Although South Carolina farmers saw record yields in some crops this fall harvest, they got lower prices after taking those crops to market.
“Generally prices and yields are negatively correlated, which means when we have high production that tends to put downward pressure on prices and keep them lower than farmers would like them to be and sometimes below the cost of production,” Clemson agricultural economist Nathan Smith told South Carolina Radio Network.
“It’s a successful year in terms of being able to make the crop and have a crop to sell,” Smith said. “In terms of prices, the prices are not where they would want them to be. This big crop is just going to continue to push prices down a little lower for most of our major commodities like corn and soybeans, peanuts and even cotton, although we’ve seen a little price improvement in cotton. “We’re kind of in a down cycle as far as prices go in agriculture.”
Smith said prices are also determined by when crops are sold. “Farmers can’t really determine their prices if they’re growing a commodity,” Smith said. “They pretty much have to take what the market sets.”
Despite the lower prices, farmers are seeing a turnaround after two years of weather disasters.
“This has been a much better year,” he said. ” We finally in South Carolina were able to take a crop to harvest without having major impacts or major disasters, whether it be hurricane, flood or drought. Our farmers have taken quite a beating on that end over the last two, three years and so this year was a welcome year from a production standpoint.”
Smith said the challenge for farmers is to balance their cost of production with the prices they receive.