Unpredictable weather resulted in declining production totals for some crops in Arkansas last year compared with 2021, and the Russian invasion of Ukraine led to higher prices for fertilizer and diesel fuel.
The amounts of corn, cotton and medium- and long-grain rice harvested in Arkansas last year were lower compared with 2021, but there was a slight increase in harvested soybeans. Only state-level crop production estimates for the 2022 crop year are publicly available right now, University of Arkansas System Division of Agriculture Extension Economist Hunter Biram said.
The U.S. Department of Agriculture will release its 2022 crop production report with final U.S. estimates on Thursday.
USDA's National Agricultural Statistics Service crop production totals for Arkansas in 2022 were 121,440,000 bushels of corn; 744,000,000 pounds of cotton; 80,684,000 hundredweights or 179,297,778 bushels of medium- and long-grain rice; and 166,950,000 bushels of soybeans, Biram said.
Crop production totals for Arkansas in 2021 were 152,720,000 bushels of corn; 592,800,000 pounds of cotton; 91,136,000 hundredweights or 202,524,444 bushels of medium- and long-grain rice; and 156,000,000 bushels of soybeans, Biram said.
"Rain kept people from getting out [in the fields] and that triggered a lot of losses immediately and later in the season, then we had drought, which triggered losses that showed up in lower yields for corn for Arkansas, and then you had the Mississippi River water levels affecting prices being offered by grain elevators," Biram said in an interview in late December.
It rained heavily last spring in Arkansas before severe drought swept across the state in summer and wet conditions resumed in early fall; the shifting severe wet and dry conditions last year created unexpected problems for farmers.
"I think we always need rain in agriculture, we could always stand to get our water tables replenished, but in the early part of the season, we had a lot of rain and that kept producers from getting out doing field work, so we there were a lot of prevent plant losses," Biram said.
Prevented planting is covered by the USDA Risk Management Agency's crop insurance program; it is essentially a risk management tool that helps producers recover some of their production costs to plant a crop and prepare a field, Biram said.
Prevented planting provisions in crop insurance policies give farmers coverage when extreme weather conditions prevent expected plantings of crops, according to the USDA Risk Management Agency website.
The USDA defines 'prevented planting' as a failure to plant an insured crop with appropriate equipment by the final planting date defined in an insurance policy or, if applicable, during the late planting period.
For Arkansas rice and corn producers, 81% of their losses recorded in the form of indemnities were prevented planting losses, Biram said.
"That tells us just how difficult it was for farmers to be able to get out and work in the fields, so what's the alternative? Plant later when the rain isn't as big of a problem," Biram said.
"The crop got in the ground, then we had pollination issues this summer, especially in corn, so we saw corn losses and corn yields were down as a result on the crop side of things, that was one of the issues with drought this summer."
As farmers prepared to harvest crops last fall, summer drought conditions led to depleted water levels on the Mississippi River, which affected exports of goods down river.
"The river levels were low and that caused barge rates to go up, which then caused local grain elevators -- grain buyers -- to lower the price that they offered to farmers," Biram said.
"So we saw farmers getting lower prices for their crop at a key time at harvest time in September, October and early November."
Fertilizer access and affordability was another issue for farmers already dealing with intermittent poor weather conditions.
Despite producing some nitrogen fertilizer domestically, the U.S. is the third-largest importer of nitrogen fertilizer in the world, and Russia and China are the top exporters, according to the USDA.
"When the war in Ukraine happened, there were a lot of supply chain disruptions, fertilizer being one of them," Biram said.
Prices for fertilizer and diesel fuel rose after Russia invaded Ukraine
"Not being able to move that fertilizer, that was going to increase prices. But now we're seeing that more fertilizer is being moved and we know that even though we have sanctions placed on Russia because of the Russia-Ukraine war, fertilizer is exempt from those sanctions. So we can still import Russian fertilizer despite what's going on, so just being able to move more fertilizer is going to lower that fertilizer price."
Nitrogen fertilizer prices may still be high relative to two years ago, but they have fallen some now, Biram said.
"The 2023 nitrogen fertilizer price is down across all crops about 5 or 6%, but still is high relative to 2021," Biram said.
The reason fertilizer prices have gone down some, Biram said, is that "that fertilizer is being moved upriver on the Mississippi River, and at the local level, when the input suppliers have the fertilizer on hand, and they're able to get the fertilizer to the farmer, and they're able to make those sales, we don't necessarily have to worry about large shocks to price."