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Floods and Tariffs Create Uncertain Future for Arkansas Farmers

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by Jeremy Peppas

The news is not good for Arkansas farmers.

The state’s agricultural industry is currently facing the double whammy of historic flooding that has delayed plantings, as well as crop emergence, and tariffs that have cut into the bottom line. 

In a report from the United States Department of Agriculture, it nots Arkansas and other states are lagging behind in several key points with crops.

With soybeans, Arkansas is one of the 18 states that produce 95 percent of the nation’s crop, and flooding has had its consequences. 

In June 2018, Arkansas farmers had planted 98 percent of that year’s crop but on June 9 of this year, the percentage planted had dropped by a third to 66 percent, and then picked up on June 16 to 79 percent. According to the USDA, based on a five-year average, Arkansas would have had 90 percent of its soybeans planted at this point.

In terms of soybeans that have emerged, last year some 93 percent of the crop had sprung forth. That isn’t the case this year, with 52 percent on June 9 and ticking up to 65 percent on June 16. The average is 84 percent.

Arkansas has it good compared to other states that have been impacted by the flooding.

Illinois, for example, had just 25 percent of its soybeans emerge on June 9, and the average for the 18 states was 34 percent of the crop on June 9 and 55 percent on June 16.

The state’s other key crop, rice, is faring marginally better.

The USDA looked at the six states responsible for the country’s rice – Arkansas, California, Louisiana, Mississippi, Missouri and Texas – with 85 and 93 percent of the crop having emerged by June 9 and 16 whereas last year it was 100 percent, and the five-year average was also 100 percent.

The condition of that rice is a little shaky though with 12 percent of the crop being rated as poor and very poor, while that number last year was at just 3 percent of the crop.

Cotton, the last of the big three crops for the state, was faring well despite the rain and flooding with 98 and 99 percent of the crop planted by June 9 and 16, respectively, with the five-year average at 100 percent by June.

The other issue for farmers is tariffs and the current administration’s reliance on them in trade disputes with countries like China and Mexico.

Last month it was announced the USDA would make $16 billion in aid available to farmers to help them with losses from those ongoing trade disputes.

Details for how that money would be allocated are still vague though and at first would only be available for acreage that had already been planted.

Agriculture Secretary Sonny Perdue announced on June 10 that the USDA’s thinking had changed.

“Given the size and scope of these many disasters, as well as the uncertainty of the final size and scope of this year’s prevented planting acreage, we will use up to $16 billion in support for farmers and the $3 billion in disaster aid to provide as much help as possible to all our affected producers,” Perdue said in the USDA release. “I have been out in the country this spring and visited with many farmers. I know they’re discouraged, and many are facing difficult decisions about what to do this planting season or if they’ve got the capital to stay in business, but they shouldn’t wait for an announcement to make their decisions. I urge farmers to plant for the market and plant what works best on their farm, regardless of what type of assistance programs USDA is able to provide.”

Perdue added that the USDA was going to be looking at its legal options to see if “Market Facilitation Program payments” were allowed “to producers for acreage that is not planted.”

The impact of the tariffs is most acute with soybeans.

With soybeans futures, prices have dropped to $8 per bushel from the $10 range. 

China is the largest market for soybeans in the world and the tit-for-tat tariffs dispute has led them to put a hold on all soybean purchases from the United States. 

READ MORE: Starting From the Ground Up

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