Michigan State University Extension
Ag Experiment Station Special Reports - SR329201
07/28/98
Jake Ferris Department of Agricultural Economics Michigan State University
The message from the "Status and Potential of Michigan Agriculture" is carried in a set of 39 position papers. This publication is designed to provide readers with the essence papers.
Demands Upon Agriculture
The major role of Michigan agriculture is to furnish food consumers in the U.S. and abroad and to meet certain aesthetic demands satisfied mostly by plant products. The domestic demand for food will grow rather slowly with the U.S. population, increasing only about 8 percent between 1992 and the year 2000. Consumption of certain foods will expand more or less than 8 percent depending on how per capita consumption changes with income, lifestyles, taste preferences, and concerns about nutrition and health.
Economies of the U.S. and rest of the world have slowed in recent years, and robust growth is not in the picture for the remainder of the 1990s. Real economic growth is projected to be only about 1-1.2 percent per capita per year.
Expect the following changes in U.S. per capita consumption: 1. Poultry and fish will continue to replace beef.
Porkconsumption will be relatively steady. 2. Dairy consumption will hold recent gains. 3. Egg consumption will continue to decline. 4. After a long period of declining consumption, per
apita consumption of cereals has been increasing and
should continue a slow rise. 5. Per capita dry bean consumption will be steady.
6. On potatoes, fresh, frozen and chip consumption will
increase, while other processed products will decline.
7. Steady to higher sugar consumption is possible if sugar prices decline relative to high fructose corn syrup. 8. Slow reduction in consumption of fats and oils is
expected. 9. Strong upward trends are seen in fresh noncitrus fruit
and, to a lesser extent, in all processed fruit. 10.Increases in per capita consumption of fresh vegetables will likely more than offset declines in processed vegetables.
Consumers will continue to change their priorities, but food marketers will have to give attention to a number of growing demands for quality, consistency, convenience, nutrition, freshness, variety, appearance, taste, safety, etc.--along with prices in line with value.
The greatest potential for expanding demand for Michigan farm products is abroad. Between now and the year 2000, population outside the U.S. will increase 14 percent. For every person added to the U.S. population, 36 will be added abroad. However, buying power is the key.
Animal protein consumption is very low in developing countries and even in some developed nations. Grain fed to livestock on a per capita basis is only one-sixth of that in the U.S. Even modest economic growth should propel demands for feed grain and oilseed meal beyond the ability of the rest of the world to respond. That would mean growth for U.S. exports of corn and the soybean complex.
Expansion in wheat exports is also in the picture, although the unsettled situation in Eastern Europe and the former Soviet Union clouds the outlook.
Future demands for products and services of the nursery, turfgrass and floriculture industries are even more dependendent on the business climate. For example, we estimate that for every 1 percent increase or decrease in real consumer income, floricultural expenditures rise or fall by as much as 3 percent. The horse population is similarly connected. The outlook: growth, but at a moderate pace.
Maybe a "sleeper" in the long-term outlook is that the nation may turn to agriculture for energy. Recent experience in Michigan with ethanol has not been very encouraging, but in the long-run we had better take another look. Economics are improving with the prospect that petroleum prices will increase relative to corn. Conversion efficiency is increasing even with cellulosic feedstock Substituting ethanol for petroleum-based products can help clean the air, reduce the "greenhouse effect" and contribute to rural development.
Projections from the National Energy Strategy indicate that major expansion will occur after the turn of the century. By the 2030, bio-fuels could represent 15 percent of oil equivalent used for U.S. transportation. Conversion to bio-fuels should be on our research agenda.
Public Policy in Agriculture
In order for bio-fuels to become a major energy source, it will have to become a matter of public policy. In some ways, the government may become less involved in agriculture. Expect the federal farm program to remain similar to the 1990 Farm Bill. Target prices will remain fixed at current levels. With prospects grain prices will increase, deficiency payments to feed grain and wheat producers will be reduced or phased out. Any new dairy legislation will likely be funded by producers.
New farm legislation will have more extensive environmental titles and the "stick" more than the "carrot" may be applied achieve compliance.
A pervasive "megatrend" is globalization. Regardless of what happens with GATT or the proposed North American Free Trade Agreement, the long-term direction is toward regional common markets if not a world common market. We really have little choice. Michigan and U.S. agricultures have too much at stake to retreat to protectionism. Exports account for approximately one-fourth of cash receipts from farm marketings in Michigan.
The USDA finds the Dunkel compromise proposal on GATT would be positive for most commodities, neutral to sugar and neutral to slightly negative on dairy. The major implications from GATT are not the short-run pluses or minuses which are difficult to measure anyway, but the possible dynamic payoffs. This means that trade liberalization would allow leaders in agriculture, agribusiness and the food system to ply their skills and know-how to capitalize on the opportunities a growing global market will provide.
Government subsidies related to research and extension are not on the negotiating table of GATT. However, the future funding from public sources will not likely allow for needed expansion in programming. While Michigan's AES and CES have fared well relative to other states in this regard, alternative sources of funding will need to be explored. Real (after adjusting for inflation) Federal funding for Michigan CES has been declining.
Environment
Environmental concerns are pervasive in papers written for this project. Following are some illustrative quotations.
"Groundwater contamination has become an issue of increasing concern in Michigan in recent years. The rate of infiltration of water and contaminants into groundwater supplies depends on the characteristics of the overlying materials.... The sandy soils of western Michigan are very permeable and afford little protectiom from surface contamination."
"Improved nitrogen management may be key to reducing nitrate contributions to groundwater in these areas."
"By the year 2000, Atrazine will probably no longer be used on coarse textured soils or if the distance to groundwater is less than 30 feet."
"High phosphorus soil tests indicate that most corn and soybean fields need little or no phosphorus fertilizer."
"Insecticide use has generally been a cost-effective way to manage insect pests. Costs of utilizing this technology are expected to rise significantly because of more stringent government regulations for registration."
"A nationwide priority is to develop biological control pests through the use of parasites, pathogens and predators.
"Bio-control research is showing some promise. Unfortun there are too many diseases and crops."
Authors also gave substantial attention to manure management.
"In the future, agricultural specialists will continue to stress that the rate of manure nutrients applied to a field should exceed the amounts of available plant nutrients recommended crop grown."
"Altering the composition of manure through techniques such as feeding of microbial phytase needs to be researched."
Illustrating the broader agenda for agriculturists in the future, James Lloyd stated:
"All veterinary practitioners will need to seriously consider food safety, animal welfare, waste management and environmental issues."
Management and Information Systems
The coming decade will usher in much expanded and improved information and management systems for decision makers. A high percentage of commercial farmers will have immediate access the-minute market, technical and management information at their farms by electronic media. Computer simulations of their farms tied into price and cost projections will aid them in production decisions.
Forecasts of weather, plant disease and pest outbreaks will be improved and available for localized areas.
Rural Commodities
Rural Michigan counties are very diverse and are becoming more so. Most rural counties are sparsely populated which present challenges in providing public services efficiently. Other counties are experiencing increases in nonfarm employment--overrall population in rural counties has increased in the past decade while population in metropolitan counties edged lower. Important to a viable agriculture in many counties is the quantity and equal services available. Key to future development will be multi-community cooperation and partnership.
Michigan's Competitive Position
Preceding has been a commentary on the general environment for Michigan agriculture in the coming decade--as well as to U.S agriculture as a whole. How will Michigan fare in this environment? What is Michigan's competitive position?
Most of Michigan's agriculture and food industry is near large metropolitan areas and nonfarm employment opportunities. Not only are markets close at hand, but Michigan is favorably located in the North American market. Just under half of the total population of the U.S. and Canada is within 500 miles--a reasonable one day's drive.
Not only are transportation costs less, but also the urban interface provides certain unique opportunities for extensive direct marketing. Also, with industry close at hand, farm families have the flexibility of earning off- farm income--an option not available to farm families in places like western Iowa.
Of course, the close interface of agriculture and the nonfarm population also presents some handicaps. For instance, animal waste and odor issues are more sensitive in Michigan than in many agricultural states.
Although close to domestic markets, Michigan has not fared well in international trade. Growth in export markets has strengthened prices along the river markets-- that is, the Ohio, Mississip and Missouri Rivers. The St. Lawrence Seaway has never reached potential.
Also, in spite of the large cereal and baby food industries, Michigan is deficient in food processing. Practically all our soybeans are shipped out for crushing (and soy meal shipped in). Nearly all of Michigan's dry beans are processed outside the state. Most of our fed cattle are slaughtered elsewhere. Lack of processing tends to hold prices down relative to other states.
A key indicator of how well Michigan agriculture is doing vis-a-vis other states, is the trend in Michigan's share of U.S output. Table 1 indicates how Michigan fared on major products from 1960 to 1976 and from 1976 to 1990. The ranking is from sugarbeets, increased nearly four- tenths of a percent a year in share, to eggs, which barely outpaced the U.S. expansion, and on down to dry beans, which lost over a percentage point per year in its share of output.
Overall, the performance of Michigan agriculture in the past decade and a half is commendable. Of particular interest is the number of products which turned around in this period. Production of oats, turkeys, hay, peaches, hogs, cattle on feed, wheat, fall potatoes and eggs all were losing out relative to other states 1960 to 1976, but gained from 1976 to 1990.
Table 2 shows the products which have increased in absolute terms since 1976--from turkeys which increased 11.5 percent to eggs which gained .3 percent per year, and down to beef cows declined an average of 3.7 percent annually. Nursery and floriculture were measured by cash receipts in constant dollar terms. In this table, also, you can note the instances in which declines in 1960 to 1976 were reversed in the past 15 years.
Michigan agriculture's performance in recent years indicates some basic strengths and also suggests that leadership can play a major role in the fate of an industry.
The diversity of Michigan agriculture is illustrated in Table 3. In 1990, 12 different product groups generated over $100 million in cash sales. Dairy product sales were by far the most important at 23 percent of the total. Although corn represented only about 12 percent sales, its importance is much greater because as much as 40 percent of the crop is fed on the farms where it is produced diversity adds to the stability of Michigan agriculture as compared to most other states where four to five commodities may be predominant. This broad base also represents challenges to the infrastructure, such as Michigan State University, in adequately serving such a varied clientele.
Projections of Commodity Production
The authors of the commodity papers in "Status and Potential of Michigan Agriculture" were asked to be as specific as possible projecting their industries to the year 2000. They were provided projections from "AGMOD" and "MIAGMOD," econometric models of U.S. and Michigan agricultures. However, the econometric project were to serve as only guidelines. The authors, along with those reviewing their papers, were responsible for generating their own forecasts. The econometric projections were adjusted to the commodity committee's point forecasts for the year 2000.
The results of this analysis are presented in Figures 1-14 on selected field crops and livestock. Trends in cash receipts on fruit, vegetables, nursery and floriculture are shown in Fig 15-18. For the latter products, the general directions of future changes were indicated, but specific projections were not established.
The essence of the projections in output is as follows:
-(Figures do not transfer into the database please refer to original document for complete graphic)
Dairy (Figure 1) Milk cow numbers will continue to trend downward, but will be more than offset by increased production per cow.
The rate decline will level off from the rate of the 1980s.
Beef (Figures 2 and 3) Beef cow numbers have been declining since the mid-1970s, but are expected to vary cyclically around current levels. The number of cattle on feed is projected to continue to expand.
Hogs (Figure 4)The expansion underrway since the mid-1970s is likely to continue.
Sheep and Lambs (Figure 5) After declining for several years, sheep and lamb numbers leveled off in the 1980s and are expected to expand modestly.
Turkeys (Figure 6) A strong growth industry, turkey production could continue to accelerate in the 1990s.
Eggs (Figure 7) Egg production is projected to be stable to higher for the balance of the decade.
Corn (Figure 8) Corn production should increase modestly, with acreage relatively stable.
Hay (Figure 9) Production of hay and forages is expected to remain fairly stable.
Soybeans (Figure 10) A modest expansion in production is anticipated.
Wheat (Figure 11) Wheat production should hold near the top of the range past decade.
Dry Beans (Figure 12) The attrition in dry bean production should end, and even expansion is possible.
Sugarbeets (Figure 13) Sugarbeet production will remain near the record levels of the recent past.
Potatoes (Figure 14) Production of summer and fall potatoes will remain fairly steady.
Fruit (Figure 15) Production of apples, blueberries and grapes will increase; peach, strawberry and bramble production is expected to remain about the same; cherry production is slated to decline.
Vegetables (Figure 16) Acreage and production are not likely to change significantly.
Nursery (Figure 17) The market is expanding; competitiveness will depend on consorted efforts of the Michigan legislature and research a education institutions.
Floriculture (Figure 18) At $125 million in 1990, the industry could be worth $2 million by the year 2000.
Table 1. Linear Shifts in the Share of Michigan Crop and Livestock Production Compared to the U.S. Ranked by Changes From 1976 to 1990
1960 to 1976 1976 to 1990
Annual Annual
Change Change
Commodity in Percent Significance in Percent Significance
Sugarbeets +.022 +.83 +.369 +11.95 Cherries, tart +.643 +1.86 +.342 +.85 Potatoes,summer +.335 +6.83 +.266 +4.64 Oats -.020 -.71 +.110 +3.33 Turkeys -.044 -6.96 +.100 +13.44 Hay -.029 -2.93 +.095 +8.26 Peaches -.164 -3.41 +.093 +1.66 Hogs -.007 -1.18 +.084 +12.95 Soybeans +.006 +.85 +.080 +9.73 Cattle on feedb -.011 -2.35 +.077 +6.57 Wheat -.111 -6.67 +.023 +1.20 Corn for grain +.047 +2.76 +.015 +.75 Potatoes, fall -.060 -3.95 +.012 +.68 Eggs -.004 -.80 +.003 +.51 Beef cows +.007 +3.93 -.007 -3.70 Sheep and lambs -.011 -3.61 -.008 -2.31 Grapes -.041 -2.30 -.015 -.72 Milk -.030 -5.02 -.016 -2.31 Apples -.101 -1.54 -.040 -.52 Vegetables -.012 -1.44 -.051 -4.66 Nursery and floriculture -.001 -.05 -.051 -3.92 Strawberries -.263 -10.59 -.192 -6.60 Blueberries +.679 +2.82 -.251 -.90 Cherries, sweet -.009 -.04 -.256 -1.06 Dry beans -.474 -2.95 -1.369 -7.30
a Significance is indicated by a statistical term, "t values." Absolute values of two or greater are significant at the 95 percent confidence level. b Trends are calculated from 1960 to 1982 and from 1982 to 1991 c Based on cash receipts.
Table 2. Annual Percent Changes in Production of Crops and Livestock in Michigan, Ranked by Percent Changes in 1976 to 1990
1960 to 1976 1976 to 1990
Annual Change Annual Change
Commodity in Percent in Percent
Turkeys -.42 +11.46 Soybeans +7.34 +6.22 Hogs -.44 +5.56 Cattle on Feed(a +.10 +5.51 Blueberries +2.62 +5.24 Nursery products(b NA +5.00 Hay -.23 +4.01 Sugarbeets +2.50 +3.73 Peaches -.07 +3.24 Potatoes, summer +1.91 +2.83 Wheat -1.62 +2.25 Apples +.93 +2.02 Cherries, tart -1.65 +2.02 Grapes -1.61 +1.98 Corn for grain +5.60 +1.69 Floricultural products(b NA +1.68 Milk -1.07 +1.41 Potatoes, fall +1.18 +1.18 Eggs +.19 +.26 Cherries, sweet +3.78 -.45 Oats -3.91 -1.95 Vegetables(b +1.88 -2.61 Sheep and lambs -6.91 -2.61 Strawberries -3.84 -2.98 Dry beans -.86 -3.45 Beef cows +4.47 -3.70
a Trend from 1960 to 1982 and from 1982 to 1991. b Based on real cash receipts.
Table 3. Source of Farm Income in Michigan, 1990 a
Percent of Total
Cash Receipts
Amount From Farm
Item Mil. $ Marketings
Cash Income
Farm Marketings
Cattle and calves 266 8.4
Hogs 250 7.8
Dairy products 729 22.9
Chicken eggs 68 2.1
Turkeys 51 1.6
Other livestock 34 1.1
Wheat 103 3.2
Corn 369 11.6
Other feed grain 14 .4
Hay 84 2.6
Soybeans 234 7.4
Sugarbeets 137 4.3
Dry beans 117 3.7
Potatoes 82 2.6
Vegetables 170 5.3
Fruit 178 5.6
Floriculture 124 3.9
Ornamentals 140 4.4
Other crops 33 1.0
Total 3183 100.0
Government payments 169
Other farm income 180
Total 3532
Cash Expenses 2212
Net Cash Income 1321
a U.S. Department of Agriculture, Economic Research
S State Financial Summary, 1990, Economic Indicators of the Fa Sector, EFCIFS-102, December 1991.
Following are summaries of the "Phase II" papers which the status and outlook for major Michigan agricultural commodities.
Dairy*
Charles J. Sniffen Department of Animal Science Larry G. Hamm Department of Agricultural Economics
Michigan's dairy industry generates farm receipts of 700-800 dollars per year or nearly 25 percent of Michigan's total agricultural income. On a retail basis, Michigan's dairy industry generates approximately 1.25 billion dollars. Milk processing capacity in Michigan has expanded such that additional processing capacity is available currently to support a minimum 10 percent increase in milk production with corresponding increases in farm and retail receipts. Michigan ranks 7th in the nation for total production, but of the top 10 dairy states only California and Washington outrank our DHIA production per cow. Michigan's highly productive dairy industry utilizes approximately 2 million of Michigan's 6 million acres of corn, alfalfa, soybeans, oats and other crops. Michigan's dairy farms support a significant number of service industries throughout the state and thereby provide year-round stability for many rural communities.
The trend of increasing volume of milk being produced by fewer farms will continue. However, smaller single family dairy operations not disappear. Farms shipping under 1,000,000 pounds will still make up a quarter to one-third of all farms. The dichotomy between large and small dairy farms will increase. We will see a few more 500 to 1,000 cow dairies in the future. In Michigan, however, the bulk of the dairies will be between 150 and 400 cows. For the most part, all Michigan dairy farms will continue to be managed by farm families. These operations generally hire off-farm labor for dairy and crop work. Operators will concentrate more on specific management elements of dairying. Farm record analysis, nutrition balancing herd health monitoring, genetic planning, etc., will consume increasing amounts of operator time. New technology will significantly increase levels of production and management.
After decades of decline, per capita consumption of dairy products started increasing in 1983 and has continued to increase. Most of the growth has come from increased cheese consumption. As a result there has been a major increase in cheese processing in Michigan with the addition of two state-of-the-art cheese plants. In addition several European and Michigan-based cheese makers have estabablished small to moderate sized plants in Michigan during the 1980s.
Although consumer preferences for specific milk components or products may shift, overall milk consumption will continue to grow. Biotechnology and genetic engineering may alter milk component production. Cholesterol reducing/eliminating food technolog become commercially feasible.
The 1985 and 1990 farm legislation eliminated the price support program as a market stabilizing/income enhancing policy initiative. If the current negotiations of the General Agreement on Tariffs and Trade (GATT) eliminate Section 22 dairy import protection, the U.S. price support program cannot continue in its present form. The 1990's will see the market deregulation attack on dairy (and all farm) programs continue. As a result, the Michigan and U.S. dairy industry may revert back to using cooperative-based, self-help programs reinvigorated state legislative strategies.
Growth of the dairy industry in other states is being restricted due to environmental and economical reasons. Michigan has a number of advantages over other states that provide the basis for growth other as other states reduce their cows numbers or reach their growth limit due to environmental constraints. These advantages include: (1)modern, efficient milk processing plants, (2) relatively low feed costs, (3) larger herd size and labor efficient systems, (4) herds with superior genetic potential, (5) lower dairy cow concentrations than other major dairy states, (6) climate and soils conducive to high milk production and quality crop production, (7) plentiful water, (8) processing firms are interested in Michigan, (9)20-25 percent of producers plan to make improvements, and (10) approximately 85 percent of milk is marketed through produce cooperatives.
The primary goal for the dairy sector of the animal industries is to foster a competitive industry with an ability to adjust to changing policies and thereby gain an increasing share of the U.S. dairy industry. In the process of meeting this goal, two issues that will affect the rural community and need to be addressed by the Michigan animal industry are: (1) sustaining long-term financial viability of producers, agribusiness and communities in Michigan; and (2) addressing concerns related to environment, animal care and food safety. Simply said, successful dairy operations must be profitable, provide for good animal care, be environmentally sound and produce safe wholesome food.
To achieve the industry goal while addressing the two issues specific objectives have been established:
(1) To develop, adopt and integrate new cost effectiv technology into dairy production management systems, and to overall management skills at a faster rate than other states.
(2) To develop superior and efficient dairy management systems for adoption by dairy operators who are modifying or expanding operations.
Manure management will be a critical issue shaping the dairy industry in Michigan. The issue will affect legislation on land use, will impact the location of the industry, and will affect the size of the needs and the size of the farms on which the herds are located, the facilities to be designed and the forage types used. The states that successfully deal with this issue will be the most competitive in the future.
The dairy industry will continue to be the largest component of the agricultural industry in Michigan. Dairying in Michigan has tremendous potential and should increase in size because of its competitive edge, infrastructure and the constraints that other major dairy states are experiencing. The market opportunities for products are here. The land and water resources are tremendous and producers and processors/marketers are forward looking. The cost of feed will continue to be competitive relative to other regions in the country.
Beef Harlan Ritchie and Steve Rust Department of Animal Science J. Roy Black Department of Agricultural Economics
There are 120,000 commercial beef cows owned by about 6,000 producers in the state. Average herd size is approximately 27 cows, w range of 1 to 300 cows. While numbers are expected to stabilize in the coming decade, resources are available for the herd to expand to a level of about 175,000 by the year 2000. Such an increase would be fueled by interest in improved utilization of the state's 1,000,000 acres of pasture as well as its abundance of harvested forages. New technology from New Zealand and Australia will enable producers to economically fence under-utilized pasture acres and stock them with beef cattle. This technology will also enable producers to effectively increase their stocking rates and consequently increase pounds of beef produced per acre.
Given the vast forage base in Michigan (pasture, hay and silage),it is likely there will be an increase in backgrounding (stocker) programs. By the year 2000, there could be an increase of 50,000 head of stocker cattle fed annually in the state. These cattle will be purchased as calves or short yearlings and grown (not fat for a period of four to nine months on pasture and/or harvested forage. They will then be sold at weights of 750 to 850 pounds to Michigan feedlots where they will be fed for four to five months and finished for slaughter at weights of 1,100 to 1,300 pounds.
Michigan's feedlot industry consists of approximately 800 cattle feeders who market about 300,000 head of finished cattle annually. Historically about 20 percent of these cattle have been sold into Canadian market. However, the number of Canadian packers has declined rapidly in recent years, so this market is not as viable as it once was. Nevertheless, the larger packers in the Eastern U.S. well as IBP in Illinois and other Midwest packers continue to provide a healthy market for Michigan fed cattle.
It is projected that Michigan will continue to rank among the three cattle feeding states east of the Mississippi. Since 1985,state has improved its national rank from 16th to 11th. It is predicted that Michigan will increase its share by the year 2000, when 400 cattle feeders will market 400,000 fed cattle and rank 10th in the nation.
Strength in cattle feeding in Michigan can be attributed to:
1. Decline in the number of farms with dairy cattle. dairy farmers tend to shift to beef.
2. Financing program of the Michigan Livestock Exchan
3. Structure of cattle feeding. Michigan has a large proportion of feedlots over 1,000 head than in other Corn Be states.
4. Shifts in geographic patterns on feed grain prices depressed Michigan corn prices relative to states along the Missouri and Mississippi Rivers.
Hogs
Gerald Schwab Department of Agricultural Economics Maynard Hogberg Department of Animal Science
The swine industry is changing rapidly. The number of farms with hogs in both the United States and Michigan declined rapidly during the 1980s. However, in terms of hog numbers produced, Michigan's swine production industry has actually grown in absolute number of hogs produced and in its relative share of hog production in the United States.
Farm size continues to increase with an increased concentration of hog numbers on fewer numbers of hog farms. For 1991, 8.5 percent Michigan's 5,000 swine farms had 72.5 percent of the hogs on hand. This increased concentration of hogs on fewer hog farms is occuring throughout the United States. Michigan's swine production sector appears to have adjusted relatively rapidly as Michigan is ranked ninth in the nation in terms of the number of hogs marketed large-scale farms defined as farms that sell more than 5,000 head per year.
The swine data and discussion presented above are historical in nature. What of the future? Issues that will influence the size annd structure of the hog industry in Michigan include the size of the U.S. swine industry as determined by consumer demand for pork products, Michigan's political environment, Michigan's natural environment, profitability of swine relative to other enterprises comparative advantage of Michigan swine producers relative to other geographic areas, and availability of finances, of risk-bearing ownership, and of skilled labor and management.
The authors project that Michigan can maintain and slightly increase its share of hog production in the United States. It is projected that by the year 2000, 2.4 million hogs can be produced annually in Michigan as compared to the current pig crop of approximately 2 million per year. These hogs will be produced on 2,000 commercial hog farms. Higher concentration of ownership of hogs will continue. Ownership and control of these hogs is expected to remain with the independent family- farm unit. Swine producers who do not have the desire or wherewithal to produce a uniform high-lean quality hogs whose price-cost relationships are not competitive will exit the swine production industry.
* Contributing authors: Ted Ferris, Roger Mellenberger, VandeHaar, Allen Tucker Ivan Mao, Jim Ireland, Bob Cook, And Skidmore, John Partridge, Zeynep Ustunol, Bill Bickert, Paul Coussens, Roy Emery, Roy Fogwell, Jim Lloyd.
Sheep and Lambs Margaret E. Benson Department of Animal Science
Sheep enterprises most frequently exist in association with agricultural enterprises such as livestock and crops. The primary role of the ewe flock or lamb feeding operation is to provide additional income while utilizing existing facilities and land more efficiently. Michigan has in excess of 1 million acres of pastureland. Sustainable forage based production systems, of which sheep can play an integral role and utilize previously underutilized land while conserving energy, preventing soil erosion, and conserving water quality, will increase. Sheep are adaptable to either intensive or extensive forage based systems both of which currently produce sheep and lambs in Michigan. New knowledge and technologies that allow producers to take advantage of Michigan's resources in a cost-effective way will facilitate expansion in the future. Implementing cost effective animal production and management practices, along with the application of new fencing practices grazing management, plant species management and selection, will be key in economical sheep production in the future.
Michigan has traditionally been a leader in the production of seedstock with a number of nationally recognized purebred producers in several different breeds. Purebred production represents approximately 40-45 percent of the total sheep and lamb numbers. Downsizing of the purebred industry has occurred in state as nationally over the last 10 years. This trend is expected to continue slowly through the year 2000.
The commercial sheep industry represents 55-60 percent of the sheep and lambs in Michigan. The commercial industry is itself diverse in that the average flock size is 35 head, while flocks range in size from less than 10 to more than 500 ewes. Economics will be primary factor in determining the extent to which the commercial sheep industry can and will expand.
Lamb feeding has benefited from several advantages which appear to be responsible for recent expansion. These advantages include: availability of lambs at economical prices; (2) in-state processing facilities; (3) abundance of feed grains and relatively low costs; and (4) favorably located near areas of high lamb consumption (Great Lakes, East Coast). These advantages appear to hold for future expansion as well.
Michigan has the advantage over many farm flock states in that it is home to a sizeable slaughter industry which slaughtered a total of 291,000 lambs in 1990. These statistics indicate that Michigan's slaughter capacity far exceeds current production. If all of Michigan's lambs were slaughtered in-state, this would represent only 28 percent of the state's slaughter capacity.
Expansion potential in lamb feeding looks favorably through the year 2000. The extent to which the expansion will occur will depend on cost and availability of feeder lambs in-state and out, feed and market stability. Northern Michigan may become a larger of feeder lambs for southern Michigan feedlots. This will f and promote expansion of both ewe flock and lamb feeding sectors of the industry.
National efforts currently underway to implement a price discovery and recording system in the lamb industry will be adopted. Lamb will be marketed on a yield grading system in the future with emphasis on lean lamb. Niches within the market will remain important to ethnic and hotel-restaurant-institution demands.
Poultry Allan P. Rahn Departments of Animal Science and Agricultural Economics
The importance of the poultry industry in providing meat and egg protein products for U.S. and Michigan consumers continues to increase. A brief assessment overview of anticipated opportunities challenges and likely evolutionary developments was presented for:
(1) stock improvements; (2) nutrition and growth promotants; health maintenance and disease treatment; (4) waste handling and disposal; (5) information systems; (6) product enhancements food safety; and(8) agriculture and poultry husbandry ecology.
Given that Michigan poultry industry firms have access to relatively inexpensive primary raw material inputs and good proximity to relatively affluent final goods, consumers, and the two dominant firm location consideration factors, anticipations of future grow these industries are warranted. These growth anticipations, however, are predicated on a business climate that is compatible with economic viability within our capitalistic system. It is imperative that both the absolute and relative business climate impacts of public imposed behavior and business activity limitations be carefully balanced.
The Michigan egg industry is likely to undergo further organizational changes as the inexorable pressures for increased economic efficiencies in business environments continue unabated. These pressures are characterized by rapidly changing husbandry and information management technologies, and consumer desires for new form, improved quality and more convenient products. Several firms in the Michigan egg industry, however, are positioned to thrive in this highly competitive environment. Their growth is expected to increase the number of layers located in Michigan from its 1991 inventory level of 5.4 million hens and pullets of laying age to 6.0 million--an 11 percent increase--and the number of eggs produced from 1.38 billion to 1.62 billion--a 17 percent increase--by the year 2000.
Much faster growth in the Michigan turkey industry is anticipated because of the enviable consumer demand that current, emerging and future innovations in turkey meat related products are expected to enjoy and processing capacities that are not currently being fully utilized. It is anticipated that the number of turkeys raised in Michigan will increase from its 1991 level of 4.7 million turkeys raised to 12 million--a 155 percent increase--and that liveweight production will increase from 136.3 million pounds to 372.0 million pounds--a 173 percent increase--by the year 2000.
Michigan has not been able to attract entrepreneur(s) with resources adequate to mount the relatively high entry barriers inherent in an economically viable broiler production complex. Further growth and the anticipated increasing importance of young chicken meat in the product mix of the livestock/poultry sector, however, suggest that opportunities to nurture economically sound growth of this industry in Michigan should be under continual scrutiny.
Horses John Shelle Department of Animal Science
Substantial increases in horses used for work and flat racing observed between 1984 and 1991. However, there appears to b relatively comparable decline in most of the major use categories with the number of horses used for pleasure suffering the largest reduction. Although direct comparisons are not possible, the apparent decline in pony numbers, which has been relatively constant since 1971, and the decline in pleasure horse numbers seem to be supported by observations by industry personnel. The total number of horses in Michigan was 130,000 in 1991.
The decline in pleasure horse numbers might best be explained by the Michigan economy over this same time period. As disposable reduced, people begin to limit their entertainment activities Owning pleasure horses does not differ appreciably from similar activities such as snowmobiling, skiing or boating. These types of activities, like pleasure horse activities, are important for psychological and economic well-being of the people of Michigan.
Total expenditures by equine owners topped one-quarter billion dollars in 1990. This represents a substantial contribution to the Michigan economy. These monies represent jobs and purchases involve a large number of persons not directly involved in the equine industry.
The Michigan equine industry has remained strong despite the economic difficulties Michigan has experienced over the last decade. It is time to stop looking at the Michigan equine industry a economic barometer and instead turn to it as an economic stimulant. The opportunities for growth in equine related enterprises is enormous and should be fostered by state agencies.
Horse racing's payoff to Michigan is far greater than the dollars wagered at racetracks. Horse racing means tax dollars; horse racing means jobs; horse racing means investments; and horse racing stability and increasing prosperity for our state's farms. Pari-mutuel horse racing produced over $21 million in direct revenue the state of Michigan in 1990.
Even though the number of days raced and the total wagering between 1980 and 1990, the state revenues decreased by 26 percent. This is a negative trend because the state has less dollars to distribute directly or indirectly back into the racing indus more money is not invested into the racing industry in the form of purses, sire stakes and breeder's awards, there could be a significant decline in numbers of racehorses in the future.
Fur Bearing Animals Richard J. Aulerich Department of Animal Science
Fur farming has always been a cyclical and risky business in by general economic conditions and the whims of the fashion Pelt supplies and consumer demands play an important role in price structure and stability of the luxury fur market.
The domination of foreign countries in the production of luxury furs, such as mink and fox, has created a greater emphasis on global marketing of fur pelts in recent years. With the expanding world economy (especially in the lesser developed countries), a more affluent and fashion-conscious population should increase the demand for luxury furs. To compete successfully in the world marke American fur farmers and fur marketing associations must continue to cater to the desires of the more sophisticated and quality-conscious consumers.
Michigan should retain its position as a major fur producer. a favorable climate for producing high quality fur and abundant supplies of animal and cereal by- products that can be used for feeding mink, fox and other fur bearers. The trend toward fewer but larger fur farms will undoubtedly continue with local zoning regulations and environmental concerns determining where fut farms will be located.
New technologies and research advances should have a positive impact on the economics of fur production. In the future, there will be greater use of commercially manufactured pelleted feed by mink fox producers. Electronic record keeping for monitoring animal performance and production costs will increase. Computerized breeder selection should enhance herd reproductive performance and fur quality. New technologies will be implemented for grading fur processing pelts. There will be greater emphasis on environmentally-controlled housing to facilitate reproduction and fur priming Artificial insemination techniques will be developed for mink.
There will be a greater emphasis on animal welfare and efforts to educate the public about the humane care and treatment provided for fur bearing animals, as well as the appeal and desirability of wearing furs--a renewable resource.
Aquaculture
Charles J. Chopak and Joyce R. Newman Department of Fisheries and Wildlife
Aquaculture, the controlled cultivation of aquatic animals and plants, began in China around 2000 B.C. In the United States, aquaculture began in the 1800s, primarily to supplement wild stocks of recreational fish.
The importance of aquaculture to the national economy has steadily risen over the last 15 years. This has mainly been a result of increased acreage, changing consumer tastes and preferences, a decrease in the commercial catch, and an increase in the trade deficit for fish and seafood products. Michigan ranks fourth in the nation in terms of the number of trout culture operations and seventh in terms of total trout sales.
Michigan aquaculture businesses can be characterized as small spatially dispersed and very diverse. In 1990, there were 117 licensed fish growers in the state, located in 54 of the 83 counties. The major production enterprises are food fish, fee-fishing fish (planting stock). Fish are raised in both raceways and earthen water from springs, artesian wells, pump wells streams. The main purchased inputs are feed, eggs, fingerlings labor, with feed accounting for approximately 50 percent of the variable costs. While growers with fee-fishing and game fish enterprises sell directly to consumers, food fish producers market either to wholesalers (larger growers) or to restaurants and retailers (small to medium growers).
Many factors limit the development of aquaculture in Michigan notably regulatory complexity, a lack of state recognition and support, a lack of technical information and extension materials little understanding of the marketing system. It is recommended that efforts should focus on developing an aquaculture plan, an aquaculture coordinator position, statewide regulatory coordination research, industry promotion and market coordination.
Without these changes in information flow and institutional arrangements, industry structure and performance will be relatively unchanged by the year 2000. However, with such changes there is potential for industry growth--both in terms of the entry of new firms and the expansion of current operations.
Corn
D.D. Harpstead Department of Crop and Soil Sciences
Corn for grain and silage will remain the leading crop in Michigan's agriculture, both in terms of area cultivated and cash value. Since 1986, Michigan farmers have planted approximately 2.4 million acres each year of which 13 percent was cut for silage. There is little justification to predict that major changes will occur in the acreage dedicated to corn.
The history of corn production in Michigan over the last three decades is an outstanding success story. The successes in the improvement of the corn plant per se have been complemented by improvements in soil fertility and nutrient availability, we control and crop protection, and in production cost reductios through mechanization and management technologies.
A number of factors are already influencing corn production continue to do so in the future. The utilization of earlier maturing, higher yielding hybrids is having a significant impact on corn production and management. Early maturing hybrids, especially when combined with early planting, make possible a series of whole farm management options. Nitrogen fertilization also remain factor in management systems. Its efficient use is being enhanced through the careful monitoring of available soil nitrogen combined with the timely application of supplemental nitrogen.
By the year 2000, corn production can expect to benefit from increased tolerance or resistance to disease and insect pest as tolerance to selected herbicides imparted to hybrids through conventional breeding systems and through the possible application biotechnology. These genetic factors used in connection with the aggressive application of the principles of integrated pest management will significantly reduce production costs and decrease the concerns for inappropriate pesticide usage.
Soybeans M.L. Vitosh Department of Crop and Soil Sciences
In 1990, Michigan farmers produced a record yield of 38 bush acre on 1.15 million acres with a value of $249 million. Based on value of product, soybean are the third leading crop. Michigan's acreage continues to increase and now ranks 11th among all states. Saginaw, Lenawee and Monroe are the top soybean producing counties followed by Shiawassee, Gratiot and Clinton Counties. There has been a gradual shift in the soybean production from southeast Michigan the central region of Michigan.
Soybeans are a crop of worldwide interest. Europe and Asia great demand for soy protein and soy oil. If the GATT (Gene Agreement on Tariffs and Trade) and North American Free Trade Agreements are successful, the U.S., including Michigan, could see an increase in foreign exports.
Soybeans are a low resource input crop that have wide adaptation in the southern half of Michigan. Economically, they compete very well with other field crops. Agronomically, they fit well into all field crop rotations and help to minimize weed, disease and insect of the other crops.
Soybean acreage and yields should continue to increase over the next decade. This can be accomplished with little or no increase in resource inputs. New varieties and improved management practices such as a continued shift to narrow row production will be the major factor for increase in yields. Soybean yields have been increased at a rate of about 0.5-0.8 bushels per acre per year over the last 10 years. Using this trend, Michigan's average yield by the year should be approximately 42-46 bushels per acre.
There is great potential for expanding further the use of so food and industrial products which could improve the profitability of soybeans. This includes finding new uses for presently grow soybean varieties and developing new varieties that have altered levels important components. These changes to soybeans could be done both traditional breeding and also new biotechnology processes.
The impact of government programs, state and federal environmental regulations and GATT and North American Free Trade Agreement soybean production is uncertain. Any significant change in areas may significantly affect Michigan's acreage and yields
Currently, most soybeans grown in Michigan are relatively free of disease and insect problems. White mold, soybean cyst nematode phytophthora root rot and spider mite, however, can be yield limiting factors in any one year or on any one farm. Very little information is available on Michigan-grown varieties with regards to their susceptibility to host pathogens. These areas need to be more adequately addressed in the future. Other areas that need attention include the development of herbicide tolerant and cold tolerant varieties. Michigan needs new varieties that yield well under cool climatic conditions.
The dissemination of research and testing information by the Cooperative Extension Service also needs attention. This is particularly true in light of declining Extension budgets.
Hay and Forages Richard Leep and Waldemar Moline Department of Crop and Soil Sciences
- Hay was Michigan's second leading crop in value of production in 1990 at $339,875,000, second to corn with a 1990 value of production of $526,091,000.
- Alfalfa in pure stands and in mixtures accounts for 90 percent of hay acreage in Michigan, according to the Michigan Agricultural Statistics.
- There is a trend toward managing forage crops to increase both yield and quality.
- In an effort to reduce labor, there is a trend toward less use of small bale packages and more silage and large bales.
- There will be a trend toward utilization of more bunker silos and less upright silos for hay storage in dairy systems to reduce storage costs.
- Intensive grazing of pastures has taken on new interest by producers of all classes of livestock in the state and nation.
- Intensive grazing may be a key component in lowering milk production costs by Michigan dairy farmers.
- Simulation models of hay and silage production are being developed to improve the sustainability of dairy farms.
- There is a vast array of research activities being conducted on hay and silage in the 1990s to address pertinent issues including plant breeding, species evaluations, species mixtures, integrated pest management, alternative insect control strategies, crop modeling, harvesting systems including grazing methods, methods of determining quality, and utilizing animal waste on forages.
- Hay and silage acreage will decline slightly by the year 2000 as production correlates with the growth of the dairy and livestock industry and its demand for forages.
- Hay and forages will continue to be the cornerstone of a growing, stable animal agriculture in the state.
- Hay and silage production will become more specialized as forage production becomes separated from the animal production systems on farms.
- Plant breeding will lead to major advances in alfalfa production by the year 2000.
- Hay and forage production and growth will be directly correlated with the growth of the dairy and livestock industry and its demand for forages.
Wheat R. Ward Department of Crop and Soil Sciences P. Ng Department of Food Science and Human Nutrition
Wheat acreage will grow moderately with the current balance between red and white wheat shifting slightly towards red wheat. Soft winter wheat will continue as the predominant market class. The price of wheat will move upwards during the next decade, but not dramtically Conventional plant breeding efforts will bring a continuous stream of new varieties into Michigan. Continued genetic gains will be manifest in both yield potential and yield stability, through both improved pest resistance and general adaptation and physiological efficiency. Wheat's natural genetic variation will allow continued improvements in grain yield and in development of more durable resistances to powdery mildew, leaf rust, and WSSV. Superior processing quality will continue to be a hallmark of Michigan wheat varieties.
Utilization of different products extracted from mills will be increased. The food industry will increase the variety of soft wheat products, particularly those targeted to different ethnic groups the health conscious sector in our society. Higher quality products will be expected by more knowledgeable consumers.
Parameters of soft wheat quality are not as clearly defined as for bread and pasta wheats. Precise methodologies to quantify the quality of soft wheat for milling and baking performance need to be determined.
Rapid analyses will be developed to assess the quality of new varieties and commercial lots of soft wheat. New processing techniques will be introduced to utilize partially sprouted wheat various food products. New products will be developed from oa variety of flour constituents.
The flour constituents (their relative amounts, molecular structure, and properties) that control or contribute to the functional properties during processing will be identified. Modification of processing (e.g., milling, dough mixing, baking, etc.) in order to maximize the yield and quality of the end product will be developed. Certain flour constituents will be explored for use in the food industry (starch and vital gluten) as well as for other industrial uses (starch for glue, protein for biodegradable polymers). directions will be the keys to a competitive edge in national and international markets that will lead Michigan's wheat industry the 21st century.
Biotechnologies for the direct insertion of new genes (transformation) into wheat are nearing the application phase of development. The next limiting factor will be the availability of novel, performance-enhancing genes for transformation.
Seed dormancy research will lead to increased dormancy of white and red wheat varieties. Molecular studies of the events during maturation, dormancy and germination will eventually enable biotechnology mediated elimination of sprouting as a problem.
Pressures to reduce soil erosion, groundwater contamination general pesticide use will dictate changes in the management of wheat in Michigan.
The Seed Certification system should continue to play a significant role in ensuring the purity and identity of wheat seed, but serious challenges could arise from private seed companies which choose to certify their varieties. Hybrid wheat remains a tantalizing possibility.
Oats and Barley Russ Freed Department of Crop and Soil Sciences
Oats
Production trends for oats in Michigan are downward. In 1960 the state harvested 36 million bushels. During the 1980s, production varied from 28 million in 1982 to 6 million in 1988. The major reason for this downward trend has been the importation of large quantities from European sources. In 1991 the U.S. imported 70 million bushels from Sweden and Finland where farmers receiv subsidized price of over $5 per bushel.
No major changes in the demand for oats can be predicted.
Animal feed and human food demands will not change significantly. The advent of new varieties and varieties with specific market demand characteristics will serve to maintain or increase oat yield levels or to target specific market niches.
Production technology will continue to focus on systems whic fewer purchased inputs. Other changes in production technol focus upon very early spring planting to take advantage of t portion of the growing season most favorable for oats. Barl dwarf and crown rust are two important diseases in Michigan. of these diseases is with resistant varieties.
Barley
Since the Stroh Brewery in Detroit ceased their malting operations malting barley purchased in Michigan has been shipped to Chicago, Buffalo, or other points for processing. With a widespread glut in the barley market, Michigan barley has not been competitive. Barley produced under our more humid growing conditions is not conducive to the production of "bright," the barley characteristic of dryer regions. "Brightness" is a trait sought after by the maltin industry.
Barley is an excellent feed crop and can be effectively substituted for corn in rations for beef and dairy cattle. It can be harvested and ensiled as a high- moisture feed or when ground used in mixed feed concentrates. Barley can be grown in shorter season, lower temperature regions which makes it an ideal substitute for corn in northern latitudes.
With the present cash grain demand levels, there is little reason to predict the reemergence of barley as a major crop in Michigan. It can be grown successfully in the state and will continue to serve a variety of local purposes.
Dry Beans J.D. Kelly Department of Crop and Soil Sciences
The Michigan navy bean, once acclaimed as the "white gold of Saginaw Valley," has seen a dramatic decline over the last 30 years. Michigan producers who previously dominated this class with 98 percent of all North American production in the 1960s produced only 58 percent of the same crop in the 1990s.
The major causes for the dramatic decline have been competition from other crops, competition from other states and countries, an declining demand for the navy bean commodity in North America. One recognizes that the Michigan dry bean industry is not just navy beans, but this market class dominates all other seed types 80 percent of current dry bean production within the state. To reverse this trend, the Michigan dry bean industry is aggressively promoting the development and production of other seed types typically grown in Michigan. These other seed types, which include pinto beans, are viewed as expanding markets with potential advantages in freight and market opportunities. Pinto beans replaced navy beans as the dominant U.S. class in the late 1970s. Current U.S. production of pinto beans average 12 million cwt., as c with 7 million cwt. of navy beans. Currently, Michigan's share of U.S. pinto bean production is less than 1 percent.
The decline in navy bean acreage in the state has been partially offset by production of kidney, cranberry and black turtle beans, the latter two classes exclusively for export markets. Although the annual U.S. consumption of dry beans has hovered around 5 to 6 pounds per capita over the last decade, there is evidence of an increase in use because of the health and fiber value of beans. The increase in consumption has been in colored bean classes, with continued decline in the use of navy beans as canned baked beans which are not perceived as having the same health value as beans consumed in salads or Mexican foods.
Research at MSU has already contributed to a reversal in the decline through improved productivity resulting from management practices and new varieties. Genetic modifications of plant architecture has permitted the development of new seed types adapted to Michigan conditions. The diversification will permit expansion into both domestic and international markets to which Michigan-produce were virtually excluded.
Sugarbeets
Donald R. Christenson Department of Crop and Soil Sciences
Michigan and Ohio are the only states east of the Mississippi that have sugarbeet production. Two companies have operations in these states. Monitor Sugar Company operates one plant in Michigan while Michigan Sugar Company operates four plants in Michigan and one in Ohio. Sugarbeets are the only field crop grown in Michigan where the grower contracts the entire acreage.
The sugarbeet type of farm is larger than other types of farms in Michigan. For example, the average sugarbeet farm is approximately 800 acres compared to 290 for the cash crop type of farm which does not include sugarbeets or potatoes. The median income for o less than 400 acres is about $5,000 while it is $63,000 for operations above 900 acres. This explains the inverse relationship between farm size and proportion of off-farm income.
There has been a steady increase in the number of acres of sugar beets harvested in Michigan expanding from an average of 74,000 in 1960-1964 to 152,000 for the 1987-1991 period. Yields increased from 15.6 to 18.1 over the same time and Michigan's share of the U.S. production increased from 5.9 to 10.3 percent during this 27 year period.
Sugarbeet production is important to Michigan's economy. In 1987 the net direct contribution of sugarbeet production and processing plus the indirect effects contributed $434 million to the Michiga economy. The importance to the producer is illustrated as follows. Had sugarbeets been replaced with soybeans from 1975-1988, gross margins over variable costs for these farm operations would have been nearly 30 percent less.
The most significant development in the past 30 years has be availability of monogerm seed. Other developments which have increased production efficiency include broad spectrum herbicides and post emergence herbicide programs, higher yielding/higher sugar hybrids with increased disease resistance and machinery allowing harvest in a wide range of conditions. Strides have been made to increase the efficiency of factory operations. Application of computer technology will raise the processing of sugarbeets from art to a science.
In the next 10 years and beyond, through the use of tissue culture and other techniques, the rate at which new hybrids are developed will increase. The new materials will have higher sugar yield and increased resistance to diseases. Tillage and planting methods for systems with increased amounts of crop residues on the surface will be developed. Chemical inputs will be more site specific because of new herbicide materials and the development of new methods for determining fertilizer rates.
Sugar beet production is tied to domestic and international programs. Under an 18 percent support program, sugarbeet production is projected to expand 0.5 percent annually, but will decline 1.7 percent if price supports drop to 14.4 cents on raw sugar.
Potatoes
Richard W. Chase Department of Crop and Soil Sciences
Significant changes have occurred in the Michigan and U.S. potato industry during the recent decades. Processed potatoes, partially frozen products, have shown a dramatic increase as an increasing family work force desires products which can be prepared easily and quickly. The "think fresh" concept has helped maintain a substsantial fresh market and the per capita consumption of all potatoes increased to 125 pounds.
In December 1986, the Michigan potato industry experienced a significant loss with the closing of the Ore-Ida frozen processing plant in Greenville. This decision affected nearly 20 percent of Michigan's total production. Since then, new variety alternative have contributed significantly to the strengthening of both the fresh and processing markets. Michigan's potato production is less than 5 percent of the U.S. total; however, it has a farm gate value of over $60 million.
Michigan's potato acreage has gone from a high of over 370,000 acres at the turn of the century to the current 40-45,000 acres. Michigan's potato yields have historically been lower than the national average; however, the nearness to the large centers of population keeps Michigan competitive.
The state's potato acreage is projected to remain at the current level. Production for chip and frozen processing will remain steady and could strengthen. The introduction of new and improved varities will add to this strength. The expertise of Michigan's potato growers, combined with state-of-the-art storages and mechanization of production and harvest equipment, will keep Michigan competitive in these markets. The long russet type potato will continue to dominate the fresh market and the round white fresh market will continue to decline. There needs to be a reduction in the number of tablestock, round white varieties, and marketing by variety name, and culinary characteristics could enhance this process.
Integrated crop management principles of pesticide use and nutrient management will become increasingly important as environmental issues become greater. Commercial fertilizer usage will be reduced particularly nitrogen and phosphorus. The inputs of pesticides also be reduced because of cropping systems, new varieties with genetic resistance by traditional breeding and/or genetic engineering, and nonchemical approaches for insect control.
Nontraditional Field Crops L.O. Copeland R.H. Leep Department of Crop and Soil Sciences
Canola
The underlying reason for the interest in canola in the United States and Michigan is the high quality of its edible oil in human diets. Canola oil contains only 6 percent saturated fats, which is than that of any other edible oil. Thus it is of interest to health conscious consumers who have become increasingly wary of other oils produced from animal fats and tropical oils which vary from from 40 to 92 percent in saturated fat level.
Michigan canola production could realistically increase from present level of near 14,000 acres in 1992 to 50,000 to 100,000 by the year 2000. This projection assumes only that the current demand stays at its present level and the price continues at levels relative to other crops. Half of this increase could occur even without major shifts from present established crops simply by utilizing uncropped land, particularly with spring canola in northern Michigan where the growing season is not a constraint, since spring canola can complete its life- cycle and be harvested before frost. The major constraint to development of canola in this area may deeply entrenched animal-oriented agriculture and relative unavailability of basic cash crop farming equipment. Assuming that most livestock producers already have tillage and planting equipment only a grain combine is necessary to prepare for canola production.
The other acreage is likely to occur from increase in winter canola, mostly in the mid- to western one-half of the mid-Michigan area where wheat and soybean yields are not so high and growers are more receptive to alternative crops. This is the area where growers have already shown more openness to canola and where most production exists.
Lupins
Lupins grow best in areas that include a cool growing season and on soil types which are well drained, sandy loams and loams which are neutral or slightly acid. Three-year average yields of lupin variety trials in Michigan were 45 bushels per acre. However, variety trials containing newly selected cultivars have yielded up to 100 bushels per acre.
With milk prices falling to the lowest level since 1979, dai farmers will be looking for ways to decrease their milk prod costs. Growing and utilizing lupins for a protein supplement offer dairy producers in northern Michigan a significant opportunity to lower their milk production costs. The value of lupins as a rotation crop providing residual nitrogen is yet another benefit for producers who grow the crop.
Tree Fruit Donald Ricks Department of Agricultural Economics Jerry Hull Department of Horticulture
The Michigan tree fruit industry is an important component of Michigan's agriculture with 131,000 acres of orchards and a farm value averaging $130 million. The value added by processing, remanufacturing, storage and fresh packing provide a total estimated value of near $400 million to Michigan's economy.
A number of important changes in the fruit industry will occur bt the year 2000. These will include changes in technology, marketing methods, economic and competitive conditions, international markets and government policies on key issues such as the environment and farm labor.
Comprehensive analysis of the various conditions and changes which are likely for the coming decade is important to facilitate forward-looking strategic planning by the industry as a whole, by the firms within the industry and by key support institutions such as industry organizations, Michigan State University and government agencies. One objective of this analysis is to project a number of key trends and changes which are likely to occur within the tree fruit industry during the 1990s. Another objective is to identify key factors conditions, needs and issues which the industry should address and influence so that the fruit industry will be in the best position to improve its economic viability and growth during the next decade.
During the 1990s, the actions and strategies of the fruit industry and its support institutions will set the stage for the Michigan industry's position beyond the year 2000. This is especially important because of the strong competition from other U.S. producing regions and increasingly from foreign countries. These competing industries are dynamically changing, developing their strategic plans and making many new investments including new technologies, production capacity, marketing-packing- processing facilities and supportive research. Similarly the Michigan industry needs dynamic, future oriented plans to maintain and improve its competitive position and economic standing.
Some future Michigan fruit industry projection which seem likely for the 1990s include:
-Market opportunities for both fresh sales and processing markets for Michigan fruit will expand.
-Competition from competing supply regions and from imports will be intense.
-There will be strong competitive pressures to continually improve quality and adopt fruit products, varieties, and packs to meet changing market needs.
-Changes in technology, management, organizational arrangements, marketing systems and supportive services to improve Michigan's competitive position will be very important.
-Effective interrelationships and coordination between processors, shippers, packers and growers will also be very important.
-There will be somewhat fewer growers, processors and shippers with the remaining firms handling larger volumes
-For processors and shipper-packers a relatively few firms will become increasingly important.
-Apple acreage and production will increase substantially.
-Tart cherry bearing acreage and production will decline somewhat.
-Peach production will be steady.
-Sweet cherry production will decrease somewhat.
-Plum and pear acreage may decline gradually.
-New technologies for the Michigan fruit industry will include: improved orchard planting systems and dwarfing rootstocks, non-chemical pest control methods, further developments of integrated pest management systems, development of new effective and safe pesticides, improved spraying equipment, new technologies to tree mortality for stone fruits, new varieties and strains, continued progress on more effective storage and post harvest technique continued improvement in fresh packing- house equipment and techniques, continued progress with improved cherry and apple processing equipment and methods, and technology related to products and market uses.
Important issues for the fruit industry in the 1990s will include:
-How to maintain an economically viable industry.
-How to maintain and improve Michigan regional competitive position.
-How to cope with, and adjust to, the increasing regulations related to environmental and pesticide issues.
-How can the Michigan industry meet these regulation remain economically competitive in a global market.
-How can Michigan best achieve strong marketing of their fruit and most effective marketing strategies?
-What will be the impact of increased imports and globalization?
-How can Michigan expand its exports?
-What will be the impact on growers of expanded farm labor regulations, and how can growers cope with these?
-How to most effectively expand the demand for Michigan fruits.
-What changes will be most needed to maintain and improve Michigan's strong, dynamic and progressive processors fresh packer-shippers?
-How can the various segments of the industry most effectively coordinate their efforts and cooperate issues of mutual benefit to strengthen the industry?
-what industry actions are needed to assure that the does not contribute to any problems with groundwater or surface water?
-How can fruit growers best adjust to increased non-rural residents and urbanization?
-What are the best ways to effectively finance the research and extension programs needed to support a dynamic, competitive Michigan fruit industry?
Small Fruit Crops Eric J. Hanson Department of Horticulture
Blueberry, grape, strawberry, raspberry and blackberry production provides $55 million in income to over 2,000 commercial growers in Michigan. Most of this produce is processed and packaged in Michigan, so the value added to some products is several times the price paid to the grower. Nationally, Michigan ranks first in blueberry production, fourth in grapes and fifth in strawberry production. These crops have followed distinctly different trends over the last two decades, and projections to the year 2000 vary considerably.
Blueberry acreage and production have doubled since 1970, and this growth continues today. Similar increases in production have occurred in nearly all other production regions. Although the demand for blueberries remains high, we anticipate that blueberry markets will become increasingly competitive during the 1990s. Michigan growers will also face challenges due to the decline in available labor, increased labor costs, and loss of pesticides critical to the control of diseases and insects. Michigan is expected to continue to dominate this industry in the year 2000. However, several challenges need to be addressed to further improve Michigan's competitive position. Most importantly, technology is needed to improve and mechanically harvest berries for fresh markets.
Michigan produces about 50,000 tons of grapes annually on over 11,000 acres. Nearly all grapes are processed in the state into juice(91-94 percent) or wine (3-6 percent) products worth several times the price paid growers. Production has remained relatively stable the past 10 years, although significant changes are in progress major increase in white grape juice is anticipated and the state will likely be the leading producer in the country by the year 2000. The wine industry is changing from less expensive products based Labrusca varieties to mid- priced and premium wines composed and Vinifera varieties. As a result, gross sales of Michigan wines is expected to increase.
Strawberry and bramble production is expected to remain the same or decrease slightly by the year 2000. These industries have declined due to strong competition from California (strawberries) and the Pacific Northwest (brambles). Production for local fresh markets will likely continue.
Vegetables Robert C. Herner and John F. Kelly Department of Horticulture
Projections have been made for each of the crop groupings. Following are some of the projections which are likely to apply to all of the vegetable crops.
A. Production
-Total production and acreage are not likely
to change significantly.
-Total number of growers is likely to decline,
perhaps by 5-10 percent. This will probably
include both profitable and efficient operators
and marginal operators.
-Current production areas will remain the centers
of production.
B. Profitability and prices
-Profitability will continue to be variable from
season to season, but if recent price trends continue, overrall profitability will decline and could result in significant declines in
production and number of producers beyond the 10
percent estimated in A, above.
C. Input requirements
-Fertilizer use may decline as much as 20-25 percent as environmental awareness (e.g., water
quality) increases and cost-cutting becomes more
critical in determining profitability.
-Insecticide and fungicide use may decline by 20-
30 percent as pest management practices are improved and pesticides are removed from the market. A very limited IPM research effort at
MSU will severely limit progress on development of pest management programs specific for Michigan vegetables.
-Herbicide use is likely to remain steady, or to
increase as reduced-tillage systems become more
feasible
-Irrigation is likely to increase by 10-20 percent including new installations and expansion of us of existing systems. Precision
application of fertilizers through irrigation will contribute to the overall reduction in fertilizer use.
-Fuel use is likely to decrease slightly (5-10 percent as reduced tillage and sharper management decreases motor vehicle use.
-Electricity usage may be reduced through better
management, but may increase with increased us of irrigation and refrigeration to preserve quality Probably there will be little net change.
D. Quality and handling
- Better utilization of refrigeration, handling
and improved packaging will be necessary to maintain competitive stance. This will require
investment in facilities.
- Any expansion of Michigan markets will have to
be preceded by an increase in quality, which already generally is considered to be high under normal weather conditions.
E. Varieties
- Hybrids and other new genetic improvements will
continue to provide growers with higher-quality, higher- yielding crops. The cost of seed is likely to increase significantly, perhaps as much as 50 percent.
F. Management
-Computers, crop consultants and extension- delivered technologies and problem solutions will be needed to address the need for the more efficient management required for profitability and sustainability. There is likely to be increased demand for farm management software of various kinds for use on
MS-DOS or Apple computers.
G. Marketing
- Current markets will remain important. These
extend beyond the state boundaries. Increased
transportation costs and other costs of production unique to California (e.g., water) could give Michigan producers an edge in markets not currently within reach.
- More coordinated marketing efforts will be needed before any large increase in marketing competitiveness occurs.
H. Technology
- Packaging, storage and handling technologies,
both new and currently available will be employed more extensively as the market becomes more demanding hgh quality vegetables convenient
to the consumer.
- Genetic improvements from conventional plant breeding will continue to be adopted readily by the industry. Breakthroughs in genetic
engineering will begin to deliver improvements
hitherto unavailable.
- IPM technologies will be adapted as rapidly as
they are developed, but unless the research in this area is accelerated, the problems of pest control with fewer available pesticides will overtake the industry.
Nursery and Landscape Robert Schutzki Curt Peterson Department of Horticulture
Landscape horticulture is a broad and complex commodity. Its segments encompass traditional agriculture crop production, utilization and management of agriculture products through landscape design, construction and management services, and retail marketing and distribution of products to the consumer. The complexity diversity of landscape horticulture has placed it in the heart of agriculture production; yet at the same time on its fringes separate from traditional programs related to food and fiber
Nationally, nursery and greenhouse crop production represents one of the fastest growth segments of agriculture. Cash receipts have doubled since 1981 and recently account for 10 percent of all farm receipts.
Michigan has traditionally maintained a position within the nursery producing states in the country. In 1990, cash receipts from nursery crops were estimated at $140 million. Trade for Michigan retail nurseries and lawn/garden supply stores reported in the U.S. Department of Commerce 1987 Census was estimated at $297 million The estimated worth of landscape services in the Michigan agricultural economy is difficult to predict. The Michigan Nursery and Landscape Association, in conjunction with the Michigan Department of Agriculture and Michigan State University Department of Agricultural Economics, is in the process of collating data industry- wide survey.
Many challenges face the nursery and landscape industry industry in the future. Land development trends will have trickle down effects on landscape and nursery markets. Changes from production to consumer driven markets will be the prevailing influence over business operations. Current and future economic climates will require the sophistication of business management skills and creativity in marketing. Concerns with our environment will continue to govern landscape and nursery practice. The environmental sensitivity landscape and nursery industries will bolster their image as environmental stewards.
The industry must establish its political position in both the agriculture and urban arenas. Federal and state governments become familiar with the economic impact of nursery production landscape service and retail distribution. The landscape and nursery industry not only contributes to the economic welfare of Michigan it maintains and enhances environmental quality. Its competitiveness as a viable part of agriculture depends on the consorted efforts Michigan Legislature, and Michigan research and education institutions and its members.
Christmas Trees Melvin R. Koelling James B. Hart Larry Leefers Department of Forestry
It is probable that the total number of Christmas trees harvested annually in Michigan will decline. This decline from the 6 plus trees of the late 1980s will be most noticeable in the mid-1990s, following which production is likely to stabilize Relative to the
mid-1980s, annual plantings have dramatically decreased.
The decline in production will be mostly confined to Scotch Pine. For species other than Scotch pine, production can be expected to remain the same or increase. Eastern white pine production will remain generally constant, while annual plantings and harvest of species such as Douglas-fir, balsam fir, concolor fir and Fraser will expand. Plantings of Colorado blue spruce will likely although trees in many of these plantations will also be directed towards the nursery and landscape market.
Production inputs will be directed towards growing preferred and increasing the quality of trees produced. To this end, it is probable that increased emphasis will be placed on providing soil fertility, obtaining more effective control of competing vegetation, and control of destructive and/or damaging insects and diseases. Growers will also place greater emphasis on site selection, soil preparation, purchase of higher quality plan stock and weed control techniques prior to planting.
Concurrent with the expected decrease in annual harvests, it probable that a decline in the number of Christmas tree prod also be anticipated. It is also probable that several continuing Christmas tree farms will decrease in size. This will occur as growers apply more intensive management practices to fewer total acres most suited for plantations. For some, total tree production is expected to remain the same or increase slightly as the intensity of management increases. This feature will be most characteistic of farms which produce true firs and Douglas-firs.
Like others involved in the production of agricultural goods management activities of Christmas tree producers will continue to be affected by environmental concerns. Most notably these will relate to the use of pesticides and fertilizer compounds. Growers subject to the constraints imposed by society in their efforts to safeguard groundwater and supplies and to minimize the use of products of potential environmental harm. Accordingly, it is expected that the use of recommended best management practices integrated pest management techniques and biological maintenance of soil fertility will become more widespread.
Successful Christmas tree growers in the 1990s will become much more involved with good record keeping, particularly as related to production costs. Continuing competitive markets will necessitate that growers know their production costs in order to price t products at a level which will include some profit.
Turfgrass Bruce Branham Department of Crop and Soil Sciences
The lawn care industry in Michigan currently accounts for
66 of the total dollars expended for professional turfgrass mai By contrast, the golf course industry, the next largest port the turf industry, accounts for only 19 percent of the total maintenance expenses. The lawn care industry is beset by a problems that may inhibit the long-term growth of the indust These problems are:
1. Public perception of the industry as one without concernhe environment, and an industry which relies exclusivel toxic chemicals. 2. Increasing environmental regulation of the industry which will increase the costs of operation. 3. Scarcity of labor which will inhibit growth, increase training costs, and increase the price of labor.
Finally, as we enter the decade of the 90s and leave behind conspicuous consumption of the 80s, will consumers continue embrace the use of services such as the lawn care industry or we will see a return to a do-it-yourself attitude?
By the year 2000, the lawn care industry will have undergone radical changes. The service will be more costly and consequently a proportion of U.S. households will use this service. The em will be better trained because new legislation will force the industry to either hire trained personnel or to pay for their training once on the job.
The golf course industry will see sustained growth throughout the 1990s. The environmental issues that have plagued the lawn industry have also impacted golf courses, but to a lesser degree. The largest problem facing golf courses relates to the fact golf courses are sited on environmentally sensitive areas.
The environmental and legal issues aside, the golf course industry will be a growth industry for the 1990s. Jobs for students trained in turfgrass management will continue to be plentiful.
Significant new regulations have recently been implemented by the Michigan Department of Agriculture regarding the certification pesticide applicators. The net result of this legislation is to provide a more knowledgeable and skilled work force in the turfgrass industry.
The decade of the 90s will see an increased emphasis on the conservation of resources that could have significant impacts on the turfgrass industry. In those areas of the country where fresh water availability is an issue, many golf courses are using effluent water for their irrigation needs. This is win-win situation where community saves money by having an outlet for their effluent golf course receives the water that it needs.
Floriculture William Carlson Barbara Fails Department of Horticulture
With the continued efforts of industry, MSU and state and federal governments, Michigan's floriculture industry could be worth million by 1995, and $250 million by the year 2000. To accomplish this, rapid adaptation of new research information by Michigan growers is necessary. Additionally, collective strategic planning all floral marketers is essential to identify competitive advantages and expand market opportunities is essential. Market distribution channels similar to those employed by the Dutch, Danes and Colombians are needed to keep floral products competitively priced and of high quality.
The industry will also have to address an identity crisis: while we produce the most beautiful and well- liked product in the world we need to reaffirm this fact to the consumer and remind them to buy more plants and flowers more often. Floriculture products are desirable and improve the quality of life. MSU can take a leadership role in this area through programs such as the new Horticulture Demonstration Gardens, 4-H Youth Horticulture, Master Garden educational outreach course offerings.
The floriculture industry has been a leader in environmental stewardship. Research has produced systems for the elimination of groundwater contamination and to reduce fertilizer and pesticide use. By the year 2000, this industry will be a model for the rest agriculture.
In the next 10 years, floriculture will be a leader in developing plant growth models. These systems that use computers and mathematics to predict plant growth will be combined with environmental computers so that exact plant production specifications will be met. These software packages will be marketed to growers will rely on them to produce quality plant material.
The number of institutions that will be actively involved in floriculture teaching, research and extension will decrease drastically in the United States by the year 2000. With dwindling researchers, financial support and the lack of acknowledgement ornamental horticulture is over 10 percent of total U.S. agrriculture there will be less than 10 institutions of higher learning in the United States committed to floriculture. MSU made a financial commitment in the 1980s to build the Plant and Soil Sciences facilities, which positioned it among those top 10 institutions Regional institutions for floriculture, therefore, will be a reality as will a greater demand for trained individuals to lead an expanding industry. MSU will be among the leaders not only in traditional educational programs but also in outreach educational programs designed specifically for floriculture producers, wholesalers, retailers and consumers.
Agricultural Input Supply
In 1990, Michigan farmers paid out $2.3 billion in cash expenses and incurred another $.5 billion in capital consumption (depreciation). In addition to capital consumption which was the most important single cost, feed, interest, labor and property taxes each accounted for about 10 percent each of the total costs with repair and maintenance at 8 percent. Seed, fertilizer, pesticides, fuel and oil each represented about 4-7 percent of the costs (Table 4).
The set of papers on agricultural input supply outline in some detail the trends and future directions in these input costs. Some of the major conclusions are as follows:
Fertilizer (Robert Lucas, Department of Crop and Soil Science)
In 1990, fertilizer sales in Michigan amounted to 251 thousand tons of nitrogen, 122 thousand tons of phosphate and 228 thousand tons of potash. Compared with 1980, sales of nitrogen were up sharply, phosphate and potash sales were down. Sales of all three nurients declined in the most recent five-year period.
By the late 1990s, phosphate (P) sales will drop below 100 thousand tons because of high soil tests and concerns about excess P in streams and ponds which promote algae and other plant growth (called eutrophication). Potash and nitrogen usage will continue at about the same as in recent years. The cost of anhydrous ammonia and other nitrogen products are related to petroleum prices. Phosphate and potash prices will probably be tied to general inflation.
Seed (Larry Copeland, Department of Crop and Soil Science)
Seed prices will reflect prices on the respective crop and general inflation. Most seed prices will increase by 25-35 percent 1991 and 2000. On soybeans and wheat, an increased share of sales will originate with private varieties.
Pesticides (Larry G. Olsen, Pesticide Education Coordinator)
In general, the supply of pesticides worldwide and in the U.S. will be adequate to meet demand for major crops. Minor crop growers will have a choice of fewer pesticides available as reregistration costs and potential liability force manufacturers to drop less profitable and high liability products. The number of products registered has dropped from 45,000 in 1988 to 18,900 in 1991 and will decrease another 25 percent by 2000. If pressure by the environmental concerned sector results in the unavailability of pesticides necessary to produce a specific crop in Michigan or the U.S., the production of that crop will shift to a country which may have less restrictive pesticide regulations,and their efforts may be naged.
Just over 800 million pounds of active ingredients are applied to agricultural land in the U.S., with Michigan having 14.7 million pounds of the total. The pounds of pesticides applied will continue on the slow trend of reduction. Forces to continue that trend include: biotechnology, resistance management, improved application technology, processor limitations, environmental pressures, new regulations, human exposure concerns, urban interface and commodity support prices.
Distribution of pesticides will remain the same, but there will be fewer manufacturers, distributors and dealers due to