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Drought Hits Georgia Farmers' Wallets Hard

This year's drought will cost Georgia farmers an estimated $689 million on their summer crops, say University of Georgia agricultural economists.

The drought has also forced farmers to use more irrigation, driving costs up another $50 million. Growers irrigate 54 percent of the state's major row crops. With the higher irrigation costs added in, Georgia farmers' total estimated loss this summer is $739 million -- so far.

Losses Estimated on Nine Summer Crops

"These losses represent about 39 percent of a normal year's production," said John McKissick, an economist with the UGA College of Agricultural and Environmental Sciences.

McKissick and a team of economists at the CAES Center for Agribusiness and Economic Development calculated the farm losses using U.S. Department of Agriculture emergency declaration surveys.

The Georgia summer crops included in their loss report are cotton, peanuts, soybeans, corn, tobacco, pecans, hay, silage and pastures.

McKissick said the losses in their report comprise a conservative estimate. They don't include the likely significant losses in fruit and vegetable crops and in ornamental horticulture.

"We also haven't included the losses resulting from price discounts due to reduced-quality crops," he said. Peanuts, cotton and corn are all expected to suffer price discounts due to the drought.

Cotton Is Big Loser

The largest anticipated loss is in cotton. The state's No. 1 row crop should end the season with a $233 million loss.

The next highest losses can be found in crops directly linked to beef and dairy cattle.

"Pasture losses are pegged at $177 million, hay at $89 million and silage at $3.5 million," McKissick said. "These losses are particularly hard on beef and dairy operations, as forage crops aren't generally covered by crop insurance."

McKissick said beef and dairy farmers have suffered losses, too, such as lower weight gains, liquidation of herds and the costs of replacement feed. These losses aren't included in the estimated loss figures.

Farmers Aren't Suffering Alone

The farm losses hurt other businesses as well. When farmers cut down on inputs like fertilizer and other chemicals, the economy suffers.

"Each dollar of crop production adds about another 50 cents to the local economy from input suppliers' employment, and associated costs ripple through the economy," McKissick said.

"Since the drought developed early in the growing season," he said, "not all of the impact will be felt this year. Fertilizers and other inputs were purchased and applied before the crops were planted."

McKissick says next year may prove to be especially hard for input suppliers, as some farmers face financial ruin from the drought.

Crop processors will soon be hit directly by the drought's impact. "Cotton gins won't have enough cotton to gin, cottonseed oil processors won't have as much seed to crush, peanut and tobacco warehouses will be partially empty," he said.

"In the fall, pecan processors will be operating at partial capacity," he said. "All these businesses are directly dependent on agricultural production."

(Sharon Omahen is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.)

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