Farmers on knife edge as bad weather, tariff war, shutdown exact toll

Justin Jones drove his muddy GMC truck Tuesday through one of his pecan orchards, new gaps between rows of trees spotted with smoldering ash heaps that days before had been house-high piles of broken limbs and toppled trunks brought down by Hurricane Michael.

“Looks like a war zone, doesn’t it?” he said.

Earlier in the day, he had stood in a horizon-wide cotton field with a broad swath of bedraggled plants still white, the drooping cotton unpickable and ruined by unceasing winter rains.

The old-timers tell him they haven’t seen anything like it in southwest Georgia, the 40-year-old Jones said.

The burden of disastrous weather carried by Georgia farmers has been made heavier by politics. First, Chinese tariffs imposed in July on Georgia farm produce, a result of President Donald Trump's trade war, cut profits or stopped sales. Then, the partial government shutdown, a result of the political fight over funding for a border wall with Mexico, closed down U.S. Department of Agriculture services for five weeks at a critical time.

Farmers plan crops, prepare fields and line up financing January to March. But most USDA functions and local Farm Service Agency offices closed in late December and most of January. That left farmers behind and prevented them from applying for loans, collecting federal disaster aid and crop insurance and trade mitigation payments which were given to offset a portion of tariff losses. In a financially pinched time, that money would be useful.

The closing also delayed USDA crop counts and forecasts, which farmers use to determine what and how much of crops to plant.

Without that information, “We’re flying blind,” Jones said.

The weather has always been part of the equation that makes farming something between a business proposition and a gambling addiction. Politics also plays a role, but its effects are painfully magnified this year.

That hasn’t persuaded farmers they were wrong in their election choice — 75 percent of Lee County voters backed Trump in 2016. Multiple conversations over three days didn’t turn up anyone who had changed their mind.

Young farmer Reese Foster prepares to power-wash a gigantic cotton picker at his home near Dawson, Georgia. Foster and many other farmers are carrying over debt into 2019 because bad weather ruined crops. Chinese tariffs are also destabilizing the market for cotton, pecans, peanuts and other Georgia crops, which has a broader economic impact on the state. HYOSUB SHIN / HSHIN@AJC.COM

icon to expand image

Twenty-two year old Reese Foster, who learned farming working for others, lost a lot of money and sleep his first year farming 750 acres of cotton and corn full-time for himself. He believes the current pain will pay off in future price increases and fair trade.

“In the long term what [Trump] is doing will help us,” he said.

Then he added: “I hope.”

Agriculture is Georgia's largest industry, bringing in $73.3 billion a year and employing one in seven state workers, according to the University of Georgia Center for Agribusiness and Economic Development. When the industry gets shaken, all of Georgia trembles. Crops losses were $2.5 billion. That ripples short-term through the economy in fewer pieces of equipment sold, defaulted loans, families not going out to eat, or maybe even no new shoes for the kids.

A sign in the Flint Ag & Turf Division’s John Deere dealership north of Albany promotes disaster assistance for its battered customers who owe money. General Manager Brian Schneider said the business has seen a decrease in maintenance work done, because harvesting equipment was used less because of the disastrous weather.

“Some of the smaller and middle-sized farmers every year have been scratching to get by,” he said.

After a second year of bad weather — Hurricane Irma and tornadoes did damage in 2017 — there’s a sense that people are waiting to see “who’s going to make it and who’s not,” Schneider said.

“Who would have ever thought we’d see a Category 3 hurricane in this part of Georgia?” said Jones, who had 2,700 acres of cotton in the ground and 500 acres of pecan trees when Michael hit in October. Seventy Georgia counties fell under a Federal Emergency Management Agency disaster declaration, with Lee County in the middle of the 18 that were hit hardest.

It destroyed crops and timber and damaged land, which many farmers use as collateral to finance farming loans. The crop losses coupled with damaged property means farmers are rolling up more debt with less collateral. That creates more financial stress for banks.

It’s particularly heartbreaking because farmers thought early in the fall they would pay off 2017’s debts with ease. The cotton fields were so white they looked like they had been snowed on, and pecan limbs were weighed down with nuts. The corn was in, and peanuts were less affected by the weather.

“This was going to be the year that we are going to get some back from Irma,” Jones thought.

Then after Michael, rains started. A storm in the first week of December brought seven inches, followed week to week by multi-inch rains. It rotted nuts on the ground and prevented heavy harvesting machines from entering fields.

Typically, crop losses push up prices on what’s left, helping offset losses. But China, earlier in 2018, responded to Trump’s tariffs on Chinese products with tariffs on Georgia staples such as pecans, cotton and peanuts. The Chinese, who had purchased the majority of the pecan crop in recent years, nearly stopped buying. The tariffs, coupled with cheap foreign imports from Mexico and South Africa, upended the markets and is keeping prices low.

Instead, of bumper crops and solid prices, Jones lost money. He shorted paying back his bank loan by 38 percent. He is rolling that debt into a new loan for 2019.

“I’ve never been worried about signing notes that I can’t pay back. But this one is going to be tough,” he said.

The financial ripple effects of the storm will carry forward for years. The state pitched in with $55 million for low-interest loans to help farmers stabilize their finances and bridge them to when the federal money starts flowing, and it gave $20 million for cleanup. The General Assembly was weighing Friday adding another $10 million for loans.

Pecan farmer Trey Pippin walks past a pile of pecan trees broken and uprooted by Hurricane Michael at his farm near Albany. Pippin and other south Georgia farmers are struggling with the results of two years of bad weather, Chinese tariffs and the government shutdown. HYOSUB SHIN / HSHIN@AJC.COM

icon to expand image

Trey Pippin, 41, a third-generation orchardist with 2,300 acres in pecans, lost 12,554 trees, about 25 percent of his total. Thousands of other trees are damaged and will produce less or maybe die next year. That will affect his income for a decade, which is how long it takes for a newly planted tree to be productive. Like other growers, he is shelling out money for cleanup and getting ready for next year while waiting for promised federal relief and delayed crop insurance payments.

“We paid for the insurance, so you should process the insurance claims,” Pippin said.

He hopes to break even this year, after he collects insurance and disaster payments.

Farm Service Agency offices reopened in January, but many workers are still clearing last year’s backlog of paperwork at a time when they usually prepare loans for the coming year. FSA loans typically go to small and beginning farmers.

Sedrick Rowe, 27, is waiting on the FSA before beginning his third year farming. He works as the grain house manager in Fort Valley State University’s agriculture program, and on the side is developing a niche farm for organic peanuts. He started two years ago with a five-acre plot in Dougherty County.

He has been unable to get his FSA loan processed. Agency workers were finishing the paperwork from last year, he said.

“Just the delay and push back is making it more difficult for new farmers to actually get in that door,” he said.

He will be delayed by about a month, but believes everything ought to be set by April or May, which is planting time.

That assumes that the government won’t get shut down again. Congress and Trump have until Feb. 15 to reach a new deal on immigration or face that possibility.

A worker removes hurricane-damaged pecan trees at Pippin Farms outside Albany. The 2,300 acre farm lost about 25 percent of its trees in a year when Georgia pecan farmers are also dealing with heavy tariffs imposed by the Chinese as part of the trade war. HYOSUB SHIN / HSHIN@AJC.COM

icon to expand image

Building a border wall to Trump’s specifications is not a hot issue for some Georgia farmers. Harvesting cotton, peanuts and pecans is heavily mechanized and less dependent on migrant workers than crops such as Vidalia onions. Sure, he wants secure borders, Jones said, but the particular method “is not something I lose sleep over.”

Voting for Trump didn’t mean he was farmers’ first candidate of choice, but he was the Republican, and the party represents the community on touchstone conservative issues, such as abortion, reigning in business regulation or minimum wage raises.

Pippin said, “It’s not like we’ve been loving all [Trump’s] actions.”

He believes in global warming, for instance, while the president has called it a hoax.

“You can’t deny that the weather is changing,” Pippin said. The recent unprecedented storms are proof of that, he said.

But many in the region believe Trump is championing them on key issues. Farmers, competing with cheap imports from Mexico, China and other countries, want him to challenge trade pacts they believe are unfair, and they understand that imposing retaliatory tariffs to try to get a better deal is part of a long-term strategy. They’ve developed patience and nerve from their work and say they can withstand the pain for positive results.

It if works, Jones said, it bodes well for his family’s future.

“I have a five-year-old that if he could ride with me every day, he would,” he said. “He is ate up with it. If he wants to do it, I plan to have a farm left for him to come back to.”

At $73.3 billion, agriculture is Georgia’s largest industry. Jobs of one in seven workers are tied to agri-business. October’s Hurricane Michael devastated the industry, affecting 70 counties. The financial repercussions — from Georgia incomes to state and federal taxes either collected or paid out in more than $100 million in disaster and loan aid — will last for years.