Problems from steadily rising production costs and falling prices are magnified by the lack of rain this year. Dr. John Lee, ag economist with Mississippi State University's Extension Service, said these prices are significantly lower than prices in recent years. After adjusting for inflation, the buying power of a pound of cotton is less than one-third of what it was in 1980. Based on projected yields of 773 pounds per acre, Delta cotton farmers need 65 to 70 cents a pound to break even. Rice is in a similar position.
Inflation compounds the problem of falling commodity prices.
For example, in 1972, farmers received about 29 cents a pound for cotton. In inflation adjusted dollars, today's cotton value of 45 cents a pound is worth just 13 cents in 1972 dollars. Similar inflation-adjusted value declines are seen in each of the state's commodities. Lee said it takes extraordinary measures for farmers to survive and remain profitable in years such as this, but farmers find ways to cope. Major commodity yields continue their upward trend, a fact that has helped offset rising production costs.