A story in a recent issue of Farm
Journal magazine provides an
excellent lesson in location
economics. The story details how
the south is losing its hen houses
and hog bams to midwestem
competition. The story raises some
points that should be pondered by
Delmarva farmers.
Back in the 70’s there was a
great rush to the south by egg
producers. Drawn by the warmer
climate, cheap labor and other
seeming advantages there was a
tremendous boom in hen house
construction. Those were
prosperous times and almost any
kind of an operation could show a
profit. The warm weather was nice
and the cost of feed was still
manageable and so those big egg
Small Bear Farm
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Farm
Talk
Jerry Webb
factories grew and prospered. „
But then came a much sterner
econmic period starting in the late
70’s and continuing right up to the
present time. That’s when egg
producers found that the south just
couldn’t compete. That a balmy
day can’t make up for an extra 50
cents a bushel in feed costs. That’s
really what southern livestock
producers are starting to find
according to the Farm Journal
information. Those highly con
centrated livestock enterprises
that require tremendous amounts
of com and soybeans really aren’t
doing that well in the deep south.
In really good years, Georgia,
for instance, could produce enough
grain for the egg factories. But
most of the time it meant shipping
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from the midwest and adding on
anywhere from 30 to 60 cents a
bushel to the price*just for tran
sportation. Year in and year out
southern row crop farmers cannot
compete with Indiana, Illinois and
lowa. Yields are lower, half or less
on the average and production
expenses are higher in the south, -
more fertilizer, more weed control,
more irrigation.
After several years of trying to
work with the situation, the egg
factories are relocating back to the
source of grain and closer to the
population centers. The supposed
advantages of the sunny south
have disappeared.
There is a warning in this
relocation that has implications in
a lot of places. It doesn’t take a
genius to figure out the natural
advantage the midwest has when it
comes to producing corn and
soybeans. You need only to drive
through Illinois in August to un
derstand that Georgia, the
Carolinas, Virginia, even the
Delmarva peninsula will never
compete when it comes to
producing corn and soybeans. And
if that’s an important part of the
business then the midwest has an
advantage.
On the other hand there is no
magic involved in shipping com
and soybeans from Evansville,
Indiana to Baltimore, Maryland or
Atlanta, Georgia. There is a set
price you must pay if you want the
grain. Otherwise an egg factory or
hog palace or other concentrated
Armstrong
FARM MUSCLE
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Lancaster Fanning, Saturday, September 29,1984-D2S
livestock enterprise is it the profitable and they can close it up
mercy of local production. If that when the deal goes sour,
supply is inadequate or uneven. So what happens to those
then perhaps the location is wrong ' Georgia farmers who were
- that’s what a lot of these producing com and soybeans for
operations are finding out. They the egg producers? Obviously,
left the midwest 20 years ago for a their local market is gone. They
better climate and some other can ship grain to Chicago but at a
hoped for advantages and now they substantial cost. Or they can shift
are going back. to some other crop. No doubt the
Location economics is a funny land will go on producing
thing. It takes time to work it all something even though the chicken
out. While it may be heart houses are empty,
breaking to the investors in Coffee A parallel could be drawn for the
County, Georgia to see only 2of 60 Delmarva peninsula. As long as
egg producers left in the county, it the local broiler industry prospers
is a statement on our free en- there will be a good demand for
terprise system. We are free to get corn and soybeans. But should that
into and out of business as we see industry move for whatever reason
fit and to make as much money or and com and soybean farmers will
lose as much as the situation fall on difficult times. They
dictates. A county full of empty flourish now because of the broiler
chicken houses attests to this. No industry. Without it, they simply
doubt hundreds of thousands of would be competing with midwest
dollars have been wasted on idle farmers and carrying the added
buildings, equipment and land, burden of large transportation
And at the same time somewhere costs.
in Illinois or Indiana an en
terprising soul is investing
thousands of dollars in a brand new
egg producing complex. It’s all
part of what makes our
agricultural system so productive.
Farmers are not locked in by
government mandate or birth
right. They can chose the en
terprise that seems the most
Oct.
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13 forestry session planned
EASTON, Md. - The 6th Annual
Delmarva Forestry Seminar is
scheduled for Oct. 13 at Easton’s
Tidewater Inn, sponsored by the
University Maryland
Cooperative Extension Service
(UMCES).
In addition to a general session,
headed by representatives of a
number of state regulatory
agencies and conservationists,
participants can choose from
several workshops offered:
—How to sell your timber and
stay at peace with your govern
ment - Some state regulations
govern timber harvesting
operations. As a forest landowner,
you are still responsible for loggers
on your property meeting these
regulations.
—Real estate taxes and forest
land - If you own forest land in
either Maryland or Delaware,
preferential real estate tax
assessments can save you tax
dollars.
—Wildlife, waterfowl and forest
management -- Wildlife and
waterfowl can add immeasurably
to the value of your forest land, and
they take little in return. Learn
how forest management practices
can encourage their adopting your
forest as their home.
Planners of the seminar say they
also will focus on the interaction of
forest land and the Chesapeake
Bay ecosystem. And they have
planned an optional tour of forest
land on the Bay for Oct. 14 from
8:30 to noon.
The seminar runs from 8 a.m. to
4 p.m. Registration is a must and
the $2O registration fee includes
lunch. After Oct. 8, registration
fees increase to $25. If you plan to
attend the optional forestry tour on
Oct. 14, include an additional $5.
For more information about the
seminar, or to register, call:
K. Marc Teffeau, Estension
Agent, Talbot County, at (301) 822-
1244.
ONTHE GROW
This is all part of location
economics, a slowly evolving
process that allows the factors of
production-land, labor, capital and
management-to gravitate to the
place where production is the most
profitable. For egg producers in
the 70s that seemed to be the south.
Now it looks like the midwest. In
another decade it may be
somewhere else.