FARE Blog

Food, Agriculture, and Resource Economics

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.

 

China’s Tariff Impact on Georgia Pecan Industry

By Dr. Esendugue Greg Fonsah

The U.S. and Chinese Trade War will have a negative impact on the Georgia pecan industry if not resolved.  The United States produces 80% of the world’s pecans and Georgia remains the number one producer of pecans with a record 50-70% exported to China for almost a decade (Hargreaves, 2013). The high demand for pecans has also triggered a market distortion from the traditional distribution channel (grower-processor-consumer) to direct marketing and sales.  An additional 15% tariff on nuts and fruits will create a major impact to the Georgia pecan industry as it will increase the cost of pecans, thus reducing the quantity exported to China. That would in turn increase domestic quantities since the bulk of Georgia pecans that were destined to China will be floating in the domestic market.  So far, China remains the main market for U.S. pecans although a small quantity goes to India, South Korea, Turkey and Vietnam (Andrew, 2017).   Although the U.S. might successfully look for alternative markets, it will be difficult for these new/emerging markets to absorb the large volume of stock created by the possible reduction in export to China.  With the large pecan production and acreage expansion currently going on, the domestic market might be flooded and eventually dampen prices.

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