Ritas Effects On Agriculture Pegged At More Than $500 Million

Kurt Guidry, Schultz, Bruce

News Release Distributed 09/30/05

Preliminary estimates of damage to Louisiana commodities caused by Hurricane Rita so far total $507 million, according to an LSU AgCenter report.

Add that amount to estimates of Hurricane Katrina’s damage, and the total exceeds $1.5 billion. No coastal parishes were untouched by Rita, the report says.

The report, compiled by LSU AgCenter economist Kurt Guidry with help from numerous agents in the field, warns that the figures could increase.

"In addition, for many of these commodities, the economic impact of this storm could potentially continue to grow as delays in re-establishing infrastructure exists," the report says. "Therefore, current estimates will likely grow until some type of normalcy is returned to production."

Land that was flooded may not be suited for continued agriculture, the report says, and that could add to the damage total from future revenue losses.

The combined damage total from both storms is approximately 30 percent of the 2004 gross farm value determined by the LSU AgCenter 2004 Ag Summary. But Guidry said the estimate can’t be compared directly to the Ag Summary because some of the damaged commodities, such as timber, would not have been harvested this year, and not all cattle lost from the storms would have been sold this year either. But row crops that are harvested annually can be compared to the Ag Summary totals.

Losses listed in the report on Rita’s damage included:

$226 million in forestry, the largest total of all commodities. The estimate assumes that 30 percent of the downed timber can be recovered but at a discounted price. The 2004 Ag Summary shows forestry’s gross value last year was $1.4 billion, but Guidry cautioned that’s not an applicable comparison because not all of the damaged timber would have been harvested this year.

Sugarcane losses were the second largest at $68 million, or more than a fifth of the 2004 farm value. The total includes losses of recently planted cane, reduced harvest efficiency and broken stalks. The report says the estimate does not include a presumed production loss of 10- percent to 15 percent for the 2006 crop. Farmers will have to consider the high cost of fuel versus the anticipated production decreases caused by the storm when they decide whether or not to harvest some of this year’s crop.

$38 million in cotton losses. The figure includes losses from stained cotton and increased production costs because more defoliant will be needed to control re-growth. The report says higher fuel costs may cause mills to charge a fee for processing cotton, but that extra expense was not factored into the report.

$38 million in losses from crawfish production based on assessments of affected areas. Not included in the total is $57 million in infrastructure damage and saltwater effects on the 2006 crop.

$34 million for fisheries losses, including oysters, shrimp, crab, menhaden and finfish based on 2004 values and estimated losses. Shrimp leads the category with $18 million, followed by $8 million for menhaden (pogies), $3.5 million for crabs, $2.1 million for finfish and $2 million for oysters.

$33 million for cattle. The total includes current market value of lost calves, replacement value for bulls and cows and revenue lost from the forced liquidation of herds because of the lack of adequate pasture lands. But the number does not include lost future income from dead cattle.

Rice losses are set at almost $12 million because of flooding and wind damage to the second crop of rice. In North Louisiana, the remaining first crop was lodged badly. Not included in the total is the amount of rice lost in storage bins that were flooded.

Hay and forage losses are estimated at $9.5 million. The number assumes that hay stored in flooded areas was a total loss, and the forage impact was based on the amount of lost grazing days. The total does not include possible losses from forage production that may be limited on land damaged from exposure to saltwater.

$6.5 million for horses for losses in revenue and increased production costs. It includes pastures affected, horses and owners, damaged fencing and lost revenue from decreased training opportunities.

$6.5 million for alligators, including acreage affected and production losses. It is estimated that infrastructure damage totaled $13 million. Also, it’s expected that the 2006 crop will be reduced because of the effects of saltwater.

$5.6 million for pecans. It does not include lost trees or increased production costs.

Other losses are set at $9.4 million for hunting leases, $7.2 million for charter fishing, $3.5 million for damage to soybeans, $1 million for Christmas trees, $89,000 for dairy, $2.5 million for poultry, almost $400,000 for vegetables, $1.4 million for wholesale nursery plants, $1.5 million for citrus, $595,000 for honey and $1.2 million for turtles, catfish, ornamental fish and softshell crabs.

Guidry said producers probably will be eligible for government assistance. After Hurricane Katrina, the Louisiana congressional delegation had written a bill to provide financial help to farmers, but now that will have to be revised to add Hurricane Rita’s impact.

Congressional staff members suggest Congress could approve a hurricane disaster aid package by the end of October, Guidry said.

"Right now, there is limited assistance for producers," he said.

The federal disaster declaration makes farmers eligible for low-interest loans, cost-sharing programs and payment deferral for debt to the Farm Service Administration, Guidry said. Also, the Natural Resources Conservation Service will help dispose of dead animals, he said.

The LSU AgCenter canceled a workshop set for Oct. 6 to advise farmers on financial management issues, and now a program is being planned to advise farmers on coping with the disaster.

"It’s a tough situation for all producers," Guidry said. "We had concerns about producers in Southwest Louisiana even before the first hurricane."

Many farmers had diversified with crawfish and cattle to provide additional cash flow, he said.

"But now what do they do?"

And the lingering effects of flooding from sea water may jeopardize the future of farm operations in coastal areas, Guidry said. "It makes a tough situation even worse. It’s going to be a tough fall and winter for these guys."

10/5/2005 1:50:54 AM
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