6.3 million acres unplanted, $1 billion impact
FARGO, N.D. -- Federal agricultural officials for North Dakota are scrambling to assess prevented planting problems from an estimated 6.3 million unplanted acres and to make sure the U.S. Department of Agriculture approves the losses under a perm...
FARGO, N.D. -- Federal agricultural officials for North Dakota are scrambling to assess prevented planting problems from an estimated 6.3 million unplanted acres and to make sure the U.S. Department of Agriculture approves the losses under a permanent disaster program.
North Dakota State University ag economists now are saying the state may sustain more than a $1 billion hit in gross receipts for the 2011 crop, when crop insurance is netted out. That compares with North Dakota's gross crop revenue of $5.5 billion in 2009 and $6.7 billion in 2008, a year of high commodity prices.
Eight northwest North Dakota counties have 44 to 90 percent their crops unplanted, according to the federal estimates, which still are preliminary.
One issue is making sure farmers are eligible for Supplemental Revenue Assistance Payments Program program, administered by USDA's Farm Service Agency, officials say.
Funding for the SURE program ends Sept. 30, the end of the fiscal year, even though the farm bill doesn't expire until a year later. Payments always come a year and a half after the crop has taken place.
Scott Stofferahn works on farm bill issues for Sen. Kent Conrad, D-N.D., who helped build the permanent disaster provision into the 2008 farm bill. Stofferahn says the provision ended Sept. 30 to meet the Congressional Budget Office scoring requirements for the program. SURE paid out more than $300 million to North Dakota farmers in the 2008 crop year, with "economic stimulus" payments added in, and more than $40 million in 2009.
NDSU's Andy Swenson, who is working on the analysis under the lead of Dwight Aakre, says the $1 billion is simply the gross revenue reduction expected from the 2011 crop, even after prevented planting payments are counted. If there are additional losses because of crops that failed, or lower yields that's not in there, Swenson says.
It includes values of five-year averages of plantings and yields.
Revenue loss projections
Swenson says the gross revenue loss projections don't include the typical "multiplier" effects of money turning over in the economy, which typically is a factor of about 3.5 for crops.
"We are doing everything we can, within the rules, to make sure counties and producers are eligible," says Aaron Krauter, state executive director of the Farm Service Administration in North Dakota. "What if you have a late crop and the beans or corn mature and are harvested after the expiration of that program. Are they eligible?
"This is where Sen. Conrad said we need to get going on this because we may need to visit with the secretary of agriculture, that the (legislative) language is understood, that if we meet the level of 30 percent economic loss in a county, it will trigger the SURE program. We need to make sure that you qualify if you had 29 percent loss, and then after the harvest the loss was more than 30 percent."
Stofferahn says he is hopeful that losses for 2011 can be covered under SURE if the "cause of the loss occurred prior to the end of the fiscal year."
The program is a "whole farm" program, so it's likely an entire county would be eligible under a secretarial disaster declaration, which could follow a Damage Assessment Report.
He says USDA officials need to be fully aware of the North Dakota situation, as early as possible. Jim Miller, Conrad's agricultural legislative lead, is a former undersecretary of agriculture and is in contact with the department about the issue before the department establishes eligibility thresholds.
Krauter says it may not be likely that Secretary of Agriculture Tom Vilsack would approve an extension of the program past the fiscal year, but he thinks the issue will come up in the debate on the 2012 farm bill and that some of the losses may be covered retroactively.
Krauter emphasizes that agriculture is willing to take its "fair share" to make the budget work, but sometimes Mother Nature is in control. He says that it will be important that Conrad is in the Senate through 2012 to help lead the new farm bill discussions, but acknowledges it will be a "big challenge to get that done in the next 15 months."
I hope that producers who have had a couple of good years have saved up to offset this bad year," Krauter says.
Duane Hauck, director of the North Dakota State University Extension Service, says very preliminary estimates of the revenues lost from $1 billion of revenues if crop were planted, vs. prevented planting payment, and his agency scrambled to solidify numbers.
Krauter says the FSA began expecting a larger number of prevented planting acres this year than any other year simply because of throughout the state flooding -- Devils Lake, the Red River, the Missouri "and Little Missouri." And then, with Minot flooding the problems seemed even direr.
The record-high prevent-plant acres were 3.9 million acres in 1999 and were high again in 2010 at 1.7 million acres.
In early June, the agency conducted a series of conference calls with FSA managers and county Extension Service officials and heard the difficulty farmers were having getting into the fields as well as their efforts to switch crops.
"We could see the numbers growing," Krauter says.
Conrad, a member of the Senate Agriculture Committee, requested an estimate of acres in prevented planting, which led to communications with the governor, who historically requests the federal officials create a Damage Assessment Report. Typically, that comes in August, at the end of the harvest.
North Dakota Gov. Jack Dalrymple filled his role June 24 by making the request for a DAR. That triggered an emergency board conference call, including several USDA-related agencies -- chaired by FSA, but including the Cooperative Extension Service, Natural Resources Conservation Service, Rural Development, the Agricultural Plant and Health Inspection Service, the U.S. Forest Service, the Food and Nutrition Service and the Rural Utility Service.