Of much discussion over the last couple of months have been low commodity prices. When prices tend to drop below or hover at the cost of production, everyone in agriculture speculates on what farmers will grow to maintain profitability at their operations. In Georgia the debate is typically how many acres of cotton and peanuts will be grown and how will change the market and will it affect farmers and their families livelihoods. What is never discussed is what about everyone else in rural Georgia.
I think most people can draw the quick conclusion that if farmers are looking at a tough year then the tractor dealerships and supply companies may not sell as much to the farmer. But, what is not discussed is all of the other businesses that interact with farmers who many also suffer when the farming community suffers. Take a car/truck dealership for example. Farming is pretty rough on a truck and it seems that most farmers trucks are wore out and replaced within 4 or 5 years. If things don’t change going into the 2015 crop season I doubt very many farmers will buy trucks in 2015. And for many rural dealerships, particularly in South GA, this could mean a serious drop in sales compared to 2014. What about small town furniture stores? Although farmers only make up 2% of the total population, they are a significantly higher portion of rural populations. Furniture, like vehicles, are ‘big ticket’ items that are purchased in less frequency than items like food and clothing. This drop in farmer income will also trickle down into these small furniture stores that may have a large farmer customer base (although this purchase is more personal than business related it is still affected). I could go on and on, but just think of any ‘big ticket’ item and think about how that retailer may be hurt when their sales decline just as farmers incomes/profitability decline in 2015.
And you can’t discuss farm income declines without mentioning the potential decline this will have in tax revenues for a heavy ag county. It is expected that farmland values in Georgia will slightly decline as the value of crops grown on that land decline. A decline in land value will decline the land tax revenue for a county. With less ‘big ticket’ purchases like equipment and vehicles, the sales tax revenues for an ag county will also decline. When these rural ag counties are faced with these declines in tax revenues they are faced with some very tough choices on how to cut back on county spending or raise taxes. Neither situation is good for the county resident.
So next time you read a headline saying something like “Georgia Farmers Suffer in 2015”, think of all of the other folks in rural Georgia who depend on the business of farmers and remember that they suffer too.