By Chris Clayton
DTN Ag Policy Editor
OMAHA (DTN) -- Farm losses in Georgia following Hurricane Michael last week are going to make it hard for farmers to cover operating loans unless lenders can offer some latitude on payment.
Gerald Long, president of the Georgia Farm Bureau, said loan repayment is one his biggest concerns for fellow farmers trying to recover in his state after the devastation.
Hurricane Michael hit every major sector of agriculture in the state, including cotton, pecans, poultry, and fruits and vegetables. The Georgia Department of Agriculture summed up early estimates as reported losses, noting, "... the numbers are staggering." The losses could approach $3 billion.
"The devastation of this storm has got a very, very long tail on it," Long told DTN.
Gary Black, Georgia's agriculture commissioner, said, "These are generational losses that are unprecedented, and it will take unprecedented ideas and actions to help our farm families and rural communities recover."
Black added, "The meter started at $1 billion and jumped quickly to nearly $3 billion. Unfortunately, we are not quite sure where it is going to stop."
With the costs now required to be in production agriculture, Long said most farmers need operating loans to cash-flow the crop season. Following the hurricane, too many producers just aren't going to be able to pay on their loans after the storm.
"To be in production agriculture, it's just phenomenal how much money we have to borrow, and it's very obvious there will be many, many, many farmers who will not be able to service their debt this year because of the damage that's been done," Long said.
Farm Bureau, officials from the state department of agriculture, and leaders from the Georgia Bankers Association have scheduled a meeting Tuesday to talk about what can be done to adjust loan obligations for farmers and livestock producers.
"We need to meet and reach an agreement on what we can do, whether it's refinance to meet their debts," Long said. "It's going to take some federal assistance just to help with it."
Long also pointed to devastation in the timber industry -- Georgia is the country's top timber state -- that will have a lasting impact on landowners who have lost timber that was reaching maturity for logging. Timber losses are projected at 1 million acres, valued at $1 billion.
"For many of them, that timber represents their savings account, and it's totally gone," Long said. "So it's not just the row-crop farmer who was hit out there. The effect that's going to have on communities is just going to be devastating."
Long noted farmers who have crop insurance will get some protection, but the Southeast will need some disaster assistance similar to that provided to farmers last year in Florida and Texas after hurricanes hit. Even then, many farmers will be hard pressed to meet loan obligations.
"The disaster aid and the crop insurance will not make it so producers can meet their debts," Long said. "We've got to get with our lending institutions to try to get them to understand. So something has got to be done."
With low prices followed by crop disasters, Long pointed to the risks to the economy throughout the Southeast from Hurricane Michael and from Hurricane Florence in September. He suggested Congress may need to find a way to directly support agricultural lenders through lower-interest loans.
"We don't want any more loans because we've got plenty of loans," Long said. "But if that's the only thing that is going to help us survive until next year, that really should be an option. As far as government assistance, I'd rather not have it, but we're in a critical stage now."
Florence caused an estimated $2.4 billion in agricultural losses just in North Carolina, including nearly $1.9 billion in crops and livestock losses.
Hurricanes Florence and Michael come as lawmakers are in final talks to complete a new farm bill and extend the safety net programs for farmers. Farmers in states hit hardest by the hurricanes may need to come together to see if changes can be made to help those producers recover, Long said.
"We're going to have to do something to stabilize the economy in these towns, and I think that's going to be very, very important," Long said.
On his own farm near Bainbridge, Georgia, Long said his peanut crop was being harvested this week and "looked decent," but his cotton crop basically was stripped. His farm's vegetable business was reopening late Friday, Oct. 19, after closing before the storm hit.
"But it's devastated a lot of our fall vegetables -- our peas, our green beans, cantaloupes," Long said.
Long said he still doesn't know the state of his cow-calf herd. The storm hit during calving season, and a lot of the cattle spend their time in the woods. Fencing was destroyed all around along with trees, but it's unclear how many cattle he may have lost.
"We've had as many as nine people working on fences at any one time, and we've just touched the tip of the iceberg," he said. While all that recovery work goes on, harvest is falling behind for some crops, he said.
Under current farm programs, USDA started sending out checks in early October for the 2017 Price Loss Coverage/Agricultural Risk Coverage programs. Georgia farmers were projected to receive about $144.3 million.
As DTN Farm Business Editor Katie Dehlinger reported Thursday, ARC/PLC payments for the 2017 crop are down dramatically from earlier years. To read more on the topic, visit https://www.dtnpf.com/…
USDA's Market Facilitation Program, or "trade aid" program was set to pay about $46 million for Georgia, of which $42 million was expected for cotton. Yet, one of the big rules for receiving the aid payments is that the MFP is based on actual reported production. Cotton farmers were expecting record yields this year, the Georgia Department of Agriculture stated, but crop losses could run from $300 million to as high as $800 million.
"The final loss estimate will be dependent on the ability to harvest what remains in the field," the department stated.
"You have got to report that production for the trade payment," said Long, who raised this point with USDA Secretary Sonny Perdue last weekend. Long said farm organizations and others are going to have to work with Congress to see if some law change can be made for farmers who were hit with a crop disaster this year.
USDA's Farm Service Agency Administrator said Thursday on the radio program Adams on Agriculture that, nationally, USDA has received about 97,000 applications under the Market Facilitation Program for about $300 million. The first round of aid payments was expected to be about $4.7 billion. USDA is expected to determine later this fall if another round of trade aid payments will be made.
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
© Copyright 2018 DTN/The Progressive Farmer. All rights reserved.