BUTLER/CUNNINGHAM

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AL Ag Facts:

Finances

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This section presents some farm financial balance sheet data for farms in the Southern Seaboard Region of the US, of which ecological-agricultural region Alabama is a member along with other states such as Georgia, Florida and Southern Carolina (see the page on this site entitled "US Agricultural Facts" for a description of the current ecological-agricultural regions). It is difficult to isolate economic statistics of this kind for Alabama alone (Alabama Agricultural Statistics has some aggregate income figures but does not separate out farm income and expenses by category). However, the statistics for the Southern Seaboard likely represent the situation in Alabama and likely can be taken as a guideline.

If the reader is not already familiar with the financial balance sheet data for the US as a whole, comparing the ecological-agricultural regions, and with comparing farms of various financial sizes, then please refer to the page on this site entitled "US Agricultural Facts". If referring back and forth is too cumbersome, then please notify the site developer (Mike Polioudakis, polioej@acesag.auburn.edu), and, if possible, he can move some of the references from that page to this page.

In general, the Southern Seaboard is at an economic disadvantage over other regions of the country that are also primarily agricultural, in particular the Heartland and the Fruitful Rim regions. Small farms are at a disadvatage over medium size and large size farms. Farms do not begin to show a consistent profit until they have annual revenues of at least $250,000. Farms of all size categories and in all regions show low and variable profit.

The first set of five buttons to the left gives balance sheets for 1996-2000 for farms by economic size categories as indicated on the buttons, for the Southern Seaboard region. The Southern Seaboard figures follow the national pattern, except that small farms here consistently lose considerable money, and the threshold for making a consistent profit seems even higher in the Southern Seaboard than elsewhere. Not until the $500,000 category do farms make a consistent profit. Not until the $1,000,000 category do farms here make a profit that is at all comparable with other non-farm economic ventures in the same time period. Note the drastic decline in the number of small farms with revenues under $100,000 just in the last few years. Even so, since about one third of all farms are small farms, one third are medium sized farms, and only a few are large farms (see data here and data above), the lack of financial return and financial stability for small and medium size farms might be of some concern.

The second set of five buttons to the left gives balance sheets for 1996-2000 for some typical agricultural enterprises in the Southern Seaboard. Unfortunately, traditional row crops such as corn are now only so sporadically grown (except for immediate consumption and local consumption), and produce such erratic yields, that reliable statistics are not available for farms in the Southern Seaboard. Beef, and Peanuts-Cotton-Tobacco (little tobacco is now grown in Alabama), are mature industries hanging on or slowly declining, with low and inconsistent profits. Not all beef farms are run expressly as profit-making enterprises, and so the figures here might not fully represent profit-making beef ranching, but it is not possible to separate out the kinds of farms. The dairy farms that have managed to hang on are doing moderately well. Poulty and Truck-Nursery are new, expanding industries with respectable profit figures for agricultural enterprises. However, even poultry shows some losses in some years. Truck-Nursery showed some losses a few years ago but has shown profits since then.

The third set of five buttons to the left gives balance sheets for 1996-2000 for farms according to the age of the principal owner-operator. Young people do poorly. They have the highest debt load ratios, and they lose money. Farmers begin to do well as they mature. Probably they get a handle on their debt management. Farmers 65 and older once again do not do well as farmers, probably because many of them do not rely on the farms alone for a living. However, not all of the people in this age category are retirees with a comfortable pension living out the life style of gentleman-and-lady farmer. Many older people may not be able to supplement what they grow with much of a cash income from elsewhere, so the performance of this age group might also be of some concern.