This year’s drought will cost Georgia farmers an estimated
$689 million on their summer crops, say University of Georgia
agricultural economists.
The drought has also forced farmers to use more irrigation,
driving costs up another $50 million. Growers irrigate 54
percent
of the state’s major row crops. With the higher irrigation costs
added in, Georgia farmers’ total estimated loss this summer is
$739 million — so far.
Losses Estimated on Nine Summer
Crops
“These losses represent about 39 percent of a normal
year’s
production,” said John McKissick, an economist with the UGA
College of Agricultural and Environmental Sciences.
McKissick and a team of economists at the CAES Center for
Agribusiness
and Economic Development calculated the farm losses using U.S.
Department of Agriculture emergency declaration surveys.
The Georgia summer crops included in their loss report are
cotton, peanuts, soybeans, corn, tobacco, pecans, hay, silage
and pastures.
McKissick said the losses in their report comprise a
conservative
estimate. They don’t include the likely significant losses in
fruit and vegetable crops and in ornamental horticulture.
“We also haven’t included the losses resulting from price
discounts due to reduced-quality crops,” he said. Peanuts,
cotton and corn are all expected to suffer price discounts due
to the drought.
Cotton Is Big Loser
The largest anticipated loss is in cotton. The state’s No.
1 row crop should end the season with a $233 million loss.
The next highest losses can be found in crops directly linked
to beef and dairy cattle.
“Pasture losses are pegged at $177 million, hay at $89
million and silage at $3.5 million,” McKissick said.
“These
losses are particularly hard on beef and dairy operations, as
forage crops aren’t generally covered by crop
insurance.”
McKissick said beef and dairy farmers have suffered losses,
too, such as lower weight gains, liquidation of herds and the
costs of replacement feed. These losses aren’t included in the
estimated loss figures.
Farmers Aren’t Suffering
Alone
The farm losses hurt other businesses as well. When farmers
cut down on inputs like fertilizer and other chemicals, the
economy
suffers.
“Each dollar of crop production adds about another 50
cents to the local economy from input suppliers’ employment, and
associated costs ripple through the economy,” McKissick
said.
“Since the drought developed early in the growing
season,”
he said, “not all of the impact will be felt this year.
Fertilizers
and other inputs were purchased and applied before the crops were
planted.”
McKissick says next year may prove to be especially hard for
input suppliers, as some farmers face financial ruin from the
drought.
Crop processors will soon be hit directly by the drought’s
impact. “Cotton gins won’t have enough cotton to gin,
cottonseed
oil processors won’t have as much seed to crush, peanut and
tobacco
warehouses will be partially empty,” he said.
“In the fall, pecan processors will be operating at
partial
capacity,” he said. “All these businesses are directly
dependent on agricultural production.”
