Kurt Guidry, Blanchard, Tobie M.
This publication tabulates the value of Louisiana agriculture in 2020. Agents and specialists of the Louisiana Cooperative Extension Service, as well as other agencies – both private and public – compiled the data. Their analysis focuses on the animal, forestry, fisheries, plant and wildlife commodities that comprise our vital agricultural industry. Agricultural and natural resource industries contribute significantly to our state’s economy with the potential for increased economic benefits and job creation through value-added processing in urban and rural communities throughout Louisiana.
The food and fiber sector faced a significant number of issues and challenges during the 2020 calendar year. The year started out with the emergence of COVID-19 and quickly developed into a pandemic. This created significant uncertainty in markets for most food and fiber markets as shutdowns and disruptions in processing and movement of commodities through normal marketing channels impacted supplies as well as overall demand. For those commodities which rely heavily on away-from-home consumption as a large portion of their overall demand, forced shutdowns to restaurants and other food service operations significantly impacted demand and product movement. For other commodities, forced quarantines caused disruption in processing and shipment of products which impacted both available supplies and overall demand. While all agricultural commodities faced some level of impact from the uncertainty and disruptions caused by the pandemic, the commodities in the state that were likely most heavily impacted were seafood, crawfish, poultry, beef cattle, and dairy. Again, these commodities rely heavily on restaurants and food service as a significant component of their overall demand. In addition, shutdown of major processing facilities for poultry and beef due to forced quarantine significantly disrupted normal operation of marketing channels. Fortunately, federal assistance was made available to commodities impacted by COVID-19 to help limit the financial impacts and maintain those industries.
If dealing with a major pandemic was not enough, the state was also hit by three hurricanes during a period from August to October 2020. Hurricane Laura hit the state in August 2020 as a Category 4 hurricane in the southwest corner of the state and then tracked the western edge of the state, maintaining hurricane force winds to the Arkansas-Louisiana line. In early October 2020, Hurricane Delta hit the state as a Category 2 hurricane in nearly the identical location as Hurricane Laura but then tracked to the central part of the state before taking an easterly turn. Finally, in late October 2020, Hurricane Zeta hit the state as a Category 2 hurricane in the southeastern portion of the state before tracking along with southeastern edge of the state. Each of the storms created different impacts for the food and fiber sector. While there were some impacts to yield and production to certain commodities from Hurricanes Laura and Delta, the biggest impact from these two storms was the amount of damage to infrastructure across the entire food and fiber sector. In addition, the timber industry saw significant damage as high winds downed a large volume of timber throughout the paths of both storms. For Hurricane Zeta, given its path through the state and its quick movement, damage was much more limited with the largest impacts likely to the fisheries sector.
Despite the issues and challenges created by the pandemic and the storms, food and fiber production in the state continued to march forward. As indicated, while the storms caused significant damage to infrastructure, they caused relatively minimal damage to yields and production, particularly considering the size and nature of the storms. Prior to the storms, weather conditions were generally favorable for agricultural production and relatively favorable conditions after the storms and through harvest for many commodities helped limit the overall impact on agricultural production. In fact, given the improved weather conditions during the growing season and harvest as compared to the previous year, there were several commodities that experienced year-over-year increases in yields. Yields in 2020 were reported higher for all of the feed grains, rice, soybeans, and sugarcane. For other commodities like cotton and sweet potatoes that did not experience year-over-year increases, yields in 2020 were still close to the previous year and certainly in line with 5 year and 10 year averages.
As seen with production levels, commodity prices for many of the major row crop commodities were either steady or higher than the previous year despite the uncertainty and market volatility created by the pandemic and, to some extent, by the storms in 2020. Much of the year-over-year increase in commodity prices is likely explained by the low prices experienced in 2019. While the pandemic and storms likely had negative impacts for price movement, prices were still able to surpass the low levels experienced in 2019. Also, as different parts of the world implemented stricter policies and protocols for managing COVID and as international trade flows became disrupted, it allowed for some opportunities for the United States to gain export share of certain commodities and supported prices. For some commodities, like rice, sharp increases in domestic demand were seen as consumers were forced to have more of their food consumption at home and incorporated more rice into their meals. And general inflationary conditions in the US economy that started to materialize in 2020 likely helped to also push prices for some commodities higher. Prices for rice, soybeans, grain sorghum, sugarcane, and sweet potatoes all increased in 2020. Prices for many of the fruit and vegetable commodities were also higher as in-home consumption and demand for those products rose due to the pandemic. Prices for corn, cotton, and wheat were all lower in 2020 versus 2019 but the decrease in prices were relatively minimal for those commodities.
Prices in for the livestock sector were mixed in 2020. Beef cattle, sheep, and goats all experienced year-over-year increases across all classes. For those commodities, supply and demand dynamics heading into 2020 all pointed to higher prices. And while those markets were certainly negatively impacted by the pandemic, the strong supply and demand situation heading into the year helped to counteract those negative impacts and still generate year-over-year increases. Prices for other livestock commodities, like broilers and swine, were not as fortunate and experienced year-over-year decreases. For those commodities, the disruptions caused by the pandemic along with some already concerning supply and demand dynamics helped to push prices down. For other commodities like horses, prices remained stable in 2020 versus the previous year.
Prices for the fisheries and wildlife enterprises were also mixed. Fisheries prices for shrimp and wild caught crawfish, were up significantly from the previous year while prices for oysters and soft-shell crabs were up marginally. Prices for crabs, freshwater fish, and menhaden were down from the previous year. It should be noted that production and prices reported for fishery commodities have a one-year lag. So, prices and production reported are for the 2019 production season and do not reflect the impact of the pandemic. Farm raised crawfish prices were down in 2020 from the previous year as impacts from the pandemic impacted not only the level of production that producers were able to market but also the prices they received. Prices for both farm raised and wild alligators were also slightly down in 2020. It should be noted that alligator prices are now reported on a price per alligator basis versus previous reports which reported prices on a price per foot basis. Changes in the manner in which alligator information is collected and received by the Louisiana Department of Wildlife and Fisheries necessitated a change in the units in which alligator prices are reported. In both cases, however, softness in the demand and market for hides resulted in slightly lower overall values for alligators harvested in 2020. Finally, reductions in the price for fur animals and honey were also experienced in 2020 as overall demand and interest in those commodities decreased slightly in 2020.
As is the case in most years, there are some commodities in 2020 that performed well both from a production and price standpoint and other commodities that faced significant challenges. This resulted in total gross farm values for different commodities and different commodity groups to vary significantly. Total gross farm value across all plant enterprises was up (4 percent) from the previous year. Steady to slightly higher yields for most commodities along with improved prices help to offset the slight reduction in total forestry values experienced in 2020. Gross farm value across all fisheries and wildlife enterprises was down nearly 9 percent from the previous year. Despite prices being up for many fishery commodities, lower catch levels helped to bring the total gross farm value down in 2020. Finally, the gross farm value across all livestock enterprises saw a 3 percent decrease from the previous year. Impacts from the pandemic along with lower overall production and sales were the primary factors resulting in lower gross farm value.
When the commodities produced by agricultural producers are cleaned, processed, and packaged at the next stages of the marketing channel, these value-added activities create additional economic activity over and above that defined by the gross farm value. In 2020, these value-added activities were estimated to have an additional economic impact of $4.97 billion. Taken together, the gross farm value and value-added activities were estimated to have a total economic impact of nearly $10.91 billion. This represents a 2.21 percent decrease from 2019. Given the level of economic activity that the state’s agriculture, forestry, and fishery industries continue to generate each year, it is undeniable that they continue to be major contributors to the overall state’s economy. Cutting-edge research programs and extension education and outreach efforts of the LSU AgCenter remain critical to sustaining these economic benefits.
Many Louisiana communities depend on agriculture, forestry, fisheries and wildlife for local jobs and their economic well-being. However, for those who work in it day in and day out, agriculture, forestry and fisheries are far more than a business, a major job contributor and an economic engine. It truly is a way of life. Families have lived on many of these farms, forest lands or fishing villages for generations following a preferred way of life even though it means hard work, many hours, high risks and sometimes low incomes.
Each new production season has risks associated with commodity prices, trade agreements and higher input costs as well as uncertainty related to the weather. These conditions make the discovery and adoption of new agricultural technology developed by the LSU AgCenter more important than ever to our state’s producers. Agriculture is a highly sophisticated segment of the national and world economy, becoming increasingly so every year. That is the reason we at the LSU AgCenter continue to support agriculture and consumers with factual information provided by a well-trained faculty of extension agents, specialists and research scientists.
Those of us in the LSU AgCenter, with its major branches of the Louisiana Cooperative Extension Service and the Louisiana Agricultural Experiment Station, are proud to be part of Louisiana’s agricultural industry, and we are committed to serving that industry and the citizens across the state of Louisiana in the years ahead.
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