Forestry contributed $3.1 billion to the Louisiana economy in 2010. (Photo by John Wozniak)

Louisiana's poultry industry gained 80 percent in 2010 over 2009, which was an exceptionally bad year. (Photo by John Wozniak)

News Release Distributed 03/28/11

Louisiana agriculture contributed $9.9 billion to the state’s economy in 2010 – up 20 percent from the year before, according to the latest figures compiled by the LSU AgCenter in its annual Ag Summary.

The biggest gainers in 2010 were the same sectors that declined the most in 2009 – poultry and forestry – according to John Westra, LSU AgCenter economist. He compiles the Ag Summary, which has been done every year since 1978, from reports prepared by extension agents across the state.

“It helps provide an accurate picture of how agriculture is faring in the state, and 2010 was a much better year than 2009,” Westra said.

The $9.9 billion figure combines two numbers – the price the farmer gets for the raw commodity and the price of the next step in the journey from farmer to consumer called value-added.

For example, for forestry the gross farm value of the timber and pulp was more than $824 million. But when this timber was turned into lumber and the pulp into paper and other pulp products, the price received was nearly $2.3 billion for a total value of nearly $3.1 billion, Westra said.

Total value of the forestry sector was up about 25 percent over 2009, which had been down about 25 percent over 2008.

In 2009, the housing market collapse caused demand for Louisiana saw-timber to drop significantly, Westra said. But in 2010, the demand for lumber went up for several reasons. The earthquake in Haiti increased the demand for lumber in the Gulf of Mexico states, and increased exports to Asia from a lower-valued U.S. dollar increased demand for lumber from western states and raised prices for Louisiana wood products.

Also, many mills increased production because they had cut back so much in 2009, Westra said.

Forestry is Louisiana agriculture’s largest sector and is heavily dependent on the strength of the U.S. housing market, which continues to be soft, Westra said.

Likewise, 2009 was a bad year for the poultry industry, which is Louisiana’s largest animal industry, mainly because of the sharp rise in the cost of grain or corn products used to feed the birds. Also, a broiler processing plant in Farmerville was open only part of 2009, whereas it was open all 12 months of 2010.

“In 2010, the poultry industry recovered as demand for meat products, particularly poultry, worldwide went up, especially as incomes rose in Asian countries,” Westra said.

Poultry contributed about $1.6 billion to the state’s economy – up 80 percent from 2009.

One commodity that had a significant increase in sales was farm-raised crawfish, which was up 31 percent from 2009 to $279 million in 2010. During the year, the acreage farmed went up by 10,000 acres to a total of 184,000 acres. Ten million more pounds were produced, and the price rose almost 30 percent, Westra said.

“Wild-caught crawfish, such as from the Atchafalaya Basin, is another category. It has not contributed nearly as much as farm-raised to the total in the past decade or so,” Westra said.

Another winner in 2010 was the sweet potato industry, which produced almost a million more bushels over the year before, bringing the total to 4.8 million, for a 25 percent increase.

“Sweet potatoes rebounded from two low-production years – in 2008 because of the hurricanes and rain and again in 2009 because of the excessive rainfall during the fall harvest,” Westra said.

But conditions were ideal for harvest during the fall of 2010.

The new ConAgra sweet potato processing plant in Delhi that began production in the fall of 2010 didn’t have much effect on the value of production in this industry, but will in 2011, Westra said.

Cotton benefited from better yields and higher prices in 2010, compared to 2009. Cotton acreage went up by 10 percent, and yields were good – up 120 pounds per acre to an average of 890 pounds per acre on irrigated land. On top of that, prices were up about 35 percent to an average of nearly 80 cents per pound.

“In 2009, the average price was about 59 cents per pound, whereas earlier this year, cotton was selling for nearly $2 per pound,” Westra said. “That’s the highest price for cotton since at least 1870.”

Tight supplies in cotton from lower production in China and Pakistan caused by flooding in 2010 triggered the sharp rise in cotton prices in 2010-11, Westra said.

Because of the good prices for cotton, he said it’s likely that farmers will produce even more acres of cotton on their land in 2011. About 248,000 acres of cotton were harvested in 2010.

Sugarcane producers also had good prices – up 21 percent to an average price of 28 cents per pound. Prices for sugar went up partly because of less production in India, where farmers put more land into corn instead of sugar.

“But, in general, the higher prices were due to lower production worldwide, which created tighter ending stocks, or supply, and increased prices,” Westra said.

Another contributing factor was in Brazil, where farmers put more of their sugar into ethanol production, partly in response to higher prices for fuel and ethanol, making the sugar supply even tighter.

“The Louisiana sugar yields were good, and prices went up,” Westra said. “That’s a rarity to have both of those happen in the same year.”

Soybeans had much higher yields, and prices remained relatively unchanged from 2009. Production was up 10 million bushels or 26 percent in 2010, contributing $467 million to the Louisiana economy.

“Some soybean producers had record and near-record yields,” Westra said.

The contributions from rice – $535 million – and the cattle industry – $411 million – were up slightly.