Drought, low prices affecting economy
Published 12:00 am Saturday, September 18, 1999
Even though they’ve eased out of farming, the Holland brothers are still feeling the effects of tough times in agriculture. Lloyd, Wayne and Owen Holland used to farm 1,150 acres with their father in Concordia Parish, but turned to crop dusting to make their living. They own Ag Aeronautics Service Inc. near Vidalia. “Each year, it kept getting tighter and tighter,” Owen said. “We started out by getting our own plane for our own farm.”
As times got leaner, the Holland brothers started spending more time in the air, dusting for other farmers, and less time working their own land.
But current farm prices are making times tough for anyone associated with the farming industry, Owen said.
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“When farmers have lean years, it gets tough to pay August and September flying bills,” Owen said. At times like that, he said, the farming and flying brothers work with the local farmers as best they can.
“The American farmer is a very patient person. He’s always dishing out money – farming bills and household bills – and nothing ever seems to come to his aid,” Owen said.
Agriculture, which has a more than $34 million impact on the Miss-Lou’s economy, is facing dire times.
Low crop prices and dry weather, combined with the low yields and debt brought on by last year’s drought and corn toxins, have caused many farmers to go further into debt or get out of agriculture altogether.
“What hurts is when you see the national news every other day talking about what a robust economy we have, but farmers aren’t sharing in that growth,” said Gene Johnson, an agricultural economist with Louisiana State University.
And the stakes are high. This year, about 192,200 acres of row crops were planted in Concordia Parish and about 27,056 acres were planted in Adams County, according to federal and Mississippi State University Extension Service figures.
But if tough times continue, farmers likely won’t be the only ones feeling the pinch.
The latest LSU figures show that agriculture in Concordia Parish has a $34.5 million impact on the local economy.
That means every dollar made from producing crops in the parish results in $1.72 being paid to everything from farm workers to local businesses, said David Hughes, an associate professor of agricultural economics and agribusiness at the LSU Agricultural Center.
“Agriculture obviously affects the farm service sector, like pesticide applicators,” Hughes said.
“But it also affects your wholesale and retail trade sectors, everything from eating establishments to furniture stores, and the financial sector, like real estate and banks almost everything ? in Natchez as well as on the other side of the river.”
A dry season
This year, the Natchez area got 3.53 inches of rain in July, down from an average of 4.12 inches, and only 0.72 inches of rain fell in August.
That weakened crops like cotton and soybeans and further weakening farmers finances, which were already hit hard by 1998’s crop problems.
Problems from steadily rising production costs and falling prices are magnified by the lack of rain this year, said Dr. John Lee, agriculture economist with the extension service.
“Some areas of the parish haven’t gotten a lot of rain,” said Glen Daniels, county agent for Concordia Parish. “But the prices are just deplorable. That’s what really killing us.”
Dave Kunkle, who operates Kunkle Seed Co. on Louisiana 15 near Vidalia, can relate to that. He has seen more rice through his grain elevator, but fewer profits this year over last.
“Yields have been good – average to above average, about 140 or more bushels per acre,” Kunkle said. “But last year we got $10 per hundredweight and this year we’re getting $5 per hundredweight.”
“In the new farm bill – Freedom to Farm Bill – you’re not required to set aside any acres,” Kunkle said. “Now the market is flooded and prices are too low.”
Almost 20 of 300 farmers in Concordia Parish, where the bulk of the Miss-Lou’s farms are located, went out of business last year, according to Mississippi State Extension Service estimates.
This year, the U.S. Farm Service Agency in Ferriday has already lent farmers several million dollars to help make ends meet.
“Everyone here knows farmers who have gotten out or might be getting out,” said one USDA employee who works with Concordia Parish farmers.
Hughes notes that government funds will help some farmers survive until they see better crops and commodity prices, in turn helping the areas agricultural economy stay healthy. But he knows that as agriculture goes, so go local economies.
But agriculture is facing hard times. So far this year, Ferriday’s FSA office has made $8.2 million in direct and guaranteed loans to farmers to produce crops and refinance existing debt.
“That’s because after last years disaster, many farmers were not able to meet their obligations,” said Calvin Adams, the agency’s farm loan manager for Concordia Parish.
Adams County’s FSA office has given to farmers more than $1.24 million in crop payments ? money the farmers do not have to pay back, said Stacy McKay, who manages the office100.
Louisiana Central Bank has made more than $6 million in loans to farmers this year and made about the same amount last year, said President Cliff Merritt. And farmers, he said, have a low rate of defaulting on their loans.
“It’s a real struggle for them, though,”&160;Merritt said.
Getting out of the business
Kunkle, who farms rice in addition to running grain elevators that process corn, rice, soybeans and wheat, said he does not expect to break even this year.
He’s hopeful that he can offset some of his loss in poor prices by bringing in a larger harvest. Kunkle has just completed three more large grain storage silos that store a half million bushels combined.
Still, he said, “The way things are going, we may not be around to have this conversation next year.”
If so, he will not be alone. Some other farmers have already gotten out of farming altogether.
The Ferriday-based Macon Ridge Economic Development Region has been contacted in the last year to 18 months by about six farmers seeking advice on what business to go into next, said Macon Ridge Director Buddy Spillers.
“That doesn’t seem like a large number (of farmers), but in this area it is,” he said.
Spillers said two of those farmers have started manufacturing food products, while one opened a retail business, and he said the local economy seems to be supporting their businesses so far.
Macon Ridge suggested that two other farmers with engineering-related degrees go into the plumbing business or other contracting work.
“These guys have put roots down and don’t want to leave the area, they just don’t want to stay in farming any more,” Spillers said.