FARE Blog

Food, Agriculture, and Resource Economics

Cotton Payments, Disaster Assistance, and Safety Net Update

By Don Shurley and Yangxuan Liu

Download the PDF version of the factsheet

MFP (Market Facilitation Program) Payments

USDA announced last July that it would act to assist farmers damaged by tariffs and reduced exports.  In September, the Market Facilitation Program (MFP) was initiated and the signup began.  MFP payments are received on actual 2018 production.  The payment rates for crops commonly grown in Georgia are listed below:

Initially, the signup deadline was January 15, 2019 but due to the partial government shutdown that included Farm Service Agency (FSA) offices, the signup deadline was extended to February 14, 2019.  The signup period has now ended.  Before payments can be received, in addition to signing up for MFP, the 2018 production must be certified.  The deadline for certifying production with FSA is May 1, 2019.

A first/initial payment was authorized on half of 2018 production.  If the farm was signed up for MFP and 2018 production has already been certified, the first payment has likely already been received.  A second payment—at the same MFP rate on the other half of production, was announced on December 17, 2018.  If the farm is already signed up and certified the production, the second payment has also been made or should be made shortly.

Producers did not need to sign up again for the second payment.  If the first payment has not been or was not received, one payment for the total amount will be received.  Below is an example for how the payment is calculated. Assuming a farm produced 750,000 lbs or approximately 1,500 running (gin count) bales of upland cotton lint in 2018.

Example First Payment:

Total Certified Production = 750,000 lbs

MFP = 750,000  x  ½  x  $0.06  =  $22,500

Example Second Payment:

Total Certified Production = 750,000 lbs

MFP = 750,000  x  ½  x  $0.06  =  $22,500

Example Total (All In One Payment):

Total Certified Production = 750,000 lbs

MFP = 750,000  x  $0.06  =  $45,000

Unfortunately, MFP payments for cotton will be less than expected.  This is due to crop loss caused by Hurricane Michael and excessive rains and delayed harvest during the entire harvest season that followed.  Prior to Hurricane Michael, USDA projected the Georgia crop at 2.9 million bales or approximately 1.4 billion pounds.  The MFP on that amount would have been approximately $83.5 million.  The latest USDA projection for the Georgia crop is approximately 936 million pounds and MFP of $56.1 million—a 33% reduction.

The limit on MFP payments is $125,000 per person or legal entity for corn, cotton, grain sorghum, soybeans, and wheat combined and applicants must have an AGI of less than $900,000.  The limit on MFP is separate from the limit on ARC/PLC.

Given the relative crop acreages in Georgia and the relatively small payment on corn, on average, the majority of a person or entity’s MFP will be on cotton if the operation grows cotton.  For example, to reach the $125,000 payment limit from cotton only, it would require about 2 million pounds (4,340 USDA 480-lb statistical bales or about 4,183 “running bales” from the gin).  At the state average yield of 693 pounds per acre, this would be equivalent to roughly 3,000 acres of cotton per person or legal entity at that yield.  Had yield been higher as expected (and many producers have said they had a record crop prior to Michael), the limit would have reached the cap at much smaller production and would have been an issue for some producers.

2018 Disaster Assistance

At the time of this is written, there is yet no 2018 disaster relief package but the outlook appears to be improving for having legislation soon.

After months of budget negotiations, disagreements, delays, continuing resolutions, and a partial government shutdown, both the House and Senate passed the final budget package for FY19 on February 14, 2019 and President Trump signed the legislation into law on February 15, 2019.

Unfortunately, although included in earlier budget bills that never fully passed through both House and Senate, 2018 disaster funding was omitted from the February 14 final FY19 legislation.  This means that disaster funds will now come in the form of a separate (supplemental) appropriations bill.

Recently, a bi-partisan group of Senators spearheaded by Senator David Perdue (GA) introduced legislation to the Senate for $13.6 billion in relief efforts including $3 billion for crop-related losses during 2018 due to Hurricanes Michael and Florence and other natural disasters.

Details and the specific workings of the program are unknown and yet to be determined by USDA, should the legislation proceed forward and become law.  From what is known, this Senate legislation seems to closely align with a similar House bill that passed back in January.  Therefore, if the Senate bill passes, it should not be difficult and time-consuming to work out the differences in a conference bill.  President Trump has indicated he will sign disaster legislation when it reaches his desk.  It is hoped that the Senate bill can be considered and passed later this month.

It appears that this legislation for 2018 losses would provide relief through the Wildfires and Hurricanes Indemnity Program (WHIP) in a similar manner as for 2017 crop losses.  In general, the WHIP payments formula is:

WHIP Payment = WHIP Expected Value – WHIP Harvest Value – Insurance Indemnities

The WHIP Expected Value is based on the crop insurance Actual Production History (APH) for the crop and the coverage level of crop insurance elected for the crop.  A WHIP factor of 70% to 90% is proposed and would be applied to the APH—the higher the insurance coverage level, the higher the WHIP factor.

The WHIP Harvest Value is based on the actual yield.  Insurance Indemnities would be the amount(s) received on the crop.  Efforts are on-going to have the premium paid deducted from this amount.

The idea or concept behind WHIP disaster assistance is to pay the producer something above what crop insurance elected on the farm would pay—to provide an additional amount above what crop insurance is going to pay.  This amount will vary depending on whether the crop was insured or not and, if so, at what coverage level.

Because many producers in Georgia were anticipating a record crop, especially for non-irrigated production, it is realized that because WHIP is based on the farms APH, that any payment received cannot fully compensate for the actual loss.  Any amount of payment is helpful, however.

The following website illustrates an example of how WHIP worked for 2017 crop losses.  The WHIP factors will have to be updated/revised based on how similar legislation would compensate for 2018 losses.  Nevertheless, the illustrated example is useful in understanding the concept.

http://www.cotton.org/econ/govprograms/ag-disaster-asst-programs.cfm

Seed Cotton (SC) Program Update

Seed cotton (SC) became a covered commodity and eligible for ARC (Agricultural Risk Coverage) and PLC (Price Loss Coverage) effective with the 2018 crop—the last year of the 2014 farm bill.  Seed cotton continues as a covered commodity in the new 2018 farm bill.  Payment for both ARC and PLC is received on 85% of the farms seed cotton base acres.

The PLC Payment is the PLC Payment Rate times the established seed cotton payment yield for the farm times 85% of the farms seed cotton base acres.

Currently, the projected seed cotton PLC Payment Rate is 2.9 cents per pound.  This is based on the most recent projections of the 2018 market year average (MYA) price for upland cotton and cottonseed.  The SC MYA Price is a weighted average price (based on production upland cotton and all cottonseed) as shown in the table below.  Currently, the SC MYA Price is projected to be 33.8 cents per pound.  This is subject to change—the marketing year for 2018 cotton does not end until July 31, 2019.

The PLC Reference Price for seed cotton is 36.7 cents per pound.  A PLC payment is received if the SC MYA Price is less than 36.7 cents.  Currently, the SC PLC projects to be 2.9 cents per pound (36.7 – 33.8 = 2.9).

For 2019, producers on a farm must elect ARC or PLC for seed cotton.  The 2019 election will be for the 2019 and 2020 crops.  Starting with the 2021 crop, an election will be made each year for the 2021, 2022, and 2023 crops.  The choice of ARC or PLC is not always clear cut and can be confusing.  In making the decision, the main factors to remember are:

  • PLC payment is triggered by price only.
  • The PLC payment for the crop on a farm will depend on the farms PLC Payment Yield for the crop.
  • ARC is triggered by revenue.
  • An ARC payment depends on county yield, not the farm’s own yield.

How PLC and ARC compare is going to vary and will be specific to the farm because the amount of any PLC payment, and thus how ARC and PLC will compare, will be determined in-part by your own PLC payment yield for your farm.  FSA guidelines for ARC/PLC election and enrollment for the 2019 and 2020 crops have not yet been announced.

Beginning with the 2019 crop (the first year of the new farm bill), the PLC Reference Price will be allowed to “float”.  A PLC Payment will be received if the MYA Price for the crop is less than the “Effective” Reference Price for the crop.  The Effective Reference Price will be the higher of the Statutory Reference Price (36.7 cents, for example for seed cotton) or 85% of the 5-year OA (Olympic Average) MYA Price but not to exceed 115% of the statutory price.

This “Effective Price” also impacts ARC.  In ARC, this Effective Reference Price is used as a substitute for the MYA Price in calculating the Benchmark Price if the MYA Price is lower than the Effective Reference Price.

Seed Cotton ARC/PLC and STAX

Most producers have already made their seed cotton generic base allocation decision and election and enrollment of either ARC or PLC for the 2018 crop.  These decisions had to be made or the producer had to already be on FSA’s list (register) waiting to be serviced by December 7, 2018.

The late timing was such that ARC/PLC election and enrollment for 2018 didn’t have to be made until after the start of the 2018 crop marketing year and near the end of the 2018 growing season.  This turned out to be a good thing because Hurricane Michael resulted in large yield loss in some counties and, as a result, some seed cotton bases switched to ARC rather than PLC—ARC being more likely to have a higher payout than PLC for 2018 in some situations.

For the 2018 crop, a farm could have STAX insurance coverage and also have seed cotton base enrolled in ARC or PLC on the same farm.  We suspect this is because the crop insurance sales closing and premium payment deadlines for 2018 spring planted crops occurred months earlier and prior to ARC/PLC election and enrollment.  The sales closing deadline in Georgia, for example, is February 28th.

Effective with the 2019 crop, if a farm has seed cotton base and if that seed cotton base is enrolled in ARC/PLC, all cotton acres planted on that farm are not eligible for STAX.  This has been a source of confusion and misinformation.  The following website is an excellent source of information provided by the USDA Risk Management Agency (RMA) and answers many questions related to ARC/PLC and STAX:

https://www.rma.usda.gov/en/News-Room/Frequently-Asked-Questions/2019-STAX-and-Agriculture-Risk-Coverage-and-Price-Loss-Coverage

In summary, if the seed cotton base on a farm is enrolled in ARC/PLC, all cotton acres planted on that farm are ineligible for STAX.  In Georgia, the crop insurance sales closing deadline for spring planted crops like cotton is February 28th.  This is likely going to be before the ARC/PLC enrollment deadline.  If a producer thinks he/she may want to have STAX coverage for the farm, the producer can purchase STAX first (by the sales closing deadline) then still have the option to enroll in ARC/PLC later, prior to the premium due date, and STAX coverage will be cancelled.  (Note: It is expected that STAX coverage can be cancelled but guidelines concerning this are not yet been released by RMA.)  The sales closing date for 2019 spring planted crops has already passed.

The producer must elect ARC or PLC for seed cotton base on the farm.  In 2019, for example, the producer will elect ARC or PLC for seed cotton base for the 2019 and 2020 crops.  Election does not impact the eligibility for STAX.  The producer will then make a separate decision to actually enroll in ARC/PLC for the crop year.  If seed cotton base on the farm is enrolled in ARC/PLC, then the farm is not eligible for STAX.

ARC and STAX are similar as they are both a form of an area revenue guarantee.  STAX is getting a second look mainly in situations where the cotton acres to be planted on a farm are greater than the seed cotton base on that farm or in situations where cotton will be planted and the farm has no seed cotton base.

First Look at the Farm Bill Title I for Row Crops: Agriculture Improvement Act of 2018

By Yangxuan Liu* and Adam N. Rabinowitz*

Download the PDF version of the factsheet.

On December 11, 2018, the U.S. Senate passed the Agriculture Improvement Act of 2018 (2018 Farm Bill).  The U.S. House Representatives passed the same version on December 12, 2018.  The President of the United States is expected to sign the bill into law on December 20, 2018.  The 2018 Farm Bill continues programs for Title I commodities from the 2014 Farm Bill: the Agriculture Risk Coverage (ARC) program, the Price Loss Coverage (PLC) program, and the Marketing Assistance Loans (MAL) program with Loan Deficiency Payments (LDP).  Below we have identified some major changes in the new farm bill for easy reference.

  • The election between ARC/PLC is one of the key changes for Title I commodities in the 2018 Farm Bill. The initial election will be in 2019 for the 2019 and 2020 crop years. Beginning with the 2021 crop year, producers are allowed to change their ARC/PLC program elections annually.
  • A new effective reference price and updated PLC program yields are created for covered commodities.
  • The statutory PLC reference prices for Title I commodities remain the same as in the 2014 Farm Bill with seed cotton added. The effective reference price permits the reference price to increase up to 115% of the statutory reference price.
  • At the sole discretion of the owner of a farm, the owner shall have a 1-time opportunity to update the PLC payment yield, on a covered-commodity-by-covered-commodity basis. The payment yield is used in calculating the PLC payment for each covered commodity for which the PLC election is made.
  • In the case of seed cotton, for the purposes of determining the average yield per planted acre, the average yield for seed cotton per planted acre shall be equal to 2.4 times the average yield for upland cotton per planted acre.
  • Beginning in 2019, ARC-CO (ARC-County) payments will be based on the physical location of the farm, with farms that cross multiple counties being prorated into each county.
  • When calculating the benchmark revenue for ARC-CO, the effective reference price will be used as part of the calculation for the 5-year Olympic average price when the effective reference price is higher than the marketing year average price. In addition, the 5-year Olympic average yield will use either the county average yield or 80% of the county transitional yield, whichever is higher for that year.
  • Loan rates for the MAL program have increased for most commodities, except peanuts. Peanuts maintain the $355/ton loan rate and cotton will have a factor to limit year-to-year variability.
  • Payment limits are still $125,000, with a separate payment limit for peanuts. First cousins, nieces, and nephews are going to be included in the family members eligible for payments.
  • Unassigned base will remain unassigned and not be eligible for payments.
  • Adjusted Gross Income limits remain at $900,000 per person or legal entity.

 

*These authors contributed equally to this post.

Implications of Hurricane Michael on the Seed Cotton ARC/PLC Selection Decision

By Don Shurley and Yangxuan Liu

Download the PDF version of the factsheet.

We recently released a factsheet which compares between the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) for this year after Hurricane Michael. We conducted the analysis based on some representative counties in GA.  With the hurricane causing tremendous damages to our cotton industry, a lot of counties suffer from tremendous yield losses. For some heavily-impacted counties, the yield loss might trigger for ARC payments. Below are the main points from this factsheet.

  • Many producers were expecting very high yields for both irrigated and non-irrigated, especially non-irrigated compared to average. Some producers report little difference in yield between irrigated and non-irrigated.
  • For 2018, ARC is most likely going to be the way to go for producers in a county with 50 to 60% or more yield loss—“loss” being measured relative to the yield that was expected pre-Michael.
  • ARC vs PLC also depends on the farms seed cotton PLC payment yield.  Landowners can update the payment yield but if this can’t be done and/or if the PLC payment yield is low compared to county yields used for ARC, then PLC may already be at a disadvantage or have less of an advantage than it otherwise have.
  • There are uncertainties.  Any PLC payment for 2018 is a moving target.  The Seed Cotton (SC) Marketing Year Average (MYA) Price is yet to be determined.  This will also effect ARC because the 2018 SC MYA Price partially determines 2018 Actual Revenue.  The 2018 SC county yield is also TBD.  We used estimates provided by UGA county Extension agents.  There is also the uncertainty of another ARC/PLC election opportunity for any farm bill extension.  Both House and Senate versions call for another election in a new farm bill.

Agriculture Disaster Assistance Information Session for Producers

By Adam N. Rabinowitz

On Monday, October 22, 2018, the University of Georgia Tifton Campus hosted an information session for agricultural producers in response to Hurricane Michael.  The roughly 2-hour long program focused on disaster assistance information from U.S. Department of Agriculture (USDA) agencies including the Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS), Rural Development (RD), Risk Management Agency (RMA), and National Agricultural Statistics Service (NASS).  Additional information was presented by the Georgia Forestry Commission, Southwest Georgia Farm Credit, and Georgia Department of Behavioral Health.  Congressman Austin Scott provided remarks and answered questions at the end of the session.

Presentation slides (where available) and a video of the event are provided in the links below.

Video of the disaster assistance information session (provided by The Georgia Peanut Commission)

Agenda:

  • Welcome by Tas Smith, State Executive Director, Farm Service Agency
  • Opening Comments by Adam Rabinowitz, Ag Economist (Moderator), University of Georgia
  • Farm Programs Update by Brett Martin, Chief, Farm Programs, Farm Service Agency (Presentation Slides)
  • Farm Loans Update by Dean Lewis, Farm Loan Specialist, Farm Service Agency (Presentation Slides)
  • NRCS Update by Terrance Rudolph, State Conservationist, National Resource Conservation Service (Presentation Slides)
  • RD Update by Joyce White, State Director, Rural Development
  • RMA Update by Davina Lee, Director, Valdosta Regional Office
  • NASS Update by Jim Ewing, Regional Director, National Agricultural Statistics Service (Presentation Slides)
  • GFC Update by Scott Griffin, Forest Management Chief, Georgia Forestry Commission
  • Loan Overview by Paxton Poitevint, Chief Executive Officer, Southwest Georgia Farm Credit
  • Health Related by Jennifer Dunn, Regional Services Administrator, Georgia Department of Behavioral Health
  • Congressional Update by Congressman Austin Scott
  • Wrap-Up by Adam Rabinowitz

Additional Resources:

University of Georgia Emergency Resources

NRCS disaster information page for Hurricane Michael.

Georgia Organics The Farmer Fund – support for farmers in the face of natural disasters.

Georgia Vegetable Estimated Losses Due to Hurricane Michael

By Esendugue Greg Fonsah, Andre da Silva, Bhabesh Dutta and Timothy Coolong

The UGA Vegetable Team recently conducted damage assessments aimed at preparing a comprehensive report to determine the potential losses incurred to the Georgia Fruit and Vegetable Industry caused by the hurricane Michael. Calculations were based on the information gathered by the Vegetable Assessment Team, growers and county extension agents during farm visits in southwest Georgia. Total acreages, estimated percentage of damaged field, yield losses, and current prices for the various vegetable crops were taken into consideration.

There were significant losses per crop across the state of Georgia, but nothing compared to losses incurred in southwest Georgia, where most of vegetable crops are produced in the state. A portion of early maturing fall crops had already been harvested before hurricane Michael makes landfall. However, the majority of crops were still in the field, which increased losses to Georgia vegetable growers. For instance, bell and specialty pepper, eggplants, tomato, sweet corn, squash, and cucumbers sustained approximately 70 – 90% losses in the most impacted areas while other vegetables like cabbage, greens, snap beans and broccoli sustained damages from 20 – 50%.

Our estimate thus far depicts a total loss of $480.31 million to the Georgia Vegetable Industry. According to the Vegetable Team report the vast majority of initial crop damage was caused by the strong winds, which resulted in lodging or defoliation of plants. Further, damages were sustained after the hurricane due to “sunburn” of exposed fruit. This is because most of the foliage in crops were either damaged due to the strong winds.  It is projected that the secondary damage and losses will exceed initial losses caused by the hurricane. Losses were exacerbated due to power outages, which prevented growers from properly cooling or storing harvested produce.  Power outages also impacted the ability to irrigate crops remaining in the field.

These values are subjected to changes as it does not include property losses. Losses caused by hurricane Michael left a devastating blow not only to our farmers, but equally to the community and the Georgia economy at large.

For more information contact the Vegetable Team Members:

Dr. Esendugue Greg Fonsah, Professor and Fruits and Vegetable Extension Economist, Department of Agriculture and Applied Economics, Tifton, GA 31793. Email: gfonsah@uga.edu Tel: 229-386-3512.

Dr. Bhabesh Dutta, Assistant Professor and Extension Vegetable Disease Specialist, Plant Pathology.  Email: bhabesh@uga.edu Tel: 229-386-7495.

Dr. Timothy Coolong, Associate Professor specialized in vegetable production, Horticulture Department, University of Georgia, Athens, GA 30602.  Email: tcoolong@uga.edu  Tel: 229-386-7495

Dr. Andre Luiz Biscaia Ribeiro da Silva, Assistant Professor specialized in vegetable production, Horticulture Department, University of Georgia, Email: adasilva@uga.edu  Tel: 229-386-3806

Preliminary Estimation of Cotton Damages from Hurricane Michael

By Yangxuan Liu and Amanda R. Smith

Download the PDF version of this article. 

Hurricane Michael unexpectedly gained power and quickly grew into a Category 4 storm overnight, which made it nearly impossible for Georgia cotton farmers to prepare and respond. Much of Georgia’s cotton had been defoliated and was ready for harvest before Hurricane Michael hit on October 10, 2018.

Prior to the hurricane, USDA estimated that only 12% of cotton was harvested and 88% of cotton bolls were opened in Georgia. These opened bolls of cotton on the stalk were exposed and susceptible to the wind brought by Hurricane Michael. Some harvested cotton modules in the field were damaged by wind and rain, which might degrade quality. The cotton harvested after the hurricane might face quality discounts as well, because more mature bolls of possibly higher quality were lost.

The UGA Cotton Team and County Extension Agents have been working hard to determine total crop losses for Georgia cotton farmers and provide them support during these difficult times. Crop losses varied significantly across the state. The southwest region, where the heart of cotton production is centered, was affected the most. Cotton farms directly in the path of the hurricane suffered from tremendous loss. In some cases, total crop losses have been reported by cotton producers in the southwest region of the state, while losses in the northwestern part of the state were lower.

UGA Cotton Agronomist, Dr. Jared Whitaker, collected handpicked field data from agents, specialists and cotton farmers across the state to determine yields before and after the hurricane. As of October 19, losses documented from handpicked field data range from 1% to 81%, depending upon location and days after defoliation.

“Observations at UGA’s Stripling Irrigation Research Park, which is located near Camilla in Mitchell County of Georgia, show that maturity of cotton played a big role in crop losses,” said Dr. George Vellidis, UGA Crop and Soils Scientist. “Cotton, which had already been defoliated 10–14 days and was ready for harvest, suffered more severe losses,” said Dr. Vellidis.

UGA Economists, Drs. Yangxuan Liu and Jeff Dorfman, worked with Dr. Whitaker to estimate the losses for Georgia cotton farmers based on the data collected from specialists, County Extension Agents, growers, cotton gins and USDA. “We took into consideration yield loss variation across the state and adjusted our estimates accordingly,” said Dr. Liu, “Our initial estimates of farm gate value loss from Hurricane Michael range from $550 million to $600 million for the Georgia cotton industry. This includes losses related to cotton lint, cottonseed, and fiber quality reductions. We are still in the process of gathering more data from cotton farmers and county agents. Our estimated value of loss for cotton is still preliminary. As more data is collected, we will update these values accordingly.”

“We greatly appreciated Georgia County Extension Agents, cotton farmers and cotton gins in working together with the UGA Cotton Team to estimate yield losses,” said Dr. Whitaker.

Dr. Dorfman added “The impact of Hurricane Michael will extend beyond the farm gate level. Cotton gins, local communities and the entire Georgia economy are likely to experience the ripple effect of Hurricane Michael for years to come.”

Cotton was not the only crop affected by the hurricane and most farm operations are diversified with a variety of crops that also experienced losses. When reflecting upon the farm as a whole, our colleague, Dr. Esendugue Greg Fonsah, UGA Fruits, Vegetables and Pecans Economist, said it best: “Our hearts go out to all of the hardworking farmers and affected communities who are going through these difficult times.”

 

For more information, please feel free to contact:

Jared R. Whitaker, Cotton Extension Agronomist, Department of Crop and Soil Sciences, University of Georgia, Tifton, GA 31793; jared@uga.edu Tel: 229-386-3006.

Yangxuan Liu, Assistant Professor and Cotton Extension Economist, Department of Agricultural and Applied Economics, University of Georgia, Tifton, GA 31793; Yangxuan.Liu@uga.edu  Tel: 229-386-3512

Jeffrey H. Dorfman, Professor, Department of Agricultural and Applied Economics, University of Georgia, Athens, GA, 30602; jdorfman@uga.edu Tel: 706-542-0754

Pecan Preliminary Estimated Losses Due to Hurricane Michael

By Esendugue Greg Fonsah, Lenny Wells and Jeffrey H. Dorfman

Continuous assessments of the impact of Hurricane Michael by the Georgia Pecan Team shows approximate acreages, trees and values lost as a result of the hurricane. Our assessment depicts that at least 17% of the total Georgia pecans equivalent to 27,455 acres or 741,285 trees were lost. Our preliminary estimate shows that the current crop loss is $100 million and the tree loss is $260 million while the loss of future income is $200 million. Summing these up reveals a total loss of $560 million to the Georgia Pecan Industry as a results of Hurricane Michael. These values are preliminary and subject to change as more data is gathered.

According to Lenny Wells, “one of Georgia’s most popular pecan varieties is ‘Desirable’, which is a favorite of both the gift pack and export markets due to its large size and high quality. There was a high percentage of ‘Desirable’ pecans grown in the Dougherty/Lee/Mitchell County area, which suffered some very severe losses.” However, growers in those ‘Desirables’-heavy counties still have enough trees to keep them operational while they start replanting to replace the fallen trees. ‘Desirables’ are difficult to grow and manage in the warm, humid climate of Southwest Georgia. As a results, most of these farmers, who have been in the pecan business for generations, will replant their groves with more scab resistant, lower cost, and easily grown varieties.

This loss will impact not only our farmers, some of whom have been growing pecans for generations, but also the community and entire Georgia economy.

Our hearts go out to the hardworking pecan farmers and affected communities as they go through these difficult times.

For more information, contact the Georgia Pecan Team:

Lenny Wells, Associate Professor and Extension Horticulture Specialist for pecans, University of Georgia, Tifton, GA 31793; lwells@uga.edu Tel: 229-386-3424.

Esendugue Greg Fonsah, Professor and Extension Agribusiness Extension Economist, Fruits, Vegetables and Pecans, University of Georgia, Tifton, GA 31793; gfonsah@uga.edu Tel: 229-386-3512

Jeffrey H. Dorfman, Professor, Department of Agricultural Economics, University of Georgia, Athens, GA, 30602; jdorfman@uga.edu Tel: 706-542-0754

Information on Disaster Assistance Programs

By Adam N. Rabinowitz

Click here for a PDF version of this post.

Last week Hurricane Michael ripped through the heart of Georgia agriculture, devastating the southwest region and destroying a significant amount of our farmers’ hard work.  While government programs can never fully replace the loss, there are a number of resources that are available to help farmers recover from disasters.  Some general tips and good practices include:

  • Collect documentation! Prior to starting any cleanup activity, make sure to take pictures of damage and losses that have occurred.
  • If you have crop insurance, contact your crop insurance agent to report losses or damages. It is important to do this before starting any cleanup activities so that everything can be documented properly.   Furthermore, farmers need to notify their crop insurance agent within 72 hours of discovery of a loss.  Beyond that, farmers should make sure that a signed written notice is provided within 15 days of the loss.
  • If you have noninsured crop disaster assistance or are eligible for other disaster assistance programs, contact the local FSA office. It is important to do this before starting any cleanup activities so that everything can be documented properly and a waiver can be issued prior to cleanup.

Important Disaster Resources

The USDA has a disaster website for Hurricane Michael that can be accessed at: https://www.usda.gov/topics/disaster/storms.  At that link there is information on FEMA and other disaster programs.  There is also a more direct resource related to agriculture that can be accessed at: https://www.farmers.gov/recover.  Some of the disaster assistance programs potentially applicable to hurricane losses include:

More information about each of these programs can be found at the above websites.  In addition, there have been some specific disaster related questions which are answered below.

  • What is the next step(s) after receiving crop damage? (reporting claims, documentation, etc.)

Depending on the program, contact either your crop insurance agent or local FSA office.  Make sure to take pictures of the damage and do not burn any debris.  An adjuster or FSA representative will need to survey the damage, thus it is important to wait before starting any cleanup until this has happened or permission to cleanup has been granted.

Keep in mind certain crop insurance deadlines.  Notice to your crop insurance agent must occur before abandoning a crop within 72 hours of a loss.  A written notice needs to be signed within 15 days of loss.

In addition to documenting the damage and loss, keep track of expenses related to cleanup.  It is advisable to keep records of all activities related to the disaster.

  • Do farmers have to pick the crop (in certain situations)? (requesting an appraisal, pros/cons of picking vs. taking the appraisal)

This is a difficult question that depends on individual circumstances.  Some issues that need to be considered is whether there is any salvage value of the crop and the quality of anything that can still be harvested.  If it is a good crop then it should be harvested.  The farmers crop insurance agent can help make a determination of how to proceed.

  • If you don’t pick the crop, how bad will it hurt the established yield?

If there is crop available to pick and you choose not to then it will count against the loss.

  • What if a farmer has an FSA loan on a structure that was damaged?

Contact the local FSA office immediately to report this damage.

  • What additional disaster relief may become available and when?

After many natural disasters that result in widespread damage there are often additional programs that become available to aid with agricultural losses.  This, however, is not guaranteed and it does take time before they are available as they require a special appropriation from the U.S. Congress and signature of the President.  One such example is the 2017 Wildfires and Hurricanes Indemnity Program (WHIP) that covered losses from Hurricane Irma that caused widespread damage in September 2017.  Allocation for that program was not made until February 9, 2018 as part of the Bipartisan Budget Act of 2018.  Sign up for that program did not begin until July 16, 2018.

While a special allocation may not be immediately available, it is important to document losses and to communicate to your legislators in a way that illustrates the impact that Hurricane Michael has had on your farming operation.  This information will help drive policy decisions and additional allocations that may become available.

 

Disclaimer

The information provided in this document is not a specific recommendation.  Producers should make disaster assistance decisions in consultation with their crop insurance agent local Farm Service Agency or other government entity responsible for program administration.

 

Hurricane Michael Hit Georgia Pecans Industry

By Esendugue Greg Fonsah, Doug Collins, Lenny Wells and Will Hudson

Hurricane Michael arrived the heart of Georgia pecans producing areas in the early morning of Wednesday October 10, 2018 and left a devastating blow to the entire industry.  Speaking with County Agents and Specialists, Mitchell, Lee, and Dougherty Counties that contribute to a third of total Georgia pecans suffered close or more than 50%.  The hurricane came at the most vulnerable time imagine.  Pecans crops that were close to harvest were destroyed.  Several pecan trees and nuts were knocked down.   Other producing areas such as Peach, Crisp, Leesburg and Bainbridge were affected with varying losses ranging from 20- 40% according to initial reports.  There were also structural damage.  Although initial loss is valued at about $200 million, this might change quickly after a comprehensive assessment is carried out.

Courtesy of Dr. Lenny Wells.