The Southeast market includes Florida, Georgia, Alabama, and South Carolina (and though excluded from the NCREIF Region, North Carolina is sometimes considered in the SE as well). That collection of states spans an immense region with highly differentiated crop production by region. The area does have a warmer climate, flatter lands in general, and good water availability but also faces severe weather and flooding, inadequate access to farm labor, and competition with residential uses for growing populations.
Florida’s once thriving fresh market citrus industry has struggled to maintain scale and profitability due to the Huanglongbing (HLB), or “Citrus Greening,” crisis. The citrus that remains is primarily used for production of juice oranges and grapefruit. The state is the top U.S. producer of fresh tomatoes, fresh sweet corn, and watermelon, representing about 54%, 36% and 32%, respectively, of the nation’s cash receipts for those crops. Florida also leads the country in the production of sugarcane for sugar, producing 16.5 million tons in 2021, or 51% of the nation’s total. Other significant commodities include vegetables such as bell peppers, cucumbers, and cabbage, leading to the state having the second highest cash receipts in the U.S. for all vegetables and melons behind California. Overall, Florida generates around $8 billion in agricultural sales each year.
Georgia's farm-level agricultural output is larger than Florida’s at approximately $10 billion annually. The top valued agricultural output is now broilers with $4.2 billion in annual sales followed by cotton with around 2.2 million bales worth over $1 billion. Representing 51% of the nation’s peanuts market, the state produces around 3.3 billion pounds of peanuts annually, making it the top U.S. producer. Georgia also ranks second in the nation’s production of pecans, onions, and broilers (chickens), with shares of 33%, 14%, and 13%, respectively, of the total cash receipts for those commodities. Despite being known as the “Peach State,” Georgia only has about 8,200 acres of peach production that accounts for about $35 million in annual sales which ranks it third in the U.S. for peach production behind California and South Carolina.
North Carolina’s agricultural production generates $10-13 billion in annual cash receipts, with 66% coming from livestock, dairy, and poultry, and the remainder from crops. The state ranks in the top five for several commodities, including tobacco, sweet potatoes, poultry and eggs, cucumbers, and bell peppers. North Carolina produced 47% of the nation’s tobacco and 58% of the country’s sweet potatoes in 2021.
Agribusiness is South Carolina’s largest economic sector, contributing nearly $42 billion and over 200,000 jobs to its economy, according to the state’s Farm Bureau. South Carolina has the third most timber acreage in the U.S., behind Georgia and Oregon. South Carolina has crop enterprises on about 5 million acres of farmland, with the state’s top commodities including corn, cotton, hay, soybeans and peanuts, South Carolina generated almost $8 billion in agricultural sales forecast for 2023.
Alabama has 38,500 farming operations covering 8.2 million acres. Corn was the top commodity produced in the state in 2022, followed by cotton, which is grown in 59 of Alabama’s 67 counties. Producing almost 610 million pounds of peanuts in 2021, Alabama is the nation’s second largest producer behind Georgia. Rounding out the major agricultural enterprises, Alabama producers rank second or third most years in poultry production with Alabama Poultry and Egg Association reporting that the industry accounts for more than $15 billion in total annual revenue.
Agricultural production is undergoing continued change in the Southeast, in particular in Florida and in coastal areas suitable for residential and lifestyle uses. Moreover, recent impacts of bird flu and associated decimation of the poultry populations has led to wider swings in profitability and production though 2023 appear to have been an upturn for that industry.
The interaction between population growth and farmland in production uses is one of the key features of this region to continue to monitor.
The Southeast remains a set of fairly distinct markets presenting different problems and opportunities for agricultural asset owners. Florida has largely recovered from its most recent hurricane event and is still reinventing its agricultural industry after the loss of much of its fresh-market citrus industry. On the bright side, development opportunities, retirement transitions, and lifestyle “farming” have supported the state’s overall income. Georgia and the Carolinas have reentered the conversation about attractive places for agricultural investments and offer consolidation opportunities and diverse cropping options as well, and the recent returns data show a resurgence in performance after a long period of average to lower relative performance.