Underground pipeline study part of economists work

Frances Gould, Schultz, Bruce

Dr. Mike Salassi, an LSU AgCenter agricultural economist, responds to farmers’ requests for information and analysis on the economic consequences of a wide variety of factors related to farming operations and agricultural production.

In recent years, he has studied such topics as the economic effects of lodging of a rice crop on a farmer’s income and the ramifications of farm bill proposals. His most recent work focuses on how an underground pipeline can affect rice farming operations.

Salassi said the pipeline study began in 2013 after a group of farmers from Acadia, Jefferson Davis and Vermilion parishes asked for help when pipeline companies came calling to obtain rights of way.

Salassi and Dr. Steve Linscombe, director of the Rice Research Station, met with the farmers to identify potential problems created by a pipeline crossing a rice field.

"The existence of an underground natural gas or hazardous liquid pipeline causes real additional costs on rice farming operations," Salassi said. "However, the farmers had nothing on paper to make an argument with.

"I put some estimates together, and we met again, and I developed a report that highlights the magnitude of some of these imposed costs," he said.

Louisiana is laced with pipelines. In the 11 rice-growing parishes of southwest Louisiana, 11,138 miles of pipelines crisscross the landscape – and more are planned.

Salassi said his work includes the three to four years of yield losses from a pipeline trench on a precision-leveled field. "We estimated for just a decline in yields, declining over a four- to five-year period," he said.

Because trenching breaks the hard-pan soil layer, decreasing the water-holding capacity of the field, a pipeline will increase irrigation pumping costs until the land repairs itself in a few years. In the meantime, Salassi said, a pipeline could increase pumping costs by 5-10 percent or more.

"One of the big issues is the effect on existing irrigation systems," Salassi said, explaining the installation of a pipeline through an existing rice field could cause the grower to incur additional costs to reconfigure irrigation lines. While such lines could be installed under the pipeline, boring underground below the pipeline to install irrigation pipe could cost the grower $15,000-$20,000, Salassi said, so installing or rerouting irrigation lines before the pipeline is laid is an issue farmers could negotiate ahead of time with a pipeline company.

Another potential issue is the increased costs of field operations around a field during pipeline construction, such as increased field preparation time and fuel and labor expenses, Salassi said. In addition, existence of farm structures, such as grain bins, in close proximity to underground pipelines could limit any potential future expansion of those structures, since building permanent structures over underground pipelines is prohibited.

The LSU AgCenter economist said the report on the potential effects of pipelines on rice farming operations can be found on the LSU AgCenter’s rice Web page under the economics sections. In addition, a U.S. Department of Transportation website (https://www.npms.phmsa.dot.gov)  provides a map of pipelines in all U.S. counties/parishes.

"Working out in the state with growers to help them solve real problems is what I really enjoy," Salassi said.

As a result, on another topic, throughout 2013 Salassi continued to work on farm bill proposals, studying how they would affect rice farmers.

"We did some analysis, looking at the two basic types of agricultural income support proposed by the House and Senate," he explained. "Revenue support programs, basing support levels on historical market income per acre, do not work as well for rice as the more traditional price support programs.

"Market price risk has always been the most important issue in rice production."

Salassi also continued his work on a study of the economic effects of a lodged rice crop. Results of the study from research conducted in Arkansas, Mississippi and Texas, in addition to Louisiana, will be published in the Agronomy Journal.

"We looked at the effects of lodging with all the varieties in the study averaged together," he said. "It showed lodging could reduce head rice yield as much as 5.5 pounds per hundredweight."

The estimated lodging effect on milling yield across all four states reduced the resulting rough rice market price by 40-50 cents per hundredweight. In addition, lodging also reduces rice yield recovered per acre, as well as increasing costs from the inevitably slower harvest, Salassi said.

An article published in Louisiana Agriculture magazine examined the tests conducted at the Rice Research Station and showed a loss of 28-60 cents per hundredweight, the LSU AgCenter economist said, explaining that three-year lodging study began in 2010 after a talk he had with Evangeline Parish farmer Richard Fontenot.

"Lodging has always been an issue in rice production," Salassi said, adding, however, "There was really no recent data that documented these effects.

"We did this research to provide the rice industry information that might prove useful as various forms of crop insurance receive more attention as potential ways for rice growers to manage production risk ."

(This article was published in the
2014 Louisiana Rice Research Board Annual Report.)

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1/23/2014 8:33:52 PM
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