Virtually all of the corn and soybean production areas in the state are affected, according to information out today from the U.S Department of Agriculture (USDA).
Because of the situation, the USDA has listed 39 counties in eight states as primary natural disaster areas.
The counties in Arkansas are:
- Arkansas County
- Cleburne County
- Cleveland County
- Crittenden County
- Jefferson County
- Lee County
- Lonoke County
- Monroe County
- Phillips County
- Prairie County
- St. Francis County
The U.S. Drought Monitor currently reports that 61-percent of the continental United States is in a moderate to exceptional drought.
"Our hearts go out to all of those affected by this drought," said Vilsack. "President Obama and I are committed to ensuring that agriculture remains a bright spot in our nation's economy by sustaining the successes of America's farmers, ranchers, and rural communities through these difficult times. That's why USDA officials are fanning out to affected areas, to let our farmers and ranchers know that we stand with you and your communities when severe weather and natural disasters threaten to disrupt your livelihood. And that is also why it is important that Congress pass a food, farm and jobs bill that ensures a robust safety net for producers in times of need."
Increasingly hot and dry conditions from California to Delaware have damaged or slowed the maturation of crops such as corn and soybeans, as well as pasture and range land. Vilsack has instructed USDA subcabinet leaders to travel to affected areas to augment ongoing assistance from state-level USDA staff and provide guidance on the department's existing disaster resources. To deliver assistance to those who need it most, the Secretary last week effectively reduced the interest rate for emergency loans from 3.75-percent to 2.25-percent, while creating greater flexibility for ranchers within the Conservation Reserve Program (CRP) for emergency haying and grazing purposes. In addition, the disaster designations announced today fall under a new, streamlined process that simplifies Secretarial disaster designations and will result in a 40-percent reduction in processing time for most counties affected by disasters.
The Secretary of Agriculture is authorized to designate disaster counties to make disaster assistance programs available to farmers and ranchers. During times of need, USDA has historically responded to disasters across the country by providing direct support, disaster assistance, technical assistance, and access to credit. USDA's low-interest emergency loans have helped producers recover from losses due to drought, flooding and other natural disasters for decades. By reducing the interest rates to 2.25-percent, emergency loans immediately come into line with other rates in the marketplace and provide a much-needed resource for producers hoping to recover from production and physical losses associated with natural disasters.
USDA agencies have been working for weeks with state and local officials, as well as individuals, businesses, farmers and ranchers, as they begin the process of helping to get people back on their feet. USDA offers a variety of resources for states and individuals affected by the recent disasters.
Click here for additional information and updates about USDA's efforts.
The Obama Administration, with Agriculture Secretary Vilsack's leadership, has worked tirelessly to strengthen rural America, maintain a strong farm safety net, and create opportunities for America's farmers and ranchers. U.S. agriculture is currently experiencing one of its most productive periods in American history thanks to the productivity, resiliency, and resourcefulness of our producers. A strong farm safety net is important to sustain the success of American agriculture. USDA's crop insurance program currently insures 264 million acres, 1.14 million policies, and $110 billion worth of liability on about 500,000 farms. In response to tighter financial markets, USDA has expanded the availability of farm credit, helping struggling farmers refinance loans. In the past 3 years, USDA provided 103,000 loans to family farmers totaling $14.6 billion. Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers.
On July 11, USDA's World Agricultural Outlook Board cut the estimate for the 2012 U.S. corn crop by 1.82 billion bushels to "reflect expected impacts of persistent and extreme June and early-July dryness and heat across the central and eastern Corn Belt." The 12-percent cut, which left the projected U.S. corn production at 12.97 billion bushels, is a direct result of the nation's worst drought in a generation--since 1988. The big news in the reports was the fact that we brought the corn yield down to 146 bushels from 166 bushels, reflecting the rapid deterioration in crop conditions over the past 6 weeks. Immediately, markets were up--corn prices trading 15-20 cents higher--but came back down later in the day.
More than three-quarters of the U.S. corn (78-percent) and soybeans (77-percent) were within an area experiencing drought on July 10, according to the U.S. Drought Monitor.
Drought-free sections of the Midwest are now restricted to parts of western Iowa and the northernmost Corn Belt.
Drought now covers all, or virtually all, of the corn and soybean production areas in Illinois, Nebraska, Indiana, Kansas, Missouri, Colorado, Arkansas, Kentucky, and Tennessee. But because plantings were so strong early in the season, USDA is still forecasting the third largest corn crop in our nation's history.
The USDA says it's important to note that while this drought is significant, and many producers are struggling and will struggle, it is not yet in record territory.
In looking at precipitation in June, this year has been the 10th driest June over the past 118 years.
On food prices, the USDA says it's seeing an interesting phenomenon, detailed as follows:
New data on retail food prices came out yesterday. Bureau of Labor Statistics reports that food inflation for June 2012 was 2.7 percent, year over year. This is DOWN from 2.8 percent inflation last month. Food at home inflation was 2.6-percent in June, year over year, compared to 2.7-percent in May.
While we anticipate food prices to eventually follow grain and oilseed prices, the impacts will be far smaller and will take time to move through the system. While corn futures are up 30 percent from early June, cattle and hog futures have actually declined a bit, reflecting the fact that higher feed costs may result in some liquidation, at least over the next few months.
- Any impacts will be seen first and heaviest for beef, pork, poultry, and dairy, especially fluid milk.
- We will likely see impacts within 2 months for the aforementioned 4 categories. The full effects of the increase in corn prices for packaged and processed foods (cereal, corn flour, etc.) will likely take 10-12 months to move through the supermarket aisles.
- Historically, if the farm price of corn increases 50%, the retail shopping basket as measured by the CPI increases by 0.5 to 1%. More generally, as the overall commodity price index increases, about 10% of that increase is passed on to retail prices.
- Sweet corn, eaten by humans, is distinct from field corn and is not being heavily affected by adverse weather at this point.
- Soybean prices are also likely to be driven up due to the drought, and this will have impacts for the price of fats and oils.
- The July 25 update to our forecasts will include forecasts for 2013 as well as the information we have on the drought at the time of writing.
USDA Comes through for Arkansas, Makes Drought Disaster Declaration