The most recent drought monitor paints an improved picture for California and parts of the West, but as drought creates a dire situation for farmers in the Southern Plains, National Sorghum Producers is not only concerned about the financial outlook for 2023, but how disaster aid payments will be dispersed for last year’s crops.
More than half of Kansas is in extreme to exceptional drought, the two most extreme drought conditions displayed on the weekly drought monitor. More than half of Oklahoma is experiencing severe drought. And in Texas, all but the far eastern portion of the state, as well as the western tip of Texas, is seeing some level of dryness, with the worst parked over the Panhandle and a pocket in the south central part of the state.
The drought was already bad, but severe weather this week caused conditions to worsen. Farmers in the Southern Plains are still trying to assess damage caused by the high winds earlier this week. Some areas of Texas saw hurricane-force winds top 100 miles per hour.
NOAA’s seasonal drought outlook paints a dreary picture for parts of the Plains. The shades of brown indicate where NOAA thinks drought will persist throughout spring, and if that outlook comes to fruition, the area of the U.S. that relies heavily on wheat and sorghum, will see drought eat into crop yields once again.
Issues with ERP Phase 2 Payments and Process
National Sorghum Producers CEO Tim Lust says growers are still trying to recover from last year, as sorghum producers saw the worst yields since 1960. In fact, Lust says the U.S. exported more sorghum in 2021 than the entire country produced in 2022, which is a sign of just how severe of an impact the drought had on last year’s crop.
Now, Lust is severely concerned about sorghum producers’ financial health. He says not only are farmers already revising their spring cropping plans, they’re facing high input costs after a year of low income due to a poor crop. And with continued drought, National Sorghum Producers (NSP) is concerned how the 2022 disaster aid money through Emergency Relief Program Phase 2 (ERP 2) is currently being dispersed.
“Obviously, we were very happy to see legislation in the December bill that provided assistance for 2022,” says Lust. “One of the things that we have certainly been talking about is how that is implemented and what that looks like. The ERP 1 model that was used for 2020 and 2021 worked very well. Our board and leadership both have grave concerns about the ERP 2 methodology and what that looks like. And so certainly a lot of concerns over how exactly the ’22 disaster is implemented.”
Paul Neiffer, a farm CPA, says one issue with the changes to Phase 2 of the program is it’s so complex. Phase 1 came with few farmer complaints, but Phase 2 is a different story. Not only does ERP Phase 2 come with a maximum $2,000 payment, it requires farmers to produce their tax records to qualify for the relief.
Neiffer says the calculation of the payment amount can be very complicated, but says it’s based on the following:
- Taking the producer’s benchmark revenue and multiply it by a factor of 70%, then subtract
- The producer’s disaster year benchmark revenue, then subtract
- Any Phase 1 payments received for the applicable disaster year, then subtract
- Net CFAP, net WHIP+, net 2020 Quality Loss Adjustment payments, if the calculation is for the 2020 disaster year.
Disaster Aid in the Next Farm Bill?
Beyond ERP 2, another focus is the Farm Bill. Lust says with the amount of ad hoc disaster aid that’s been allocated the past six years, he thinks there are ways to create a better safety net within Title One of the Farm Bill that includes disaster aid, without negatively impacting crop insurance.
But beyond legislation, Lust says moisture and some relief from Mother Nature would go a long way in changing the trajectory- and outlook- for the 2023 crop.
“It needs to rain,” says Lust. “We’re already into March of 2023, and we’re looking at another crop already going in the ground in South Texas. Planting is also happening all the way up into Central Texas,” says Lust. “And so, hopefully, we have some indications of a weather pattern break. We remain hopeful, I think in agriculture, and in the sorghum belt recently, you have to remain hopeful, but certainly a challenging couple of years and challenging for a lot of these areas in the sorghum belt today.”
Lust says there are also indications farmers in the drought-stricken areas may switch their planting plans, and go toward more sorghum. With the possibility of additional acres, he’s hopeful the weather pattern starts to change and U.S. sorghum farmers can see improved yields this year.
