With farm cash receipts plunging, Kentucky is now a poultry state

Kentucky's No. 1 farm commodity this year isn't horses or tobacco, or even beef or corn. Think chicken and eggs.

"We are becoming a poultry state," said Lee Meyer, a University of Kentucky agricultural economist.

Chickens don't have as high a profile as horses in the state, but broiler and egg production has been growing steadily for several years.

In 2009, for the first time, they top all other farm products in cash receipts, at an estimated $930 million, according to UK farm experts.

Overall, Kentucky farm cash receipts fell this year by $550 million, a drop of 10.6 percent, led by plunging Thoroughbred horse sales and breeding. Net farm income is expected to fall to $1.07 billion, down 31 percent from 2008.

UK agriculture economists said 2009 farm receipts are estimated at $4.29 billion, down from 2008's record $4.8 billion.

The economists presented their annual economic forecast and review Thursday morning in Louisville at the Kentucky Farm Bureau convention.

The outlook for 2010 isn't much rosier: They predict cash receipts — which are based on sales of farm products such as livestock, milk, eggs, fruits and vegetables, and greenery — will be about the same or only slightly higher, in the range of $4.1 billion to $4.5 billion.

This year's drop was much larger than forecast last year, when the UK group anticipated a slight decline to $4.6 billion.

But the global recession hit the farm sector hard, and the horse industry in particular suffered.

This year "was the year where it turned," said Craig Infanger, senior economics professor at the UK College of Agriculture. "Dairy and hogs are a train wreck. But the biggest factor was the Thoroughbred industry — two years of lower sales prices, and stud fees going down."

For the past decade, horses have been the top Kentucky agricultural product, outstripping even tobacco beginning in 1999.

"There's no reason in my mind why the equine side can't grow back to where it used to be," said Meyer, the livestock expert. "But that's two to four years in the future."

In the meantime, he said, "poultry is going to be plugging along."

Declining exports and the rupture of the commodity price bubble had an effect on several sectors. Dairy and hogs were hard-hit on the livestock side, while falling prices also hurt corn. Weather had an effect on wheat and hay.

Tobacco, once the quintessential Kentucky crop, experienced a resurgence. UK tobacco expert Will Snell forecast a burley tobacco crop of 207.4 million pounds, the largest since the 2004 federal quota buyout that ended price supports.

Snell estimated this crop of burley for cigarettes and of dark tobaccos for snuff will be worth $380 million, about the same as last year, which was the highest since the buyout.

As Kentucky farmers moved away from tobacco production in recent years, many grew more fruit and vegetables, and nursery and greenhouse crops.

Tim Woods, a horticulture expert, said fruit and vegetables held steady this year at a cumulative $33 million, but "nursery and floriculture folks got hit hard."

With declining housing starts and development at a standstill, many nurseries were forced into fire sales to reduce inventory, he said. Nursery/greenhouse receipts fell from $86 million to $73 million, he estimated.

"For the whole horticulture section," Woods said, "we'll definitely be down as we add things up this year."