Forget for a minute that cash receipts for the state's farm products fell by 2.3% last year, to $5.848 billion. That's the lowest figure in five years, and many economists project that the year ahead looks about the same. Although the value of most crops is rising and major declines in the sales of tomatoes and bell peppers should be reversed, the costs of production, including labor, are headed upward. Still, overall the news is good. "In what looked like another in a string of disastrous years, there is room for optimism," says John Van Sickle, an agriculture economist with the University of Florida. "We expect a better year than the last two - something close to normal."
As 1997 gets underway, those with the best reasons to celebrate include:
Tomato growers, who hailed an October deal between the U.S. and Mexico in which Mexican producers agreed not to sell tomatoes for less than $5.17 for a 25-pound box. Last winter, Mexican tomatoes were being sold for as low as $2 a box - far below Florida growers' $6 or $7 break-even cost.
Sugar farmers, who spent some $24 million to defeat a November ballot initiative that would have amended the state constitution to levy a one-cent per pound tax on sugar for additional funds to clean up the Everglades. Growers contended that the tax, which would have raised up to $900 million over 25 years, could have put cane farmers south of Lake Okeechobee out of business and lead to the loss of 40,000 jobs.
Citrus growers, who are expecting to pack 220 million boxes of oranges this year, up from the '95 - '96 season of 203 million. With citrus acreage at record levels, the Florida Department of Citrus has joined with three national health organizations in a year-long campaign to position orange juice as a nutritious weapon in the fight against cancer, heart disease and birth defects.
Vegetables and citrus
To agriculture trade adviser J. Luis Rodriguez, CEO of Fort Lauderdale's Trans-Tech-Ag Corp., the end of the tomato war with Mexico means stability in the marketplace and a halt to the parade of growers getting out of farming altogether. "Acreage is down because of the uncertainties," says Rodriguez. "But at least those still in the business know that the bankers will answer their calls and the suppliers will look at them. We were losing 10% to 15% of our growers every year. Compared to the last two years," he notes, "we are very optimistic."
Wayne Hawkins, executive vice president of the Florida Tomato Exchange predicts that tomato acreage will be down 25% this winter season compared to last. But prices will be steady. Van Sickle cautions that the Mexican agreement "does not guarantee growers a profit. But it should keep them from the losses they've had in the past few years."
The losses in bell peppers - down 12.8% or $25.25 million in 1995 from the previous year - should also be stopped as a result of the Mexican agreement. Adds Van Sickle: "My hope is that these growers will come up with a marketing plan that will spread into other crops."
In the vegetable-rich muck lands around Lake Apopka, north of Orlando, it is business as usual this season for growers of carrots, radishes and sweet corn, according to Glenn Rogers, executive vice president of Zellwin Farms. But this region's salad days are over.
Under pressure from environmentalists and the state, a coalition of farmers has offered to sell to Florida some 15,000 acres of prime farm land and quit agriculture, to stop the fertilizer pollution that continues to pour into pea-green Lake Apopka. The price tag to the state: about $95 million.
Rogers says the end of farming at the edges of the lake would take Florida completely out of carrot production. Although acreage of carrots has been declining steadily for a decade, the crop is still worth more than $15 million a year and represents 8% of total U.S. production.
Other Lake Apopka-area crops could shift south to Lake Okeechobee and Dade County, says Van Sickle. After three damaging freezes in the 1980s, Florida's citrus belt has been slipping south, with big leaps in acreage and production in the last decade contributing to an annual harvest with a value approaching $1 billion. Southwest Florida, with Hendry County leading the way, gained almost 1 million new trees from 1994 to 1995, according to the state's Department of Agriculture. Now, says Ron Hamel, executive vice president of LaBelle's Gulf Citrus Growers Association, "the growth has stopped as the industry takes a deep breath to focus on the global economy."
As production continues to increase, Hamel says, demand has to grow. "As we look to the future, we do not see an endless horizon. We have to ask, 'How much fresh citrus is the world able to consume?'" For that reason, Hamel says, the Citrus Commission's ad campaign is critical. "We have to open new markets while getting people to drink more orange juice - and not just in little shot glasses at breakfast," he says.
Sugar
Farming is always a gamble, but perhaps no crop is a safer bet than sugar cane, thanks to government price supports. Last year's crop, based on a price of $31.72 a ton, was valued at $458 million, and this year's crop figures to be worth about the same.
According to the South Florida Water Management District, measurable phosphorus runoff from cane fields is declining. Still, many in the sugar industry think growers in the Clewiston-Belle Glade area should be thinking of crop diversification.
Leo C. Polopolus, professor emeritus of food and resource economics at UF, foresees sugar continuing to be profitable for several years. "Growers have price certainty," he says, "but they have no expectation of an increase in price. Therefore, they have to increase profits through efficiency. And there is room for more efficiency." Had the tax passed, says Polopolus, "we'd have seen a move to vegetables. But under the current scenario, I see the industry surviving."
Timber
Douglas Carter, a University of Florida forest economist, says that the value of forest lands in Florida and throughout the south is increasing as huge tracts of public lands in Western states are declared off limits to loggers because of environmental concerns. According to Carter, the total value of Florida's timber harvest in 1996 was more than $752 million. Demand for solid wood is closely tied to housing starts, and declining mortgage rates augur well for the year ahead, says Carter. Steady growth in the Gross Domestic Product is also expected to buoy demand for pulp and paper products.
More than 5.4 million acres of Sunshine State woodland is owned by the forest industry, and that timber harvest is worth $1 billion. Jeff Doran, executive director for the Florida Forestry Association in Tallahassee, says of the state's timber industry, "We're like a sleeping giant. More than 50,000 Floridians are employed in forest products industries, while another 65,000 jobs come from product manufacturing." One in four of those forest products manufacturing jobs, he adds, is in Miami, which has no commercial forest land.
Cattle
Calves have been a glut on the beef market, depressing cattle sales to $291 million in 1995, down 14% from the previous year. According to UF economist John Holt, who watches livestock trends, calves are about as cheap in real dollars as they have ever been. The price of beef in 1997 is not expected to improve much. "There are just too many cows out there," he says.
