GFB opens policy development with 2022 Commodity Conference
By Jennifer Whittaker and Jay Stone, Georgia Farm Bureau
Georgia Farm Bureau’s Commodity Advisory Committees officially started the organization’s policy development process on Aug. 11, during the GFB Commodity Conference at the Stone Mountain Evergreen Resort. The committee members heard updates on GFB-funded research, a general economic outlook, the Freedom to Farm Act, Farm Service Agency (FSA) programs, funds for in-state meat processing facilities, and water stewardship. The committees then met to consider changes to GFB’s policy stances relating to their respective commodities.
GFB funds agricultural research
The 2022 Georgia Farm Bureau Agricultural Research Initiatives grant recipients were announced during the GFB Commodity Conference. GFB has awarded $129,567 in grants to eight researchers at the UGA College of Agriculture & Environmental Sciences for studies addressing on-farm production issues Georgia beef, blackberry, blueberry, peach, pecan, vegetable, and row crop farmers are experiencing.
“Georgia Farm Bureau is committed to joining other ag organizations in supporting research that benefits Georgia farmers by addressing production, economic and marketing issues they are dealing with on their farms,” GFB President Tom McCall said.
Recipients and their projects are as follows:
Dr. Zilfina Ames: Develop a Sampling Method for Sap Nutrient Analysis for Blueberries & Blackberries to Increase Fertilizer Use Efficiency;
Dr. Brent Credille: Evaluation of the Impact Mass Medication Has on the Health of and Antibiotic Resistance in High-Risk Beef Stocker Calves;
Dr. Mark Czarnota: Propagation of Pecan Trees using Nodal Propagation;
Dr. Darren Henry: Do Growth Promoting Implants Improve the Sustainability of Beef production?
Dr. Rachel Itle: Exploring Novel Frost Protection Strategies for Blueberry & Peach Production;
Dr. Kevin Mis Solval: Improving the Post-Harvest Practices of Fruit & Vegetable Packing Operations with Virtual Tours;
Dr. Lawton Stewart: Grazing Cotton Residue to Decrease Hay Feeding (extension of ’21 project);
Dr. Simerjeet Virk: Identifying Cost-Effective Soil Sampling Strategies for Variable-Rate Liming and Fertilization in Georgia Row-Crops.
This is the fifth year GFB has awarded grants to assist Georgia researchers working to find solutions to production, economic and marketing issues facing Georgia farmers. Since 2018, GFB has awarded about $522,165 in research grants that have addressed beef, blackberry, blueberry, cotton, forage, Christmas, fruit & pecan tree, peach, peanut, poultry, soybean, row crop, and vegetable production issues.
Dorfman: economic data indicates recession less likely than reported
The U.S. employment rate, wages and consumers’ purchasing power are better indicators of whether we are experiencing a recession than inflation rates, State Fiscal Economist Jeffrey Dorfman said while speaking at the GFB Commodity Conference. Inflation is a general increase in the prices of goods and services accompanied by a fall in the purchasing power of money.
As of July, the U.S. inflation rate has averaged 8.33% for 2022 with a peak of 9.06% in June, according to the U.S. Department of Labor (DOL). The U.S. annual inflation rate increased from 1.8% for 2019 to 4.69% for 2021.
The U.S. hasn’t seen inflation rates this high since 1981, when the U.S. annual inflation rate was 10.35%, U.S. DOL records show. The U.S. annual inflation rate was 13.58% in 1980 and 11.22% in 1979.
“Inflation is at a 40-year high, and it will take time to return to normal,” Dorfman said. “It’s likely to be 4 to 5% by the end of 2022 and 3% by the end of 2023. We have to assume we won’t be back to 2% inflation until 2024. This is because inflation got into housing costs.”
Most developed nations try to sustain an inflation rate of around 2-3% through fiscal and monetary policy, according to the U.S. DOL.
Dorfman estimates farmers are experiencing inflation rates of 15-20% for prices of input costs for production agriculture.
Dorfman says the chances of the U.S. entering a recession are less likely than people think because: 1) on average, consumer incomes are higher than before February 2020, and are either even with or 3% ahead of inflation; 2) Americans saved a lot of money for 18 months during the pandemic; 3) debt levels are manageable to low; 4) household wealth is up as home equity is up 32% above inflation over the past two years; 5) employment rates are steady and businesses don’t want to fire workers because good employees are hard to find.
“People may not like gas and grocery prices, but we can still afford a better lifestyle than pre-pandemic,” Dorfman said. “Savings stayed elevated for 18 months until a return to normal in September 2021. We can expect strong consumer spending to continue for a while. There’s still a lot of catch-up spending to come.”
The Bureau of Economic Analysis reports the U.S. currently has $2.4 trillion in savings. Dorfman says flat consumer spending is the pessimistic case but isn’t the worst case that could happen. He predicts that government spending is very unlikely to fall.
In recent years the makeup of Georgia’s labor market has shifted with Georgians moving to better jobs, Dorfman said.
“We’ve lost jobs in the government, leisure/hospitality, construction, and services sectors but gained jobs in the trade/transportation/utilities, professional/business services, information, finance, and education/health sectors,” Dorfman said. “There are 4.6% more people working in Georgia than when Gov. Kemp took office and in general, they are better paying jobs.”
Company inventory to sale ratios became low during the pandemic because workers were scarce, demand for some goods was high and due to supply chain issues. Dorfman says if consumer demand slows due to inflation, businesses may be able to rebuild inventories.
“Nobody really wants to fire workers right now because workers are hard to come by,” Dorfman said.
Dorfman says any recession that occurs will be investment-focused. He points out that stock market value is still 20% above inflation over the past two years. With the Federal Reserve raising interest rates, Dorfman estimates investment will only drop enough to make the gross domestic product shrink by 1%.
Exports to Europe may decrease as European economies struggle with energy supplies and prices. According to the Trading Economics website, inflation rates for some European trading partners are as follows: France 6.1%; Germany 7.5%; Italy 7.9%; The United Kingdom 9.4%; Spain 10.8%; and Poland 15.6%.
Dorfman estimates farmers are experiencing inflation rates of 15-20% for prices of input costs for production agriculture.
Dixon: Practical implications of Freedom to Farm Act
The Freedom to Farm Act, which is now state law, protects Georgia farmers against nuisance lawsuits if they have been operating their farm for two years or more and are complying with all applicable state and federal requirements for their type of ag production.
Lawyer Buck Dixon, who helped Georgia Farm Bureau and other ag organizations get the Georgia General Assembly to pass the Freedom to Farm Act this year, gave an overview of the new law at the GFB Commodity Conference. Dixon is with the Troutman Pepper firm.
“The most significant change with the Freedom to Farm Act is that it eliminated the “changed conditions” concept,” Dixon said. “The right to farm is no longer tied to how long you’ve been operating in relation to your neighbors. It’s just how long you’ve been operating [minimum of two years] and if you’re a good actor [following existing regulations].”
Dixon said the new law also stipulates that only someone who owns property affected by an alleged nuisance can sue a farm owner. Coverage is also now based on “on-the-farm” instead of “off-the-farm” considerations.
“You can’t claim a nuisance just because you drive by a farm and don’t like a smell or some other action you experience,” Dixon said.
New farms gain coverage once they are in operation for two years.
“Under the old law [Right to Farm], if you started a farm near existing homes you’d never have qualified for protection,” Dixon said.
The new law, however, doesn’t give farm owners the ability to drastically change their existing farm operation, Dixon said.
“If you have been raising cattle but want to put in chicken houses, that could potentially be considered a new operation depending on the number of houses you build,” Dixon said.
Alleged nuisances resulting from negligent, improper or illegal operations are not protected by the Freedom to Farm Act, Dixon said.
Tripp: FSA is about much more than loans
Georgia Farm Service Agency (FSA) State Executive Director Arthur Tripp outlined the agency’s programs and encouraged Georgia farmers to participate. The FSA has two primary functions – providing disaster assistance and offering access to capital for farmers.
The agency provides a variety of loans, including farm ownership loans, operating loans, emergency loans, conservation loans, land contract guarantees and more.
FSA administers the USDA’s disaster assistance programs, including the Coronavirus Food Assistance Program (CFAP), the Livestock Indemnity Program (LIP), Emergency Assistance for Livestock, Honey Bees and Farm-raised Fish (ELAP), and the Emergency Relief Program (ERP), the ongoing version of the Wildfires and Hurricanes Indemnity Program-Pluss (WHIP+).
Under CFAP and other COVID-related programs, FSA provided $476 million to Georgia producers, Tripp said.
“We still had producers who did not know about it. That sort of thing just shouldn’t happen,” he said, noting that FSA staff is exploring ways to ensure producers know what federal programs are available to them.
Tripp asked farmers to help improve data available through the U.S. Drought Monitor by self-reporting conditions on their farms. To self-report, click here. (https://survey123.arcgis.com/share/850f937a1956425dab70cf3a79c64e8b).
Tripp discussed FSA’s efforts to advance agriculture through Farm-to-School grants, which provided between $50,000 and $500,000 to schools looking to establish or expand existing agricultural programs. FSA also offers up to $5,000 to help students purchase animals to enter in livestock shows.
“We have got to make sure that our young people have the opportunity to touch and taste and feel agriculture,” Tripp said. “It’s important. It’s the only way I feel that we will have the next generation of folks getting involved.”
For details on all of FSA’s programs, visit https://www.fsa.usda.gov/programs-and-services/index.
Black on meat processing, trade and farm-to-foodbank
Georgia Commissioner of Agriculture Gary Black provided information about efforts to establish meat-processing facilities in the state, the Department of Agriculture’s international trade work and the newly established farm-to-foodbank program.
Black said that with Georgia’s population at 11 million and growing, the need for in-state meat-processing plants must be addressed.
“We’ve got to solve this,” he said. “We’ve got to solve it ourselves. We can’t wait for somebody to come in and help us. What’s been the major deal with that? It has been financing.”
To that end, the Georgia General Assembly agreed to convert $7.8 million originally allotted for forest cleanup following Hurricane Michael into lendable capital under the Georgia Development Authority, which is lending the money at the prime rate for development or expansion of meat-processing plants. Loans are capped at $2 million.
Black mentioned in-state co-op processing organizations for peanuts could serve as a model for how producers could work together to establish meat-processing plants.
While addressing the meat-processing challenge at home, Black also noted the importance of continuously pursuing international trade.
“We’re back open for business,” he said, noting that Georgia Department of Agriculture staff has made trade-related visits to the Philippines and Taiwan, with another scheduled for Singapore in September. He emphasized that producers need to be involved in these trade missions.
The farm-to-foodbank program, funded with $800,000 in the state budget, is moving toward implementation, Black said. The process is being developed for implementation in the fall, and it will be set up so foodbanks apply for the funding to make purchases with Georgia fruit and vegetable growers. One key requirement will be that the foodbanks provide their purchase orders from Georgia growers.
Masters outlines water conservation projects
Georgia Water Planning & Policy Center (GWPPC) Director Mark Masters lauded Georgia farmers for their water conservation efforts, outlined the Georgia Flow Incentive Trust (GaFIT) and the GWPPC’s deep well project funded through a $50 million grant funded by the American Rescue Plan Act awarded to the GWPPC by Gov. Brian Kemp and Georgia's Water & Sewer Infrastructure Committee.
“I’m pretty excited to give y’all a presentation that I really would have liked to have given 15 years ago, but I get to give it today,” Masters said. “I want you to know that Georgia farmers continue to demonstrate outstanding stewardship of water.”
As evidence, Masters cited data gained from extensive extensive field mapping and water-metering across the state, years of peer-reviewed research and Georgia’s successful defense against a water lawsuit filed by the state of Florida in the U.S. Supreme Court.
Moving forward, Masters noted the need to maintain adequate streamflow to support habitat for endangered species in the region during extreme drought events. To that end, the GWPPC held its first auction under the GaFIT program. As part of this large-scale research project, farmers in the Ichawanochaway Creek Basin were able to bid for contracts to voluntarily limit irrigation on their farmland in 2022 during an online auction held in March.
Farmers submitting successful bids then entered into a contract to suspend irrigation in exchange for a per-acre payment if stream flows fell below 50 cubic feet per second (cfs) at the gage near Milford, Georgia. The Ichawanochaway Basin was chosen for the experiment because of its combination of water sources used for irrigation – surface water, Floridan aquifer groundwater and other deeper aquifers.
As of Aug. 11, Masters said the water flows haven’t fallen low enough to trigger payments, though with the uncertainty of the weather, it remains possible. Another auction is being planned for 2023.
Masters also updated the group on a GWPPC project that will provide cost-share to farmers in the Lower Flint River Basin to install deep aquifer wells to replace their use of surface water for irrigation during droughts. The project will support installation of approximately 240 wells over the next 4-5 years. In addition, funding to provide additional groundwater monitoring, modeling and other technical and policy work necessary to support development of a Habitat Conservation Plan is also included.
“The most certainty we can get for producers, farmers in the lower Flint in terms of endangered species comes in the form of a habitat conservation plan,” Masters said. “All the good work accomplished over the last 20 years has put us in a position to do just that. We have the opportunity to develop policy that gives our farmers certainty of access to the generally abundant water resources in South Georgia while making sure our natural systems are protected during drought.”