One of many cotton modules destroyed by Hurricane Michael. Photo by Judy Biss
University of Florida PhD candidate Marcelo Calle is conducting research on how agricultural producers manage their farms in times of change. You are invited to participate in this major research survey by taking the online survey linked below.
The results of this survey will help researchers understand “how farmers and farm owners make decisions.” These insights can be used to provide public and private policy recommendations in addition to identifying financial and market risks that farmers deal with on a daily basis. At your earliest convenience, please click on the link below to answer the questions in this short survey.
Use the following this link to the Survey, or copy and paste the URL below into your internet browser:
This survey will take about 9 to 12 minutes to complete. Your participation in this study is voluntary and you can exit the survey at any time. There are no direct risks or benefits for participating in this study and you will not receive any compensation from the University of Florida for participating. We are, however, happy to provide you with an executive summary of the findings.
Thank you for your time.
Agricultural and Biological Engineering Department, University of Florida
Phone: (352) 222 2783
FCA Fence crew volunteers cleared debris to restore fences along highways in Jackson County. Photo credit: Doug Mayo, UF/IFAS Extension
Over the past month every business in the impact zone of Hurricane Michael has felt the anguish of anticipating large expenses that no one had budgeted for. There are a wide range of disaster programs to support both small businesses and farming operations. One of the greatest challenges, however, is the immediate need for cash to get an operation going again. For farmers, the are several disaster programs that provide 75% cost share on things like debris removal, livestock fence repair, and timber planting. The challenge is that you have to pay the expenses first and then turn in the receipts for reimbursement. Whether you need to hire extra labor, contractors, rent special equipment, or make immediate purchases, you may need some cash to get started while you secure the longer-term financing needed to cover theses unexpected expenses. All of the recovery tasks seem overwhelming, but at least there are a number of agencies available to provide assistance. The hard part is making sure people are aware wide range of services that are available to help with disaster recovery. Thus the point of this article, there is a new program available for a short period of time worth getting more information about.
On October 12, Governor Scott activated the Florida Small Business Emergency Bridge Loan Program:
The Florida Small Business Emergency Bridge Loan Program supports small businesses impacted by Hurricane Michael. The bridge loan program, managed by the Florida Department of Economic Opportunity (DEO), will provide short-term, interest-free loans to small businesses that experienced physical or economic damage during Hurricane Michael. The application period runs through December 31, 2018. (Governor Scott extended the deadline)
Governor Scott said, “The damage we have seen from Hurricane Michael is indescribable and unprecedented for the Panhandle. We are aggressively working to restore power in these communities so that our small businesses can get back on their feet. We will do everything we can to help our small businesses – that truly are the heart of the Panhandle. The small business bridge loan program will help small business owners and communities get back up and running and I encourage all affected business owners to apply today.”
DEO administers the Florida Small Business Emergency Bridge Loan Program in partnership with the Florida SBDC Network to provide cash flow to businesses damaged by a disaster. The short-term, interest-free loans help bridge the gap between the time damage is incurred and when a business secures other financial resources, including payment of insurance claims or longer-term Small Business Administration loans. Up to $10 million has been allocated for the program.
Key points of the Florida Emergency Bridge Loans:
For small business up to 100 employees
$25,000 per eligible small business with fewer than 2 employees
$50,000 per eligible small business with 2 to 100 employees. Loans of up to $100,000 may be made in special cases as warranted by the need of the eligible small business.
Have one year to repay loan
Only one loan per business
0% interest if repaid with in a year. 12% interest on the unpaid balance thereafter, until balance is paid in full.
Applications will be accepted through December 31, 2018. (Governor Scott extended the deadline)
7-10 day approval period
Sources for more information about this program:
Call the Florida Small Business Development Center Network – 866-737-7232
Vsit the FEMA Disaster Recovery Center (DRC) near you:
Bay County – DRC #11 – Bay County Public Library 898 W 11th Street, Panama City, FL 32401
Bay County – DRC # 13 – John B. Gore Park 530 Beulah Avenue, Callaway, FL 32404
Calhoun County – DRC #10 – Sam Atkins Park NW Silas Green Street, Blountstown, FL 32424
Franklin County – DRC #2 – Carrabelle Public Library 311 St. James Ave, Carrabelle, FL 32322
Gadsden County – DRC #7 – Old Gretna Elementary School 706 Martin Luther King Jr Blvd, Gretna, FL 32332
Gulf County – DRC #9 – Port St. Joe Library 110 Library Drive, Port St. Joe, FL 32456
Gulf County – DRC #12 Wewahitchka Town Hall 211 Hwy 71, Wewahitchka, FL 32465
Holmes County – DRC #5 – Holmes County Agricultural Center 1169 US 90, Bonifay, FL 32425
Jackson County – DRC #3 – Jackson County Extension Office 2737 Penn Ave, Marianna, FL 32448
Jackson County – Jackson County Mobile DRC Route 6910 Hall Street, Grand Ridge, FL 32442
Leon County – DRC #4 – Collins Main Library 200 West Park Avenue, Tallahassee, FL 32301
Liberty County – DRC #8 – Veterans Memorial Park 10405 NW Theo Jacobs Way, Bristol, FL 32321
Wakulla County – DRC #1 – Community One Stop 318 Shadeville Hwy, Crawfordville, FL
Washington County – DRC #6 – Washington County Agricultural Center 1424 W Jackson Ave, Chipley, FL 32428
Immature cotton flattened by winds from Hurricane Michael in Jackson County. Credit: Doug Mayo. UF/IFAS
Tom Nordlie, UF/IFAS Communication Services
Hurricane Michael caused production losses totaling $158 million for Florida’s agricultural industries in the 2018-19 growing season, according to economists with the University of Florida Institute of Food and Agricultural Sciences.
The dollar estimate, along with more detailed information, has been forwarded to state and federal agencies to facilitate relief efforts, said Jack Payne, UF senior vice president for agriculture and natural resources. “No one understands the magnitude of this disaster more fully than our UF/IFAS Extension agents based in the Panhandle,” Payne said. “They rose to the occasion and connected with farmers, landowners and property managers to obtain raw data concerning the status of their crops before and after Hurricane Michael struck. We even used drones to obtain aerial images of crop fields. Then, the UF/IFAS Economic Impact Analysis Program team extrapolated from the raw data to produce a comprehensive figure for the entire affected area. To ensure that their calculations were accurate, the team engaged in discussions with state agencies, commodity groups and other academic experts to obtain their input.”
The $158 million figure represents lost sales revenues that producers would have received during the 2018-19 growing season if the storm hadn’t impacted them. Economists use the term “losses” to describe this outcome, said Christa Court, an assistant scientist with the UF/IFAS food and resource economics department and EIAP assistant director.
Soybeans flattened by winds from Hurricane Michael in Jackson County. Credit: Doug Mayo, UF/IFAS
“Our analysis did not address clean-up costs, repair and replacement costs for damaged property, medical and veterinary expenses, or any long-term economic effects of the hurricane,” Court said. “We needed to focus initially on developing the loss estimates needed for relief efforts, but we intend to continue to develop estimates for the broader economic impacts of the hurricane. County-level estimates will be released in the very near future.” Nearly 1 million acres of agricultural crops, not including timber, were impacted throughout the Panhandle, Court said.
The economic analysis team calculated crop loss estimates for 25 Florida counties, for commodities that included field crops, row crops, vegetables, fruits, tree nuts, greenhouse and nursery crops, as well as beef, dairy, poultry and other animal products, she said. The most serious impacts occurred in Bay, Calhoun, Franklin, Gadsden, Gulf, Jackson, Liberty and Washington counties, which experienced hurricane-force winds of 111 to 155 miles per hour, corresponding to the Category 3 and 4 hurricane ranges.
Virtually all of the state’s cotton crop was wiped out, with losses totaling $51 million on more than 145,000 impacted acres. When the hurricane made landfall in Bay County on Oct. 10, annual harvesting efforts had just begun, and more than 90 percent of the crop remained in the field.
More than 245,000 acres of peanut were impacted, resulting in losses of $22 million.
Field corn, which saw a 100 percent loss on many farms where harvesting was not already completed, had more than 66,000 acres impacted and losses totaling $5 million.
Hay had the greatest acreage impacted – a total of 247,000 acres, with losses of $2 million.
Specialty crops in the Panhandle also suffered significant losses, including $39 million for greenhouse, nursery and floriculture production, $9 million for vegetables and melons, $4 million for fruits and $3 million for tree nuts including pecans.
Field reports indicate that a significant number of livestock animals went missing after the hurricane, including beef cattle, deer, horses and hogs. Most of the animals disappeared from sites with damaged fencing or enclosures. Total production losses for the expected three to six weeks of disruption to animal agriculture operations in the region were estimated at $23 million.
In addition, the Florida Forest Service, a division of the state Department of Agriculture and Consumer Services, estimated Florida’s timber losses at $1.29 billion for pine, mixed upland hardwood and bottomland hardwood timber across a total of 2.81 million acres, in a report released Oct. 19. These figures represent timber that would normally be harvested over several years, Court said, and should not be viewed as a one-year loss figure. Therefore, total timber losses caused by Hurricane Michael cannot be directly compared with agricultural crop losses involving plants that are grown and harvested in a single year, such as cotton.
The UF/IFAS economists concluded that Hurricane Michael was the most serious natural disaster to impact agricultural and natural resources industries in the Florida Panhandle in decades.
Read the full preliminary report:
The large inventory of feed cattle that have been placed in the feedyards has begun to affect the price of feeder calves. How large an impact will depend on consumer demand. Credit: Chris Prevatt, UF/IFAS
Cattle on Feed Report
On Friday, September 21st the monthly USDA-NASS Cattle on Feed Report was released. According to the U.S. Department of Agriculture the number of cattle and calves on feed (Feedlots with 1,000 head or more capacity) for the slaughter market in the United States on September 1st was 11.125 million head, 5.9 percent above Sept. 1, 2017. This is the largest September inventory since the series began in 1996. The monthly cattle on feed inventory not only increased year-over-year, but month-over-month with 32,000 more cattle on feed since the August 1st inventory report. Additionally, this is the fourth month in a row where a monthly record has been set for the number of cattle and calves on feed for the slaughter market. A twelve-month moving average of monthly feedlot inventories shows that, over the last year, feedlots have had the largest average feedlot total since 2007. Placements in feedlots during August totaled 2.07 million head, which was 7 percent above August 2017. Net placements were 2.02 million head. Marketing of fed cattle during August totaled 1.98 million head, slightly above the 2017 total.
Keys for the Beef Cattle Market
The cattle on feed report did not create a positive short-term outlook, as it continues to provide bearish information for supply fundamentals. Beef production is on track to reach a record level of 27.1 billion pounds in 2018, up 3.6 percent year over year. For the year to date, beef production is up 3.0 percent year over year. However, fourth quarter beef production is expected to be about 4.0 percent larger than last year.
From the demand side of things, a strong domestic economy and robust exports have continued to support beef and cattle prices during 2018, against record large U.S. beef production and all-time highs in competing meats (pork and poultry). Packing business margins continue to be good. Therefore, packers have great incentive to keep processing as many head as possible to take advantage of margins. Good retail demand and packer margins will be needed to keep the market moving along at a good pace during the last quarter of 2018.
There are many unknowns and potential headwinds for cattle markets during the next 12-18 months. Any weakness in the domestic or global economy compared to the conditions of the last two years would dampen demand for beef and thus cattle. Therefore, two of the keys for maintaining prices moving forward will be for the U.S. economy and export markets to continue growing. These two factors will be challenged by the cycle of tariffs and retaliation. Futures markets may begin to react more aggressively to political announcements that may or may not materialize into price changes. Demand for U.S. beef is critical to the success of U.S. cattle producers. Export markets can take a very long time to materialize, but can be lost very quickly.
Don Shurley, Professor Emeritus of Cotton Economics
Our thoughts and prayers go out to everyone, but especially for our fellow farmers and cotton producers in North Carolina, South Carolina, and Virginia.
The very latest projected path of the storm (as of this morning), takes it along the North Carolina coast then inland across virtually all of South Carolina. This storm is slow moving—meaning that it will dump a lot of rain, and there will be high winds for several days.
Accumulated rainfall from this storm is expected to total 12-18 inches or much more in some areas and accompanied by high winds. Most areas, even if not in the most heavily impacted area, are expected to receive totals of 5-12 inches of rainfall.
It looks like Georgia may be fortunate to escape the brunt of any major impact on crop production:
“I am relieved to say that with the current path of the storm, impacts on most of Georgia are now expected to be minimal. Eastern counties will still experience some wind gusts from the storm, which could cause isolated power outages, but they are expected to be less than 40 mph. Rainfall will be confined to the northeastern part of the state and should amount to less than two inches in all. The rest of the state should see no rain at all from the storm, which is not good for areas that are currently suffering from dry conditions. The southern half of Georgia should not experience any significant impacts from the storm, and northern Georgia’s impacts will be small and limited in space and time.” Pam Knox, UGA Agricultural Climatologist. September 14, 2018
North Carolina, South Carolina, and Virginia were forecasted to produce a total of 1.58 million bales of cotton this year. Recognizing the location of most cotton production in these states (based on 2017 county production), it appears that South Carolina cotton will be subject to heavy rainfall as well as North Carolina. Virginia will receive less and east Georgia mostly 1-2 inches or less.
As we experienced with Irma here in Georgia last year, the damage from sustained high wind can be significant—resulting not only in lost lint from open bolls, but also twisted and lodged plants difficult to harvest. As of Sept 9, the NC crop was 43% open, SC 28%, and VA 37%.
The visions of a return to 90-cent cotton appear to be fading. The good news is that the market is clearly showing signs of good support at roughly 82 cents. Support is a good thing; but prices (Dec futures) have struggled to clear a hurdle at 85 cents—we’ll first have to clear 85, if we hope to reach 90. Producers looking for an opportunity to add on to earlier sales, support is good but a rally is even better.
USDA’s September estimates raised the US crop to 19.68 million bales—440,000 bales higher than the August estimate. The 2018 forecast yield was lowered just a bit, but acres planted was raised 520,000 acres.
The US crop is still a big unknown. This is one thing giving us support. Texas, as of Sept 9, is 62% poor to very poor condition. The September USDA numbers lowered the Texas state average yield to a projected 694 lbs/acre—down from 726, but added roughly 200,00 more acres to be harvested.
US exports projected for the 2018 crop year were raised 200,000 bales from 15.5 million bales to 15.7 million. World demand is strong but there is some skepticism within industry about whether or not USDA is over-reaching a bit on its export number. 2017 crop year exports were 15.85 million bales.
Compared to the August estimates, China’s production for this season was raised 1 million bales; India production was unchanged; Australia production was cut 550,000 bales and Brazil raised ½ million bales; Chinese imports and use were unchanged; Bangladesh and Vietnam imports were unchanged.
Although prices appear to have good support, producers should be 50% sold or better at this point. The current level of prices (in the 82 cent neighborhood) is disappointing compared to where we have been. But if you’re not already at the 50% level, you also need to think about guarding against this market going to less than 80 cents and you being at-risk with most of your crop.
On the other hand, if you are already 50% or more priced, rallies to the 85 cent area could be a good opportunity to add further to sales—unless you want to take the risk of holding out for 85 to 90—but then realizing you’re also taking the risk that the current level of support will hold.
Don Shurley, Professor Emeritus of Cotton Economics
Contamination from plastics is a hot-button topic in the US cotton industry right now. It should be. It’s a serious problem. Major culprits include plastic wrap from round modules, shopping bags from stores, and plastic used as ground cover in the production of previous crops in a field.
Cotton bales wrapped in plastic in Jackson County. Photo credit: Doug Mayo, UF/IFAS
High quality fiber is one reason foreign mills have beat a path to our door in recent years. As an industry, anything that impacts the demand and market share for our cotton—especially overseas, needs to be resolved. The industry is being vigilant in addressing this problem. Groups have visited foreign mills to observe and discuss the problem. Also, the National Cotton Council will soon roll out an intensive educational effort.
Beginning with this year’s 2018 crop, the USDA-AMS Cotton Program is implementing new extraneous matter codes, 71 and 72, for plastic—“71” means type 7, level 1 (light) and “72” means type 7, level 2 (heavy). Producers will begin to see these new 71 and 72 codes on their bale analysis classing reports, if plastic is detected in the sample.For 2018 loan value purposes, FSA will treat plastic as “Other” (codes 61 and 62). Discounts for plastic are severe. The loan value discount for level 1 is 460 points or 4.6 cents/lb—about $23 per bale. The cash/spot market discount for a level 1 is currently mostly 375 to 550 points or, again, roughly $23 per bale.
Prior to this year, any bale sample found to contain plastic was coded as “Other”—a 61 or 62 (see the table above). “Other” could also be anything else not otherwise in the above table. But, now that plastic will have its own code, such a bale may be discounted even more severely. Further, such a bale could be rejected from the market place entirely.
The severity of the plastics problem is not understated. Therefore, an issue for the industry is this—it appears that classing data does not reflect what we feel is the true severity of the problem. If bale sampling and classing were detecting any plastic to a great extent, classing data would show it. If classing doesn’t detect the problem (if there’s plastic in the bale), then coming up with new classing codes wouldn’t necessarily be a solution except to say that if plastic is detected, it will now be coded and better known as such.
Let’s look back 3 years at both Texas and Georgia classing data as examples. Prior to 2018, if plastic was found in the sample, it was coded as a 61 or 62 and included in the “Other” category. In 2015, ’16, and ’17 if I take the total bales classed that contained extraneous matter of any sort and then subtracted everything but the “Other” category, then by definition the number of remaining samples classed must be the ones with any other type of contamination—plastic plus anything else not accounted for.The numbers in this table would then be the maximum possible number of bales that, when sampled, were found to contain plastic. I am told that in some years, samples actually containing plastic were considerably less than this.
For Texas, 2017 was the Hurricane Harvey year and a big jump in 61s and 62s, but still less than 0.05 percent. In Georgia for 2016, 4,700 running bales or 0.22% classed 61 or 62, but it’s believed most of this number was actually due to whitefly damage.
Unlike plant-based extraneous matter, plastic is generally not uniformly distributed in the bale. There may be plastic in the bale, but not in the sample. The plastic may not be realized until that bale gets run in the mill. THIS is the problem. If bales with plastic keep showing up, the mill may avoid that gin or origin all together.
Since classing may not necessarily catch the problem, even with the new coding, the only real solution is that producers and gins must be vigilant to adopt practices to keep plastic out.