What is in this article?:
- The economic impacts associated with natural disasters have been estimated at nearly $5 billion to the Louisiana’s agriculture, aquaculture, and fisheries industries.
Crop related impacts
Drought or excessive rain conditions can result in fields going unharvested but, more typically, will result in some percentage yield reduction and quality loss. Information is gathered on acreage that experiences a total yield loss as well as on acreage that experiences partial yield loss.
Events that prevent harvest in a timely fashion can often cause lower grain quality and test weights in feed grain crops and lower fiber quality in cotton. Given that estimates for quality losses are generally much more subjective than yield loss estimates, the survey only requests information on the number of acres that would be expected to have quality losses. This information is combined with information obtained from a survey of commodity buyers throughout the state asking for the range in price discounts being seen for quality damage. Once the average price discount is determined, it is used to adjust the assumed market price for the commodity to determine the economic impact of quality losses from the natural disaster. An important point here is that the price discounts for quality losses are only applied to those acres identified from the survey at the reduced yield levels. Since the yield loss is accounted for, applying a price discount to “normal” or predisaster yields would result in overestimating potential impacts.
Depending on when a disaster impacts the agricultural industry, prevented plantings can also be experienced. Excessive drought or rain at planting can push planting beyond recommended time frames. In these instances, surveys provide estimates on the number of acres that were not able to be planted to the intended commodity and were not subsequently planted to any other commodity. In this case, the impact is defined as a loss of net revenue to the producer. LSU AgCenter enterprise budgets are used to estimate net returns that would have been expected under normal conditions and are used to determine the economic impact associated with prevented planted acres.
Another issue that is typical of many of the disasters faced in Louisiana is increased production costs. Increased production costs are more typical with excessive rain events at harvest which reduce harvest efficiency and increase harvest time. However, in the 2011 drought, increased irrigation demand was a significant impact faced by many agricultural producers. Surveys provide information on acreages impacted by increased production costs as well as other information needed to estimate the economic impact of these increased costs.