In mid-September, following floods and continuing wet conditions, damage estimates for the Louisiana agriculture sector have been raised to $277 million.
In late August, “we did an initial rough, down and dirty, estimate right after the heavy rains and the flooding began,” says Kurt Guidry, LSU AgCenter economist. “That first estimate for damage was around $110 million. We knew it would change predominantly because we were only looking at impacts to gross revenue from yields.
Guidry and colleagues’ latest findings for four major crops:
Estimated reduction in farm receipts: $60.5 million.
Estimated increases in farm production costs: $8.41 million.
Total estimated impact: 68.9 million.
$62.1 million; $7 million; $69.1 million.
$39.4 million; $4.6 million; $44 million.
$26.2 million; $460,000; $26.6 million.
Guidry spoke with Delta Farm Press on September 14. Among his comments:
On the revised damage numbers…
“The second assessment looked at quite a few more issues producers are facing. Not only did we readjust the yield impact but also things like quality impacts, which brings in not only the southern part of the state but also the north. That’s not because the north has had the flooding issues of the south but is due to persistent rainfall that’s delayed production practices and/or harvest. Many of our producers are looking at crops with significant quality problems.
“We also looked at lost commodities in storage. While we didn’t have a lot of that in terms of row-crops, we did have a lot of hay lost in storage.
“Another factor was increased cost of production. Many producers are harvesting commodities, salvaging what’s left in the field under very wet conditions. Doing that on saturated soils means harvest speed and efficiency goes down. In some cases, commodities were lodged – particularly rice although that also happened in corn.
“In addition to the increased harvest costs, harvesting in wet conditions disrupts the land in terms of rutting. Producers, if they’re able, will have to go back in later this fall and do additional land work and prep that they’d normally not have to. There are certainly costs associated with the additional tillage and fieldwork.
“Infrastructure losses were also a part of this assessment. These type of damages occurred predominantly in the southern part of the state. Tractors, implements, farm structures were included. In the case of livestock, quite a bit of fencing was totally destroyed.
“So, when it was all said and done, we went from about $110 million in damages to $277 million. It’s unlikely that number will stay steady. In recent weeks, we haven’t had a period of five to seven days of dry weather to dry things down – really, we need two or three weeks’ worth of dry days. Instead, we’ve had a continuation of not flooding rains but enough rain to delay harvest and normal field operations. That could have additional impacts on the bottom line, particularly as it relates to quality damage.”
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On programs available to assist affected producers…
“The 2014 farm bill basically eliminated the permanent disaster legislation under the former farm bill’s SURE program. SURE would automatically kick in as long as the parish or county was declared a disaster area.
“What producers have now – and this is mostly for row-crop producers -- is an emergency loan program. That offers low-interest loans to producers who have had at least a 30 percent reduction in their production level. It’s a loan so it has to be paid back. In many cases, these type of loans can tide an operation over, allow it to get over the initial burdens caused by the damages.
“For livestock, there’s a livestock indemnity program through the Farm Service Agency. That provides some assistance for livestock that was lost. The ELAP program can provide some assistance for things like hay that was lost and the cost of relocating cattle. It could also help with beehives that were taken out by the flood.
“One caveat for the ELAP program: a $20 million funding limit for the entire United States for the entire year. So, producers impacted in southern Louisiana in August will be going after the same pot of money as those who were hurt in the March floods. That $20 million may be stretched thin.
“There is an Emergency Conservation Program through FSA. That will largely be for the parishes where there was flooding that left behind a lot of debris. The program provides some cost-share help to remove the debris and, in some cases, to maintain critical land.
“Beyond that, there’s not much. Right now, row-crop producers will have to rely on crop insurance. There is some hope that additional assistance will come later but none of that is guaranteed.”
Will this mean some farmers will be taken out?
“That’s always a concern. To answer that, we really need to go back 18 months to two years ago. The August rains and floods are the third major event to hit Louisiana agriculture. In 2015, we had quite a bit of flooding along the Red River. Last March, we had significant flooding across much of northern Louisiana and a smaller area in the southeast.
“Add low commodity prices to these terrible weather events and the cumulative effect has put significant financial stress on many of our farming operations. It’s too early to give a percentage but it’s plain the financial wellbeing of many operations is a concern.
“If corn prices were at $8 per bushel and soybeans were at $15 per bushel, the operations would have the opportunity to recover in a much easier fashion. Unfortunately, if you look at where commodity prices are predicted to go in 2017, there’s not a lot of optimism for big price improvements.”
“Another thing to keep an eye on is the Louisiana sugarcane industry. Thankfully, the cane wasn’t hurt too badly with the flooding. But producers are about to begin harvest season.
Without dry conditions – and these near-daily rains are putting any chance of that in real jeopardy – cane damage could increase. We’re not confident the evolution of the damage is completely done.”