Northeast farmers sidestep economic squeeze, so far. Crop variety helps Moriuchi peach farm stay in the pink
The financial problems of agriculture seem very far away on Fred Moriuchi's farm. In one of his peach orchards, migrant workers move almost noiselessly from tree to tree. They carry wooden stepladders, and on this day they are thinning the overburdened branches. In a few weeks, these peaches will be ready for harvest.
``Peaches could be average to really good,'' says Mr. Moriuchi on his farm in Moorestown, N.J. Like many farmers in the Northeast and mid-Atlantic states, he is talking of expected profits on certain crops. Farmers from Maine to Virginia are finding that the general economic squeeze on agriculture has had less impact in this region, than in such areas as the Midwest.
A recent survey of New York farmers provides the latest evidence. Only 5.7 percent of the respondents had debts greater than 70 percent of their assets, according to the survey by Cornell University and the New York Crop Reporting Service. Surveys of the Midwest have shown a much more dire situation: nearly 1 in every 5 farmers with high debt loads.
And yet beyond the numbers, many economists are concerned that times will get tougher for Eastern agriculture.
``The problems here are not as bad yet as they are in the Midwest,'' says Eddy LaDue, an agricultural economist at Cornell, who collaborated on the survey. But in at least some sectors, ``the worst is yet to come.''
Up to now, several factors have helped insulate Eastern farmers from the general problems in agriculture.
Every business day, Andrew Levari drives his truck full of produce to the vegetable auction in Vineland, N.J. Prices swing wildly here, but Mr. Levari is confident.
``You never make it big,'' he says. But the situation is stable. Part of these farmers' success is that each one grows a great variety of crops. ``You have so many crops that one will carry you,'' says a farmer.
Another plus: The boom in Midwestern farmland prices in the 1970s never happened here, says Kenneth Robinson, an agricultural economist at Cornell. This meant that when hard times did come, Northeastern land prices did not have as far to fall as those in the Midwest. Last year in the ``corn belt,'' for example, farmland values fell a drastic 25 percent, according to the United States Department of Agriculture. In the Northeast, the drop was only 2 percent.
And for some farmers here, land prices have continued to go up. Moriuchi, for instance, would like to reduce the high debts he incurred a few years ago in an ambitious $1 million building program. He plans to sell 100 to 200 acres of his 600-acre farm. But from a Midwest standpoint, his situation is enviable. In the last years, he says, the value of his farmland has jumped from $4,000 to $10,000 an acre.
The reason: Fast-growing Philadelphia has made his land more attractive for suburban development. Against this backdrop, however, some sectors of Eastern agriculture are in deep trouble.
In the short term, the farmers in the worst economic shape may well be Northeastern grape growers, says Jerry White, another agricultural economist at Cornell. A worldwide boost in grape production has hit US growers just when demand for grape products, such as wine, was declining. And the growers, saddled with the high value of the dollar, which makes imports less expensive, are finding it hard to compete.
To a lesser degree, apple growers in the region have been facing stepped-up competition from Washington State and the West, Professor White says. In some local areas of Virginia, hard-hit tobacco farmers have switched to vegetable and other nontraditional crops in an attempt to remain profitable, says Berkwood Farmer, chief economist of Virginia's Department of Agriculture and Consumer Services.
But it is the dairy industry that commands the most concern. On Monday, the government cut milk price-support levels by 50 cents for every 100 pounds of milk. Northeast dairy farmers, which make up a substantial part of Northeast agriculture, won't see the full impact of the cuts until October, says George O'Brien, a economist with Dairylea Cooperative Inc. in Syracuse, N.Y. But ``it's a squeeze on them.''
More unsettling may be technological advances in boosting cows' milk production, he says. By late 1987 or early 1988, a bovine growth hormone could be introduced that would substantially increase milk production and force many dairy farmers out of business. According to one estimate, at least a quarter of the Northeast's dairy farmers will disappear because of it by about 1992.
Many agricultural experts say these economic and technological forces could well transform agriculture in the East -- leading to fewer and larger farms run by increasingly sophisticated operators.