Agriculture: Backbone of Louisiana’s Economy

This publication tabulates the value of Louisiana agriculture in 2008. Agents and specialists of the Louisiana Cooperative Extension Service, as well as other agencies – both private and public – compiled the data. Their analysis focuses on the animal, forestry, fisheries, plant and wildlife commodities that comprise our vital agricultural industry. The agricultural industry continues to contribute significantly to the state’s economy with the potential for increased benefits through value-added processing.

The 2008 production year for the food and fiber sector of the state started with as much optimism as has been experienced in several years. Two years removed from hurricanes Katrina and Rita, agricultural production in the state had essentially completed its long road to recovery from the immediate and lingering effects of the storms. Strong domestic and international demand for many agricultural commodities, the growing interest in biofuel production and increased activity of speculative buyers in agriculture futures markets all helped to create significantly higher prices for many agricultural commodities.

This optimism was fairly short-lived as sharp increases in many input prices quickly eroded projected profit margins for producers. Although this was felt throughout the agricultural and forestry industries, the impact was greater for commodities whose price increases failed to keep pace with increasing production costs. And just as the projected financial situation of agricultural producers became more precarious so, too, did the production environment.

While less-than-ideal weather conditions in the early part of 2008 created difficulty for some agricultural commodities, none were spared with the arrivals of hurricanes Gustav and Ike. These two hurricanes made landfall in Louisiana within one month of each other. Extreme rainfall associated with Hurricane Gustav inundated the agricultural sector. The tidal surge from Hurricane Ike, like that experienced during hurricanes Katrina and Rita, also had negative effects on agricultural production in 2008. Similarly, the aftermath of Hurricane Ike is expected to last for years – increasing salinity levels in soils and irrigation systems. Cotton, sweet potatoes, soybeans and pecan production bore the brunt of the storm, as a percentage of their average farm-gate values. For crops like rice and sugarcane, the effects of high salt levels on production and farm returns will not be fully realized until for the next few years.

What little optimism remained after record input costs and devastation from two major hurricanes was further tested by sharply lower commodity prices at the end of 2008. Although commodity prices reached record levels in the first half of 2008, growing concerns about general economic conditions and its implication for consumption and investment patterns, domestically and internationally, put tremendous downward pressure on commodity prices.

Although the agricultural sector certainly encountered many challenges in 2008, it was able to generate farm-gate sales totaling $5.3 billion. When those commodities were cleaned, processed and packaged, the value-added brought in nearly $4.1 billion, for a total contribution to our state’s economy of nearly $9.5 billion. Although farm-gate values and levels for value added for specific commodities may have changed noticeably from last year because of lower output caused by the hurricanes, lower commodity prices or significant changes in acreages, the food and fiber sector continues to be vital to the state’s economy. Cutting-edge research and extension education and outreach efforts remain critical to sustaining these significant economic benefits.

Many communities depend on agriculture, forestry, fisheries and wildlife for local jobs and their economic well-being. The heart of agronomic agriculture is found in northeastern, southwestern and south central Louisiana. Forestry production is mostly in the hill parishes, and the fisheries production takes place mostly along the coast, although the aquaculture production of catfish is located mainly in the northeast Louisiana Delta.

Agriculture, forestry and fisheries are more than a business to those who work in it day-to-day. It truly is a way of life. Families have lived on many of these farms, forest lands or in fishing villages for generations following a preferred way of life even though it means hard work, many hours, high risks and sometimes low incomes.

With the expansion of the biofuel industry, commodity prices have improved for certain commodities. However, as input costs continue to be at historical levels, however, prices received by producers will continue to be a serious concern. Each new production season has risks associated with commodity prices, trade agreements and higher input costs, as well as uncertainty related to the weather. These conditions make the discovery and adoption of new agricultural technology developed by the LSU AgCenter more important than ever to our state’s producers.

Agriculture is a highly sophisticated segment of the national and world economy, becoming increasingly moreso every year. That is the reason we at the LSU Agricultural Center continue to support agriculture and consumers with factual information provided by a well-trained faculty of extension agents, specialists and campus/station-based research scientists.

Those of us in the LSU Agricultural Center (the Louisiana Cooperative Extension Service and the Louisiana Agricultural Experiment Station) are proud to be part of Louisiana’s agricultural industry, and we will continue to serve that industry and the citizens across the state of Louisiana for years to come.

Sincerely,

Paul D. Coreil
Vice Chancellor, LSU Agricultural Center, and
Director, Louisiana Cooperative Extension Service