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Ag production looked good in 2005… until Katrina, Rita

Mississippi’s agriculture community perhaps had never been more optimistic than it was at the beginning of 2005. After all, in 2004 in-state ag commodities set an all-time high as prices remained relatively strong across the board.

They were still grinning when 2005 dawned, enjoying many of the same advantages afforded in 2004. That is, until August 29, 2005. No industry, not even gaming, suffered more catastrophic losses than agriculture from Hurricane Katrina. And, there was no relief through the rest of 2005.

Katrina was followed by drought, which was interrupted briefly by Hurricane Rita’s torrential rains. Drought returned thereafter and held sway until year’s end.

Obviously, the loss of facilities and product was devastating to ag producers, particularly those in South Mississippi. However, the cost of getting the product off the farm and to the shelves was where a new, unfortunate precedent was set, according to Patrick Sullivan, director of market development at the Mississippi Department of Agriculture and Commerce.

“The hurricanes affected yield, but the real story was cost of harvest,” Sullivan said. “This state had never seen a cost of harvest that high before — nothing even close to it.

Not only did the destruction add to the costs, but also the price of diesel just skyrocketed, which added to the difficulty and expense.

“We had record yields going until Katrina. And, what Katrina didn’t impact, Rita did. Simply put, it was a disaster.”

The dairy industry illustrates the losses and headaches caused by last year’s storms that transcended destroyed facilities and product. Located primarily in the south central part of the state, dairy farmers’ biggest challenge was loss of electricity. Without it, milk ruined. Yet, the cows had to be milked nonetheless. So, farmers would dump out the milk that they had already harvested, which would have ruined any way, to make room for more milk that would never make it to market, either. According to the Mississippi State University Extension Service, the loss to Mississippi’s 175 dairy farms totaled $21 million, or approximately $120,000 per farm, and there is concern that the industry lost so much critical mass that its very existence is threatened.

Fortunately, the agriculture news was not all bad. In fact, the industry grew to $6.5 billion in 2005, a new record, despite the adverse weather. And, Sullivan said producers are generally upbeat and optimistic about 2006. Government assistance has poured in, and producers are recovering relatively quickly.

Perhaps the most positive news from 2005 and going into 2006 is the rise of non-traditional fresh food crops, particularly from the Delta region. Sweet corn has found markets in Wal-Marts and grocery stores as far away as Canada. Sullivan said sweet corn acreage would triple this year over 2005. And, leafy produce (greens, mustards, collards, etc.) is being grown in the Holly Bluff area and is finding markets all over the nation.

Sullivan said ag producers are starting to see the silver lining of the storm clouds. “Whenever you have challenges, opportunities are created,” he said. “Producers are looking at new technology and innovation, asking what they can do this year to increase yield and decrease costs for such things as fertilizer and fuel.

“Mississippi farmers are a hardy and resilient bunch”
Here is a glance at the performance of Mississippi’s top 10 ag commodities in 2005:

Chickens rule roost

In 2005, poultry/eggs once again rang in as Mississippi’s number one commodity. The industry brought in $1.98 billion, roughly 30.5% of the entire agriculture industry in Mississippi and approaching the record set in 2004 of $2 billion. Farmers produced approximately 827 million broilers with an average weight of five pounds each, and 1.6 billion eggs were produced.

Poultry prices remain relatively strong, which is the good news. The bad news is the number of chicken houses destroyed by Katrina. Of the non-timber commodities, poultry took the biggest total hit, roughly $130 million. Sanderson Farm Inc.’s numbers paint the picture. The poultry company saw decreased sales and recorded a net loss during the first six months of 2006, and was still negotiating with insurance carriers about recouping its losses from Katrina, estimated at approximately $26 million.

Other poultry companies face the same situation. Full recovery of the industry will take time.

Trees blow in the wind

Forestry kept a firm hold on the number two spot of ag commodities, with a 2005 showing of $1.27 billion, up from $1.11 billion recorded in 2004. Timber was the leading commodity in nearly half of Mississippi’s counties, and of the state’s total land, 61% is devoted to commercial forests.

Unfortunately, a large portion of that acreage is in South Mississippi, and losses from Katrina were staggering. A good year will bring in as much as $1.4 billion. And, that is exactly the estimate of the toll from Katrina.

On the positive front, Congress passed two forestry assistance programs in December 2005, and Georgia-Pacific restarted two idle plants last year to mill salvageable downed timber. Still, recovery here will take years, if not decades.

Cotton tops in row crops

Cotton brought in $697 million in 2005, nearly $100 million more than 2004. However, in 2004, yield per acre hit an all-time high of 1,000 pounds per acre, whereas yield in 2005 was 879 pounds per acre. Harvested acreage in 2005 was 1.18 million acres, compared to 1.09 million acres in 2004, but only 2.16 million bales were produced in 2005, compared to 2.27 million bales in 2004.
vCotton farmers are obviously optimistic that those numbers will rebound as cotton production is up in 2006.

Soybeans have off year

Soybeans were one of the few top 10 commodities to see value drop. In 2005, soybeans brought in $315 million, down from 2004’s value of $334 million. Acres planted were down in 2005 (1.57 million acres, compared to 1.63 million acres) and so was yield (36 bushels per acre, compared to 39 bushels per acre).

However, as with cotton, soybean production is up in 2006.

Catfish make smaller splash

The catfish industry, which has been challenged over the last several years by poor prices and high feed costs, lost ground in 2005. The number of catfish operations fell by 30 in 2005 when compared to 2004, and water acres fell from 103,000 in 2004 to 101,000 in 2005.

Not surprisingly, dollars were down, as well. Catfish brought in $272 million in 2005, compared to $278 million in 2004. However, the number of processing facilities held steady at 13, and Mississippi continues to lead the U.S. in catfish production.

Livestock roaming free

Cattle and calves are another example of the challenges that came with Katrina and Rita. The loss of animals was relatively insignificant, estimated at less than 1,000 head. But, downed fences made management a headache, and the adverse weather destroyed winter grazing.

Still, cattle/calf numbers were up in 2005. Livestock fetched $250 million in 2005, well above 2004’s value of $215 million. The total number of head of cattle remained steady, and the number of mature beef cows in 2005 was up (564,000 versus 541,000). However, the total number of cattle operations fell by 1,000 in 2005 when compared to 2004.

Rice sees healthy growth

Rice moved up a place on the top 10 ag commodity list in 2005 to number seven. The value of the rice crop in 2005 was $134 million, well up from 2004’s $103 million.

Acreage was also up (263,000 acres in 2005, compared to 233,000 acres in 2004), but yield fell significantly (6,500 pounds per acre in 2005, compared to 6,900 pound per acre in 2004).

Corn dollars unchanged

Corn rung in at $120 million in 2005, unchanged from 2004. But, that was not enough to prevent it from falling from seventh to eighth on the top 10 list where it was passed by rice.

Mississippi harvested 365,000 acres of corn in 2005, well off 2004’s 440,000 acres. Yield was also down (133 bushels per acre in 2005, compared to 136 bushels per acre in 2004). So far in 2006, corn production is down, primarily due to the cost of fertilizer.

Hay stacks up

Sometimes overlooked, hay is big business in Mississippi, and it grew bigger in 2005. The hay harvest was valued at $88 million in 2005, up from $84 million in 2004. In 2005, 700,000 acres of hay were planted, producing 1.96 million tons with an average yield per acre of 2.8 tons. All of those numbers were off from 2004.

Hay fields took a blow from the adverse weather. Hay became scarce, and some states donated hay to make up the shortfall.

Horticulture remains sweet

Horticulture remains one of the fastest-growing segments of agriculture. This segment rang in at $79 million in 2005, up from $75 million in 2004. However, the number of floriculture producers fell from 74 in 2004 to 70 in 2005.

A large portion of floriculture producers are located in the southeastern part of the state, and thus felt the full force of Katrina. Not only did producers report a total loss of approximately $100 million, but also a significant loss of market with the destruction of casinos, restaurants, etc.

This was especially difficult since many horticulture operations are small affairs, and thus find it more difficult to swallow significant losses.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.

About Wally Northway

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