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Storms muddy 2006 ag forecast, particularly timber

Industry analysts predicted a bountiful 2005 harvest season in Mississippi, with nearly all of the state’s agricultural crops reaping high yields.

Before Hurricane Katrina struck Mississippi August 29, cattle prices had held high and timber prices were favorable. The poultry industry was experiencing burgeoning growth, and by the last week of August, most of the state’s corn crop had been harvested. Fruit and vegetable growers reported a “very good summer” as they were preparing for fall crops. Dairy and beef producers were readying for winter forage, and some had just planted winter grazing to provide a high level of nutrition and energy for cattle during the winter season. Agriculture and forestry reports indicated an overall good year.

“Then Katrina and Rita struck,” said Mississippi Department of Agriculture and Commerce chief Lester Spell. “Immediately, the economic dynamics drastically changed for the worse.”

Within hours, the state endured more than $1.3 billion of timber damage, much of which was not worth trying to salvage because of the shearing and breaking damages from the storms. The loss represents nearly three years of timber harvest.

Even though only 6% of the nation’s forest is Southern pine, 58% of all wood products produced in the U.S. come from Southern pine.

“Thousands of timberland owners watched their retirement investment and their hopes for providing college educations for their families lying destroyed on the ground,” said Spell. “Even though forestry does not fall under (MDAC), our agency received hundreds of calls asking for some form of financial help from those who lost so much of their timber assets. Because I view timber as a crop, our agency recommended a plan to help timberland owners recover some of their financial losses and encourage reforestation by private landowners. This plan is similar to disaster assistance that has been used in the past for other crops.”

When the storms hit Mississippi, most wood storage yards were already near capacity with the 2005 harvest. Harvesting crews had already made commitments and were not readily available to help timberland owners with smaller tracts of land.

Timber prices plummeted overnight.

In a natural disaster, only 15% to 25% of damaged timber is usually harvested, and recently some timber specialists have placed the percentage of salvageable timber nearer to 15, said Spell.

Poultry houses were damaged; more than 200 of them were completely destroyed. For several days, feed delivery trucks could not deliver feed to poultry farms because of power outages at some mills and the inability to maneuver tree-blocked roads. Electricity was still essential for poultry houses to pump water, operate fans and feeders and to control temperatures.

“Dairy farms could not be reached with trucks to pick up milk, and limited on-farm capacity to store and cool milk meant that dairy farmers had no choice but to pour out thousands of gallons of milk,” said Spell, shaking his head. “Not all farms had generators capable of sustaining their operations, and even where there were generators of adequate capacity, diesel fuel was always difficult to obtain and often impossible to find.”

Farmers harvesting storm-damaged crops had to greatly reduce their speed in the fields because of wind-downed crops, which increased harvesting time and fuel consumption three-fold.

“Not only did fuel become a scarcity for all of agriculture and forestry operations, it became outrageously costly,” said Spell. “During a meeting in Laurel after the storms, farmers gathered to tell their personal accounts of the storms’ effects on their families and their crops to U.S. Secretary of Agriculture Mike Johanns. Mississippi farmers told him about personal farm losses and also expressed concerns over sudden increases in fuel costs with much harvesting yet to be done. One farmer said he had received a phone call the night before from his diesel supplier, who told him that diesel fuel would be 50 cents per gallon higher the next day.”

Similar situations plagued all segments of agriculture and forestry following the storms.

“Most of the state experienced drought conditions after the storms and dairymen, beef cattle owners and horse owners not only lost their planned early-winter grazing, but pastures became parched and hay crops also failed,” said Spell. “Often, cattle and horses had to be confined in small lots or pastures since fences were destroyed from downed timber and debris. Some dairy and beef farms sold their herds at less than fair market value because they did not have enough fenced pasture or hay to maintain the herds, and because the cost of commercial feeds made it economically impractical to try to maintain herds on bought livestock feed for an extended period.”

Mississippi’s combined forestry and agricultural production losses and damages exceeded $2 billion, “a catastrophic loss to Mississippi’s largest industry and to the economic benefits it provides to the state,” he added.

Immediately following the storms, Gov. Haley Barbour established the Governor’s Commission on Recovery, Rebuilding, and Renewal, with the Agriculture, Forestry, and Marine Resources Committee chaired by Sanderson Farms’ Joe Frank Sanderson. The report, due December 31, will address both state and federal actions that are important in revitalizing those segments of the agricultural and forestry industry that sustained great losses.

“What is likely to happen in the next two to three years? Our loss in the dairy industry is not likely to be regained,” said Spell. “The same is true for a small percentage of beef cattle operations.”

Without significant reforestation incentives for the timber industry, substantial economic losses will endure for decades, and even though row crops will continue to be strong in the state, crops such as corn, which requires high nitrogen levels, will be reduced because of increased nitrogen fertilizer costs, he pointed out.

“There are early indications that total rice acreage in the state will be less in 2006 than in 2005,” said Spell. “The nursery industry and fruit and vegetable producers will, I think, see growth and expansion over the next two years. Future fuel and fertilizer costs, along with rising competition from imports, will strongly impact Mississippi’s and the nation’s agricultural outlook.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

About Lynne W. Jeter

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