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Flooding to cost Arkansas agriculture over $500 million?

Flooding to cost Arkansas agriculture over $500 million?
Flooding costs to Arkansas crops/forage expected to top $500 million. Figure does not include infrastructure repairs/replacement. 63 Arkansas counties declared disaster areas.

With more than 1 million acres of Arkansas cropland underwater, the impact of flooding to Arkansas crops and forage is expected to top $500 million dollars, according to preliminary research by agricultural economists at the Arkansas Farm Bureau.

A total of 63 counties in Arkansas have been declared disaster areas as a result of storms and flooding that have ravaged the state since late April. As the state’s largest industry segment, agriculture annually accounts for $16 billion of Arkansas’ economy, so any significant impact will have effects far beyond the farmers’ and ranchers’ direct losses.

“We are seeing flood levels never seen before,” said Randy Veach, a cotton, rice and soybean farmer from Manila (Mississippi County), who is president of the Arkansas Farm Bureau. “The effect to our state’s commodity crops is staggering, and the entire impact can’t be adequately determined for several months.”

Veach noted the Farm Bureau’s estimate does not include costs to repair infrastructure, farm equipment, loss of grain in storage bins, and repairs to farmland, which could reach well into the tens of millions of dollars.

“We aren’t likely to see significant activity in these flooded areas until June 1, at the earliest,” said Warren Carter, director of commodity and regulatory affairs for Arkansas Farm Bureau. “There is an awful lot of water that still has to move through our river systems, and significant drying will have to occur before our farmers can begin the difficult work of reworking their ground.

“There is no way to overstate the impact of this to those affected. It has been devastating.”

Carter said he expects the loss in rice acreage to near 300,000 acres, resulting in a loss of $300 million in rice production. Arkansas is the largest rice-producing state in the nation, annually accounting for about half of the nation’s rice crop.

Carter noted that much of the loss of the commodity crops could be offset by plantings of other crops. Soybean acreage, as an example, is expected to skyrocket, because the planting window for that crop is significantly wider than for rice, cotton, corn and grain sorghum. However, late-planted crops are susceptible to a number of additional risks, including early frosts, hurricane season, insect and disease issues and other problems. This makes the replacement value of those crops difficult to assess.

Arkansas was projected to plant 1.3 million acres of rice in 2011. Some of the rice crop already planted could survive the floods, though reduced yield and quality issues will likely limit the value of that crop further.

“Forty percent of the national rice crop likely won’t be planted this year,” Carter said, citing flooding issues in the Bootheel area of Missouri and Louisiana, two other sizable rice-producing areas.

Carter also noted the impact to the winter wheat crop that is nearing harvest. Arkansas farmers had planted roughly 550,000 acres this year, and the Farm Bureau estimates that 120,000 acres of that wheat will be abandoned due to the flooding, resulting in a loss of $40 million that won’t be replaced by other crops.

Other significant losses are forecast for cotton, with reduced yield losses projected at $66 million; plus another $35 million in added costs to get this year’s cotton crop in the ground, including fertilizer, fuel, herbicides, etc. Additionally, a loss of roughly $37 million is being projected in forage, hay and fencing. The Farm Bureau estimates roughly 6,000 miles of fencing will require repair or replacement.

“I know the resiliency of Arkansas farmers,” said Veach. “They are unnaturally optimistic. They accept risk that most people would not begin to deal with. And while I expect Arkansas agriculture to overcome this, the effects of this disaster will be felt for years to come.”

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