June 14, 2013

A Legislative Perspective on the Kentucky General Assembly with State Representative Rick Rand

FRANKFORT – While it should surprise no one that agriculture is one of Kentucky’s biggest industries, we got a much clearer picture late last month of just how much of an impact it has on our economy.

According to the University of Kentucky’s College of Agriculture, the commonwealth’s farmers are the foundation for more than $46 billion in annual revenue.

It all begins with the commodities they raise and grow – everything from cattle to corn, hay to horses and peppers to poultry. Combined, the cash receipts for all of these were about $5 billion in 2012, a record that is almost a billion dollars more than Kentucky farmers saw in 2009.

Overall, 90,000 people across the state work directly in agricultural production, and the food and fiber companies that rely on these raw goods employ another 144,000. The forestry and wood products industries, meanwhile, add 51,000 jobs to that total. It’s worth noting that we’re third in the nation in hardwood production, and are the leader in the South.

Speaking of that region, UK cited a broader study showing that farming’s impact is just as sizeable across our corner of the country. The commodities from the farms, forests and fisheries in Kentucky and her fellow southern states generate $240 billion in economic activity each year, while the value-added products ring up $1 trillion more.

With summer officially arriving on Friday, and with the weather more or less cooperating – at least better than last year – there is reason to hope that this year will be the best one yet for farming in Kentucky.

Last week, for example, agricultural experts reported that nearly all of Kentucky’s corn has been planted, although the crop’s overall progress still trails the state’s five-year average. Still, nearly 80 percent is rated as excellent or good, and just four percent is considered poor.

The tobacco market, meanwhile, continues to see growth. In March, the United States Dept. of Agriculture (USDA) said it expected the burley market to grow about five percent when compared to 2012, which was Kentucky’s best year since the tobacco buy-out in 2004. Sales topped $400 million last year, with dark tobacco accounting for about a fourth of that.

Late last month, during a meeting of the Kentucky House of Representatives’ Tobacco Task Force, UK’s leading tobacco expert said that the current burley crop is about a week or so behind normal. He pointed out that fewer farmers are growing the crop, but those still in the business continue to add acreage. Later in the meeting, the committee learned that the number of burley farmers in Kentucky has declined nearly 40 percent since 2010.

Another market experiencing a sea change is beef cattle. UK’s College of Agriculture said there are 30 million head of cattle across the country, which is the lowest total since the early 1960s. In Kentucky, the numbers are down 15 percent when compared to 2007.

Much of that decline is due to the fact that people are just not eating as much beef. UK said the peak year was 1976, when the average citizen ate 94 pounds a year. It’s now around 55 pounds per person.

Nevertheless, Kentucky’s future in cattle is expected to hold steady if not grow, because our pasture-based system is becoming much more competitive with those states that rely more on feedlots.

There are many reasons that farming in Kentucky is experiencing better days than it has in a long time. For one thing, the industry is much more diverse, with 10 commodities bringing in at least $100 million a year. The General Assembly has helped that along by dedicating half of our annual tobacco settlement payments to agriculture – spending more than $400 million combined since 2001.

Overall, there are still challenges, of course. 2014, for example, is the last year scheduled for direct tobacco buy-out payments, which provide $200 million a year.

Congress, meanwhile, appears to be in the final stages of approving a far-reaching, five-year farm bill. Many national farm groups have spoken in favor of the U.S. Senate version adopted by that chamber early last week, though there is some concern about its possible effect on farm subsidies. There is hope a compromise can be signed into federal law later this year.

Because it depends so heavily on the weather and the markets, agriculture faces more risk every year than most industries, but over the last decade, it truly has come a long way, and there is reason to believe that this trend will only continue. Given its role as the base of a $46 billion economy, it’s imperative we make sure this happens.

If you would like to let me know your thoughts on this issue, please contact me at Room 366B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.

You can also leave a message for me or for any legislator at 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.

I hope to hear from you soon.

Paid for by Rick Rand for State Representative, Regina Rand, Treasurer