Hurricane Harvey stands to harm virtually all of U.S. agriculture, in some way. Many ports that ship agricultural commodities are in the path of the storm, from Texas to Louisiana, where the majority of corn and soybeans destined for other nations leave the United States. Texas produces high volumes of cotton, wheat, rice and soy and is a large exporter of crops from around the country. Some of the regions impacted by the storm are expected to see about a years-worth of rainfall this week, causing flooding and stressing infrastructure. Mike Steenhoek of the Soy Transportation Coalition says that until the storm passes, they will not be able to assess the structural integrity of railroad tracks or bridges. And because of these transportation issues, grain elevator operators, which will have reached capacity, will discourage farmers from delivering crops by lowering the commodity prices that farmers are usually paid. Steenhoek told DTN: “From a soybean and corn logistics perspective, the larger concern occurs if the consequences of Harvey extend farther east to the 230-mile stretch of the Mississippi River from Baton Rouge, Louisiana, to the Gulf of Mexico.”
In a statement Wednesday afternoon, Agriculture Secretary Sonny Perdue offered support to President Trump’s tax reform agenda. Trump announced his plans for tax reform during a stop in Springfield, Missouri, Wednesday. Perdue says: “The president’s tax reform package will be of great benefit to agriculture and help improve rural prosperity.” Trump did not offer many details on reforms, but offered broad outlines that he said would offer economic benefits to main street America. Trump says the plan includes cutting taxes for individuals and business. Perdue mentioned that farms are small businesses, and that “time and costs associated with merely complying with the tax code are impeding American prosperity.” Secretary also mentioned the Estate Tax, or death tax, saying “too many family farms have had to be broken up or sold off to pay the tax bill.”
The Department of Agriculture Wednesday predicted a slight increase in farm income for 2017, reversing three years of major decline. The August update of the farm income forecast predicts net cash farm income for 2017 at $100.4 billion, up $11.2 billion, or 12.6 percent, from 2016. Net farm income, a broader measure of profits, is forecasted at $63.4 billion, up $1.9 billion, or 3.1 percent, relative to 2016. USDA says the stronger forecast growth in net cash income is largely due to an additional $9.7 billion in cash receipts from the sale of crop inventories. The net cash farm income measure counts those sales as part of current-year income while the net farm income measure counted the value of those inventories as part of prior-year income. However, that predicted increase is still lower than every year from 2010 to 2015. During that period, net farm income peaked in 2013 $131.3 billion.
A $460,000 grant will help the University of Missouri research an infectious blood disease in cattle caused by bacteria transmitted by ticks worldwide. The University recently received the grant from the U.S. Department of Agriculture to study a new approach to interfering with the pathogen in the tick vector. A team of researchers at the university are working to develop immunizations with extracts from tick tissues to fight the disease. It has been estimated that more than 80 percent of beef cattle are affected by ticks. The targeted disease infects the red blood cells and causes severe anemia, fever and weight loss in cattle, sometimes can be fatal. Researchers say the overall goal is to develop sustainable ways to treat the disease to keep cattle and herds healthy.
Dow Chemical Company and the Dow Chemical Foundation will donate $1 million to support immediate relief and long-term recovery and rebuilding efforts associated with Hurricane Harvey. Dow will donate $100,000 to the American Red Cross Disaster Relief Fund, $100,000 to Team Rubicon, and $200,000 to other local nonprofit organizations assisting the region. Texas is home to approximately 12,000 Dow employees and contractors. Dow has safely accounted for each of its employees, however, many are personally impacted by the storm. The company says it will also match employee and retiree donations up to $100,000 to the American Red Cross Disaster Relief Fund.
Cattle ranchers in the path of Hurricane Harvey in Texas have been forced to move cattle to higher ground, but much of the impact won’t be assessed until later this week. Flooding remains a threat to much of the storm area, leaving many farmers and ranchers unable to reach their fields or livestock, though some ranchers are reporting that their cattle are safe. The Texas and Southwestern Cattle Raisers Association says the organization is working with state agencies to coordinate relief and support efforts for ranchers. The hurricane follows the recovery efforts by the Texas cattle industry from years-long drought. Those who want to help are being urged to donate to the State of Texas Agriculture Relief, or STAR Fund, managed by the Texas Department of Agriculture. More flooding is expected in Texas, along with Louisiana, as the storm moves on.
The crop insurance industry is calling a report by the Government Accountability Office “disheartening.” The GAO last week recommended to Congress that it considers directing the Department of Agriculture to adjust the expected rate of return for crop insurance. In 2010, USDA negotiated with insurance companies to set a 14.5 percent target rate. According to GAO’s analysis, the reasonable rate of return declined, averaging 9.6 percent. However, the Crop Insurance Industry says the GAO “glossed over” key facts. An industry news release says providers of crop insurance are not achieving the returns targeted, and says the GAO did not consider full business expenses by insurers for the report. The industry points out that a 2017 study by economists from the University of Illinois and Cornell University noted that net returns for crop insurance providers were just 1.5 percent from 2011-2015.
New data announced by the Department of Agriculture shows that rural counties with low education levels have worse economic outcomes than other rural counties. USDA’s Economic Research Service classifies 467 counties as “low education” counties, where at least 20 percent of working-age adults, ages 25 to 64, do not have a high school diploma or equivalent. Nearly 80 percent of those counties are rural. A rural non-metro county, as considered by USDA, consists of either open countryside, rural towns with fewer than 2,500 people and urban areas with populations under 50,000 that are not part of larger labor markets, or metro areas. About 40 percent of low education rural counties are also persistent poverty counties, with poverty rates of 20 percent or higher since 1980. Low education rural counties also had a higher average child poverty rate on average than for all other rural counties. Additionally, the unemployment rate of low education rural counties was about a percentage point higher.