Wednesday, September 12, 2012
The office of Gaddis Farms sits in a metal building just beyond the post office from the half-dozen or so shops and the police station on Madison Street in the rural town of Bolton. Half the building serves as the offices of one of Hinds County's oldest and largest farms. The other half houses a John Deere heavy equipment and tractor retailer.
Ted Kendall IV, a fifth-generation farmer, is the man in charge. This time of year, though, he's usually not in the office. He's in one of the many fields his family has owned and operated since 1897 in the town about 13 miles west of Jackson on Interstate 20. It's corn harvesting time in late August, and this year, more than ever before, that means Kendall needs to be in the field. Never before have the golden ears meant so much money to be made.
He took time out of his busy harvest season to talk with the Jackson Free Press the afternoon of Aug. 24. We met in his modest office, complete with family photos and an impressive eight-point whitetail buck mounted on the wall.
Across much of the Midwest, farmers have experienced a summer hotter and drier than any they've seen. The National Oceanic and Atmospheric Administration's Palmer Drought Index shows that 57 percent of the contiguous United States was under moderate to extreme drought at the end of July. That's the highest percentage since December 1956, when 58 percent of the contiguous states were in drought.
This summer, much of the region's cash crop, corn, died during the long, dry heat wave.
In Mississippi, crop farmers are feeling the drought as well, but not in the fields. With the exception of parts of the northern Delta, the state hasn't experienced drought conditions much, if at all, this summer. Plenty of rain has fallen to feed the thirsty corn. So much so, in fact, that Kendall said it has been an improvement from the previous two summers.
"We've had a very good growing season," Kendall said, sitting in the desk chair in his beige-walled office.
"It was hot and dry in June, but we get accustomed to that. Then we started getting rains in July that really made our crop."
With much of the product in the country's largest corn-growing region dead, corn prices are at an all-time high, running about $8 a bushel, up from $6 a bushel last year, said Robert Mashburn, who runs Bolton-based Triple R Farms along with his partner, Richard Mellon.
While farmers in the state will take in record profits, the drought in the Midwest is going to raise the price of everything we consume, Mashburn said.
Basic supply and demand, and the forces of a summer without rain, means the farmers like Kendall and Mashburn, with live crops and full harvests, stand to make a profit they've never seen when the corn leaves the field and heads to the buyers.
Drive past Gaddis Farms' headquarters and into the fields this time of year, and you'll see farm employees driving massive combines. The giant machines cut, shuck and strip eight rows of corn off the cobs at a time and hold up to 300 bushels.
When they are done, nothing is left in the field but broken stalks, dried-up husks and dark-brown, empty cobs. When the combines are full, workers load the corn into the trailer of a semi-truck along one of the narrow, bumpy roads in western Hinds County that few travel other than farmers and hunters. Then the combines return to the field to bring in more corn—and more money.
Farmers like Kendall, who runs Gaddis Farms with two family members: his father Ted Kendall III and Kendall Garraway, his cousin, will harvest corn in August and early September. For some farmers, that is when all the work pays off. Those who have waited until harvest time to sell their crops can now take full advantage of the market, which requires massive amounts of corn and has suddenly lost many major suppliers. Others, however, worked out deals with buyers earlier in the year, before the drought destroyed large portions of the crops across the Midwest.
Consumers will see price increases at the grocery store, but not just in the numerous corn-based products on the shelves. Most of Kendall's corn stays in the state. His largest buyers are a group who are feeling the equal-and-opposite reaction of the Midwest farmers' losses, but it's not grocery shoppers.
Poultry and cattle farmers need corn to feed their animals. Though they may buy most or all of their feed supply from inside the state, they still have to pay the record prices for feed crops the drought has created.
"From a corn and soybean standpoint, I think primarily what you're looking at is increasing the cost of animal feed," Kendall said. "Most of it goes to raising cattle, chicken (and) hogs. So it's certainly going to increase the cost in production for livestock."
To add to the cattle and poultry industries' troubles, meat prices have dropped drastically during the drought. As farmers began seeing the drought killing crops across the Midwest, they realized feed prices were about to make keeping cattle and poultry through the winter a much-less profitable endeavor. So they began selling off their cows, chickens and pigs, and they flooded the market. With the sudden increase in supply, demand couldn't keep up and the prices fell.
While that lowered the short-term cost of meat during the spring and summer, it also lowered the long-term supply, and thus will raise the price of meat over the next couple of years.
The U.S. Department of Agriculture predicts the price of beef and veal to rise as much as 4.5 percent this year, and as much as 5 percent in 2013. Pork products could jump up 3 percent by the end of this year, and another 0.5 percent next year.
Cattle farmers in Mississippi have an advantage over many other states. They have ample grazing land with plenty of grass to feed their cows during the spring, summer and into the fall.
When winter comes, however, ranchers have to turn elsewhere for feed.
Kendall is also a cattle farmer. He said he has not yet felt the hit of the higher grain prices there, but expects to this winter.
"We don't purchase much feed in the summer in the cattle business," Kendall said. "We rely on grass. For the winter—for our protein and energy—we'll start purchasing things."
It may seem fortunate that he has ample amounts of cottonseed and corn growing in his own fields. He said, though, that he depends on selling most of his crops, not keeping it in house.
Poultry and pig farmers in the state are already feeling the effect of the higher grain prices, Kendall said. They need the corn year-round to feed the animals. The feed is more expensive than ever, and it's only going up.
Ranchers commonly use cottonseed and hay to feed their cattle during the winter months. Unlike corn, cotton is not widely grown in the Midwest and the supply has not been heavily affected by the drought. It has, however, met an enemy in Isaac.
Then the Rain Came
Beginning Aug. 28, the outlook for state agriculture, especially cotton farmers, took a turn for the worst. Isaac, a tropical storm that began in the Atlantic Ocean, had become a Category 1 hurricane by the time it made landfall late that Tuesday night near New Orleans. The storm then seemed to stand almost still, crawling north at 6 to 8 miles per hour. All the while, Isaac was dumping as much as 20 to 30 inches of rain on areas of the Gulf Coast.
The early assessment shows the state's biggest farm losses from Isaac will come in its cotton crop. One of the final stages before farmers harvest cotton is the boll, or flower, of the plant opening, which exposes the delicate white fibers and seeds of the cotton. During this stage, excessive water can be devastating to the quality and yield of the harvest.
"Once the cotton is open, it only gets worse when it rains on it, or it stays out there a long time," said Garraway, the vice president of Gaddis Farms.
"The quality factor goes down almost every time it rains."
The problem with assessing the effects of Isaac is that farmers won't know the full damage to cotton quality until after the harvest. Most cotton farmers harvest beginning the second week of September and are finished by the second week of November.
"The earlier the cotton (was planted), the worse," Garraway said. "I would think it had a pretty detrimental effect, especially on the earlier cotton. I don't know whether that's 10 percent—I don't know. It's certainly not the whole crop, but it's going to affect the yield some."
Deputy commissioner of the state Department of Agriculture and Commerce Andy Prosser doesn't expect Isaac's affect on the state's farmers to translate to higher prices in the stores. Farmers had already harvested most of their corn and rice in the state before the storm arrived.
He doesn't expect the rain to seriously damage soy crops, either.
"Keep in mind, in terms of the whole United States and the world market, Mississippi plays a very small roll in terms of the overall supply. So I don't think Hurricane Isaac will affect overall food costs," Prosser said.
During the worst of the story, some dairy and chicken farmers lost power in the state's six southern-most counties—Hancock, Harrison, Jackson, Pearl River, Stone and George—and parts of southwestern Mississippi. Prosser said that loss of power meant a loss of milk for dairy farmers.
"You have to milk cows every day, and if you can't keep your milk cold, you're eventually going to have to pour that out," Prosser told the JFP. "We did have some dairy farms that weren't able to keep their milk cold due to loss of power."
The problem for poultry farmers came after Isaac passed and typical late summer heat set in, without electricity to provide ventilation for the birds.
"Most of the temperatures after Isaac were still very high. So you had some poultry farms lose some chickens in the houses," Prosser said.
The losses were not large-scale, Prosser said, largely because most of the farmers had lived through 2005's Hurricane Katrina and were better prepared for Isaac.
"We did see and learn a lot of lessons from Katrina at the farm level, like having generators available (and) having extra fuel on hand to run those generators," Prosser said.
To Market, or Not
In addition to the damage from the rain, the drought has Kendall wondering how he'll ship the cotton crop he does yield. Once the crop is picked, spun, deseeded and bailed, Kendall and his team load the cotton on trucks and ship it to Vicksburg, where they load it on ships headed for clothing manufacturers in Asia.
The lack of rainfall on the northern section of the Mississippi River has translated into water levels so low that travel along the river here in the South is limited. Water levels in America's largest river are so low, in fact, that the U.S. Coast Guard had to shut down part of the river to traffic after a barge ran aground Aug. 22.
The Army National Guard has been dredging the river, a process that involved large mechanical dredgers that move sand and dirt from the bottom of the river to help make deeper passages for boats.
It is still unclear how long river waters will remain low, but some estimates say travel on the river could be difficult through most of the fall.
If Kendall is not able to ship the cotton down the Mississippi River, he will have to look at alternatives. His top alternative is to store the cotton until the river is back to navigable levels. While he does have some storage on his farm, it isn't enough to hold his entire crop, he said.
Another option is shipping the cotton by truck, but as prices on corn and other food commodities rise, so will diesel fuel, making that option more expensive than ever before. Kendall said he will have to find more storage if he is unable to get his cotton on ships after harvest.
Soybeans Survive, For Now
Corn is not the only crop affected by the nation's drought. Soy is another major cash crop in Mississippi, with statewide yields growing every year. Today, soybeans are selling at record prices as well—$15 to $17 a bushel. That's an increase of about $5 a bushel from last year.
Garroway, who also serves as the president of the Mississippi Soybean Association, said Gaddis workers began harvesting soybeans the first week in September.
He said he doesn't believe the rain from Hurricane Isaac really helped or hurt the soybeans, which are more resilient to wet conditions near harvesting time than cotton and less susceptible to drought than corn.
Prosser said on a statewide level, Hurricane Isaac did little to affect the soy crop.
"I still think we'll have a record crop of soy beans," Prosser said.
Gaddis Farms also ships most of its soybeans by way of the Mississippi River. Kendall said they have already begun looking into moving soybeans by truck. They have also begun preparing to store a lot of the soy, which they do not usually do. That means using less space to store corn.
"There's not enough storage in the state for all our crop, especially because we've got a big crop," Kendall said. "When soybeans are ready, they've got to be gathered and either stored or sold. We've got a lot of concerns about moving the soybeans as we harvest them."
When the Drought Does Come
Though relatively untouched by this year's dry spell, Mississippi is not immune to drought conditions. During a major drought in 1988, the state Department of Environmental Quality issued orders to Delta farmers to stop drawing water for irrigation from area streams. Not liking the DEQ's approach to the problem, supervisors in 17 counties in the Delta region decided they needed a publicly supported, non-regulatory agency to decide what to do in such situations.
In July 1989, 17 Delta counties created the Yazoo Mississippi Delta Joint Water Management District, known as YMD. Property taxes in the counties fund the program, which works to find new and more effective ways to irrigate the Delta's farmland and safeguard against future drought, without the DEQ's regulatory approach.
Dean Pennington, a former irrigation researcher at the University of Arizona and Mississippi State University, has been the executive director of YMD since January 1990. He said farmers in the Delta are using some new approaches to cut water usage and maximize the output on their land.
The Yazoo Water Management District's main goal is to find the balance between adequate water for farmers and maintaining substantial flow in streams and rivers for wildlife. Agricultural water supply in the Delta comes from shallow aquifers. Water for industrial uses and drinking water comes from deeper aquifers and is unaffected by the agricultural water supply.
Delta farmers use more irrigated water than any other group in Mississippi. The state issues permits for any water well with a diameter of six inches or larger. Delta farmers hold 75 percent of those permits in the state, while all others industries and citizens make up the other 25 percent. That, Pennington said, is why YMD is needed in the area. The most important thing his group promotes is conservation.
"(We) try to get landowners who are using water to be efficient and do not waste any," Pennington said.
The second thing is underused water supplies. The biggest source of water in Mississippi, of course, is the Mississippi River and its tributaries. No one directly uses the river to irrigate farms in the Delta; however, they do use it indirectly. When the river is high, its water seeps through the earth and into the aquifers.
At times when the river is low though, like it has been this summer due to the midwestern drought, water runs from the aquifers back into the river.
One current study for the district is finding how to redirect water from the Tallahatchie River to the Quiver River in Sunflower County. Moving the water would supply farmers with an alternative to ground water and allow them to store excess ground water for times of serious drought.
The U.S. Army Corps of Engineers is working with YMD to offer cost-sharing assistance to landowners to build on-farm storage reservoirs, similar to large catfish ponds, and tailwater recovery systems. Tailwater systems catch water runoff, either from rain or irrigation, which would normally drain off the fields and stores the water in large ponds.
"That water can be used to irrigate the field when it dries out, or that water is pumped into an above-ground reservoir where it can be held for several days, weeks or months and used as an irrigation water supply when (the field) dries out again," Pennington said.
Delta Farmers Advocating Resource Management, and the state Soil and Water Conservation Commission have pooled resources to help build such reservoir systems. Pennington said the Delta has close to 20 tailwater systems that can irrigate 300 to 500 acres each.
One of the most widely used new technologies in irrigation is known as Phaucet. The Delta has several hundred thousand acres that are irrigated using Polypipe, a thin, rollable pipe. Farmers poke holes in the pipes to allow water out to irrigate their fields.
The NRCS developed a computer program that can tell farmer the optimum number and size of holes to punch in the pipes for a given crop row, based on row length and water pressure from the well. The system allows farmers to get a much more evenly distributed irrigation than they were getting on their own.
"It's taken off. It is being very widely accepted," Pennington said of the program. "We started introducing people to that about three years ago, and landowners really like it."
There is little maintenance cost for a Phaucet system. All the farmers have to do is measure their rows and monitor water flow. With steady irrigation, fields produce more uniformly, which saves the farmers time and water.
Some early results show that Phaucet could reduce irrigation water usage by as much as 10 to 20 percent, Pennington said. "Some people suggest even more," he said.
At Mississippi State University, agriculture professors are researching an irrigation tool known as electronic moisture probes, Pennington said, which are not yet widely used in the state. The electronic monitors test the moisture level of the ground and wirelessly transmit the data to a computer. Pennington said he only knows of one or two landowners in the state who use the probes.
"It's one of those that's got potential. It needs a little more development. Landowners need to more fully appreciate the value of it. It's just now beginning to show up in this area," he said.
While new technological efforts may not be fully appreciated this year, Mississippi farmers know that it won't be long until their fields suffer from a drought just as the Midwest is getting hit now. When that happens, Delta farmers will look to YMD and others working to solve the problem of where and how to get the water they need to produce their yields.
"We haven't had the widespread drought in a long time like they're having now. The last two summers here, (though), we've had issues with pastures and ponds drying up and bad corn crops. I can relate," Kendall said. "Obviously, our hearts go out to the people in the Midwest, because we've been there. It's awful. It's horrible. We're not reveling in what's happened price-wise, but it has affected the price and we've benefitted from it."
Contact Jacob D. Fuller at [email protected]