Return to TFB Main Page
Return to Texas Agriculture Archive

January 5, 2001

Entire state declared
disaster area

Agriculture Secretary Dan Glickman has declared the entire Lone Star State an agriculture disaster area, making Texas producers eligible for USDA emergency loans because of losses caused by drought, excessive heat and other disasters that occurred during 2000.

"The excessive heat and drought have made a devastating year for farmers in Texas and all over the south," Glickman said. "USDA is working to help farmers in Texas and other states during these difficult times."

Prior to the announcement, producers in 184 of the 254 counties in Texas were eligible for the emergency loans. Now, producers across all of Texas, in addition to contiguous counties in adjacent states, are eligible.

The Texas Cooperative Extension estimates drought losses of $1.096 billion this year. This is on top of drought losses suffered in four of the last five years.

Texas Farm Bureau President Donald Patman told the Dallas Morning News he was happy with Glickman's decision.

"I'm glad to see the secretary do this," the cotton, grain and cattle producer said. "It's not a cure-all, but it will help some people."

The designation makes all qualified family-sized farm operators in both primary and contiguous counties eligible for low-interest emergency loans from the Farm Service Agency. Farmers have eight months to apply for loans to help cover part of their actual losses. FSA considers each loan application on its own merits, taking into account the extent of losses, security available, repayment ability and other eligibility requirements.

The designation may also allow ranchers statewide to apply for the federal livestock assistance program, which offers cost-sharing to cover feed expenses. Sign-up for that program begins Jan. 16.

Contact your local FSA office for more information and eligibility on these loan programs.

Fertilizer crunch possible

From aluminum manufacturers to petroleum-based fertilizer producers, companies are selling the energy—electricity and natural gas—they would normally use to make their products, back to power companies for huge profits.

This winter's fuel crunch is showing companies that they can make more money selling energy allotted them by long-standing contracts with power generators, than manufacturing their typical products. The shifts by large industrial consumers of energy is described by analysts as unprecedented and is expected to free up more fuel for households and businesses this winter. Shortages of fertilizer and aluminum, however, could be troublesome for the economy as a whole and impact traditional customers.

"The fertilizer picture is particularly worrying us because we don't know what they're going to use to grow crops with," said David Wyss, chief economist at Standard & Poor's.

Terra Industries Inc. of Sioux City, Iowa, has closed three of its six ammonia plants and is selling its December allotment of natural gas back to the market at current rates, above $7 per million cubic feet, which are about double the rates of last year. If the current shortages and high market rates persist, Terra's chief administrative officer Jack Rosenbury says "it's going to be a real problem" for farmers.

Rosenbury estimates out of the total U.S. production capacity of 28 million tons of ammonia, about 4 million tons isn't operating now.

"Could we be short of fertilizer next spring? It's possible that farmers will not have as much as they want," he said.

EU mad cow scare could
boost U.S. soybean exports

A European Union ban on the use of meat and bone meal in animal feed to prevent the spread of mad cow disease could help American farmers as the EU has said it will need an extra 1.3 million tons of soybean meal.

The increased U.S exports should translate into an increase in soybean prices. In its monthly estimate of world agricultural supply and demand, the USDA predicted that prices for this year's U.S. soybean crop will average about $4.80 per bushel, up 10 cents from last month's projection and 17 cents above the average price for the 1999 crop.

Bill Biedermann, a commodity analyst with Allendale Inc., said that while the EU's decision undoubtedly would give the soybean industry a positive boost, he cautioned that "it may not have the sustained benefit that we would wish it to have" because of competition from soybean crops in Argentina and Brazil.

Notable Quotables

"These are unprecedented standards. The kind of level of reductions that are being talked about are going to require technology that is not commercially available yet."

—Allen Schaeffer, executive director of the Diesel Technology Forum, commenting on new regulations approved by the Clinton administration to cut air pollution from heavy-duty trucks and buses to meet stringent emission limits and require refiners to produce virtually sulfur-free diesel fuel.