Arkansas Agriculture - Spring 2020 by Arkansas Farm Bureau

SPR ING 2 0 2 0

Feeling the COVID-19 Impact Plus:

Hard Hits for Softwood Timber

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;¢ FALL 2019

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Arkansas Agriculture

ARKANSAS FARM BUREAU • FALL 2019

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FE ATURES Guest Column AFBF President Zippy Duvall | Page 3 The COVID-19 Impact Jessica Burkham | Page 6 Softwood Timber Market Woes from COVID-19 Pandemic Matthew Pelkki | Page 18

COLUMNS

Ag Law Update

Harrison Pittman | Page 32

COVER DESIGN by Bryan Pistole n

SPRING 2020

Edition 57

GuestCOLUMN Vincent “Zippy” Duvall, a poultry, cattle and hay producer from Greene County, Ga., is the 12th president of the American Farm Bureau Federation.

By Zippy Duvall

twitter.com/@ZippyDuvall

Taking Control in Stressful Times

o say that 2020 has been stressful would be an understatement. We started the year with weather disasters, then followed that up with COVID-19 and now we are saddened to watch the social unrest that’s happening across our country. For farmers and ranchers, volatility and difficulty are nothing new, but that doesn’t mean they don’t take their toll on us. It’s important to acknowledge and talk about the stresses we’re facing. But it’s also important to recognize ways we can take control and make things better — to improve our farm state of mind. One way to make things better is just talking about it. When I went on a radio show recently to talk about the loss of my wife, Bonnie, it was eye-opening to me how much it helped to do something we farmers and ranchers don’t often do — open up and talk about our feelings. It was like a weight was lifted off my shoulders. I had been carrying that weight on my own, but once I talked about my emotions it was as if all the listeners were helping me carry that weight. My story is very different from the experience of someone else, but the common thread is the power of sharing our load. If you’re going through a difficult time, please reach out to a friend, your pastor, or a family member you can trust. Let someone help you carry your load. And if you’re that friend, pastor or family member who sees someone struggling or just not seeming like himself or herself, please offer to listen. Just listen and give that person that chance to unload some of the burden. Some of us might feel we’re ill-equipped to help someone who is depressed or stressed, but anyone who is willing to help can do so. The American Farm Bureau is offering free training to any Farm Bureau member

who wants to learn about how to get someone talking, the right questions to ask, and how to get more help for someone who may be in crisis. Developed by experts at Michigan State University Extension, this online training will give people the skills needed to spot the warning signs of stress and suicide, and how to communicate and connect farmers and ranchers with resources to help them. I hope you’ll check out our Rural Resilience Training and let others know about this free resource. We never know when we might be called on to help someone who is in trouble, so it’s good to be ready. There are also a lot of tips and resources on the American Farm Bureau’s Farm State of Mind web page, such as signs of stress, conversation starters and links to more resources, including the national suicide prevention hotline. As with many issues, there are plenty of resources out there, but we just need to make it a priority. Resources don’t do any good unless we believe using them is important. Folks, rural stress is a real and growing problem, and addressing it is important. As many of us or our friends, family and neighbors go through a tough time, let’s not push this aside and say, “It will pass,” “Just get over it,” or “That’s not my problem.” That’s not how mental health works. This challenge is just as important as anything else that affects the health of our farms and ranches and our families. So let’s deal with it head-on by talking about it, learning about it and sharing our load. These are strange and troubling days — no doubt about it. We don’t have control over prices, weather, global politics or pandemics. But we do have control over how we react and respond. Let’s talk about it and equip ourselves with the knowledge to do whatever is in our power and help each other get through these stressful times. *

“It’s important to acknowledge and talk about the stresses we’re facing. But it’s also important to recognize ways we can take control and make things better — to improve our farm state of mind.”

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

EST.1974 An official publication of Arkansas Farm Bureau Federation distributed to more than 43,000 farming and ranching households in Arkansas. SUBSCRIPTIONS

Included in membership dues ARKANSAS FARM BUREAU OFFICERS:

President • Rich Hillman, Carlisle Vice President • Mike Freeze, Little Rock Secretary/Treasurer • Dan Wright, Waldron Executive Vice President • Warren Carter, Little Rock

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Arkansas Agriculture is published quarterly by the Arkansas Farm Bureau Federation 10720 Kanis Rd., Little Rock, AR 72211 POSTMASTER: Send address changes to Arkansas Agriculture, P.O. Box 31, Little Rock, AR 72203

WE APPRECIATE YOUR BUSINESS!

Issue #57 Publisher assumes no responsibility for any errors or omissions. All rights reserved. Reproduction without permission is prohibited. The Arkansas Farm Bureau Federation reserves the right to accept or reject all advertising requests. Send comments to: arkansasagriculture@arfb.com

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

FOOD + FUEL

U.S. soybean farmers grow versatile and renewable soybeans to help meet food, feed and fuel demand globally. Soybeans are one of many choices we have to meet a range of needs for protein, as well as fats and oils. That’s good news, because when it comes to providing food or renewable alternatives to petroleum, we don’t have to choose. Here’s a look at how soybeans in the United States are being used.

80 % MEAL

The primary component of soybeans is meal.

20 % OIL

The other soybean component is oil.

61% FOOD

97%

ANIMAL FEED

Sixty-one percent of soybean oil is used for frying and baking food, as a vegetable oil and as an ingredient in foods such as salad dressings and margarines.

Ninety-seven percent of U.S. soybean meal is used to feed poultry and livestock.

31% BIODIESEL & BIOHEAT

FOOD PRODUCTS

Thirty-one percent of soybean oil is used for biodiesel and Bioheat.

Three percent of soybean meal is used in food products such as protein alternatives and soybean milk.

8% INDUSTRIAL USES

The COVID-19

Impact What Arkansas Farmers and Ranchers Need to Know

By Jessica Burkham

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;¢ SPRING 2020

The global COVID-19 outbreak has brought upheaval to our nation and the world. Agriculture has not been spared, as many producers experienced uncertainty related to access to labor, sharp declines in commodity prices and supply chain disruptions. As states, municipalities, businesses and the economy began to shutter, panic buying and shifts in consumer habits arose due to restaurant closures and consumers eating most of their meals at home. continued on page 8>>

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;˘ SPRING 2020

<<continued from page 7

To provide some reassurance and certainty to consumers and the food production industry, the federal government acted. Specifically, in midMarch, the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Agency designated the entire food and agriculture production chain as critical infrastructure. This designation recognized workers in the food production supply chain as crucial and states should also prioritize them as “essential.” H-2A and COVID-19 Agriculture producers understand and recognize food security is critical for national security. Ensuring high-quality food products are readily available to consumers is the top priority for our farmers and ranchers, especially in today’s climate. However, a critical piece in the food supply chain is access to a reliable labor force. Many Arkansas producers utilize the H-2A Visa Program – also known as the

temporary agricultural workers program – which helps producers fill employment gaps by hiring workers from other countries. In Arkansas, guest workers through the H-2A program have historically been concentrated on specialty crop operations, but, the growing lack of qualified domestic labor has led to the increased adoption of guest workers in row crop, livestock and forest-product industries. While domestic unemployment has reached record highs due to COVID-19, government financial support programs have been made readily available to provide assistance to unemployed individuals. Additionally, jobs in agriculture are physically demanding and often times occur in unfavorable weather conditions. To most U.S. residents seeking employment, these conditions are not attractive. Yet, for many prospective workers from other countries, these jobs present real economic opportunities. COVID-19 presented additional challenges to an already cumbersome H-2A program. For example,

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

as the United States and other nations worked to address COVID-19 by limiting travel and implementing stay at home orders, farmers faced delays in visa processing and approval for their H-2A workers. Due to social distancing precautions, U.S. embassies and consulates around the globe suspended visa services, leaving many H-2A laborers unable to travel to the United States to fulfill their work contracts. In response, the Department of Agriculture (USDA) and the Department of Labor (DOL) formed a partnership to minimize the disruption of the agricultural workforce. Flexibilities were implemented to process H-2A visa applications on an emergency basis through interview waivers, and other mechanisms, to allow workers to travel to their farm of employment. In the interim, Congressman Rick Crawford, Arkansas Farm Bureau and the University of Arkansas Cooperative Extension Services, joined forces and launched the Arkansas Farm Corps program to address long-standing labor issues in production agriculture. continued on page 10>>

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;˘ SPRING 2020

<<continued from page 9

The program connects National Guard and Reserve soldiers, who are currently out of work as a result of COVID-19, with farmers and ranchers who need reliable workers. To date, a handful of service members have been hired on Arkansas farms. Livestock The COVID-19 pandemic has impacted all sectors of production agriculture and the entire food supply chain. However, the livestock industry – particularly the cattle industry – experienced an unwelcomed rollercoaster ride and complete collapse in the market. While the cattle futures were down approximately 30%, the Choice Boxed Beef Cutout prices shot up to unprecedented levels, with packer profits exceeding $500 per 1,000 pounds. Disparity between packer margins and live cattle prices is front-of-mind for many producers and the two simply do not correlate in the traditional sense. This event has injected a tremendous amount of uncertainty into the cattle industry. This has been met with even more challenges for livestock producers as large meat packing facilities

have been forced to temporarily or indefinitely close to address COVID-19 related labor shortages and employee health concerns. At the peak of plant closures in April, it was estimated beef processing had been reduced by as much as 10% and pork processing had been reduced by as much as 20%.1 In addition to decreased packing capacity, there has been a drastic drop in slaughter numbers for cattle and hogs. For the week of May 5, total weekly cattle slaughter was down by 38% since the March high. During the same timeframe, hog slaughter dropped 45% from its earlier high. 2 Limited processing capacity results in a lower output of protein products. This downstream impact was felt at the retail level, where consumers briefly experienced empty meat counters, subsequently leading to another round of panic buying. In response, President Donald Trump signed an Executive Order designating meat-packing facilities as critical infrastructure and instructed these companies to remain open and abide by CDC guidelines to protect workers. To be clear, reduced packing capacity was the result of a human health issue, not a diminished supply

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

continued on page 12>>

Arkansas Agriculture

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<<continued from page 11

2020

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;¢ SPRING 2020

in protein. In fact, prior to COVID-19, there was the expectation of record-setting meat and poultry production in the United States. There is no shortage of meat. As the economy begins to reopen and plants begin efforts to increase processing capabilities, while balancing the health of their workers through social distancing measures, producers will hopefully see a reduced strain on packing capacity. Restricted capacity and empty meat counters have kick-started the conversation about the need to expand the number of locally inspected processing facilities. Prior to the COVID-19 pandemic, Arkansas Farm Bureau began working on an initiative to reintroduce a state meat inspection program for Arkansas’ agriculture producers. This program will allow local producers and processors to sell product directly to local consumers, in-state restaurants and local retail outlets. As we have witnessed during COVID-19, the food supply is critically important and time sensitive. Moreover, the demand for locally sourced protein will continue to trend upward as more and more consumers and restaurants actively seek opportunities to purchase these products. This is an opportunity for livestock producers to capitalize on new marketing avenues to diversify operations. Arkansas no longer has an active state meat inspection program. There are only three USDAinspected facilities in the state, leaving producers to face challenges to deploy their locally produced protein business model. In some cases, producers are forced to book slaughter dates two or more years in advance due to the high demand. Under the CARES Act, Arkansas was provided $1.25 billion to address COVID-19-related financial shortfalls. Arkansas Farm Bureau, and industry allies, presented Arkansas Secretary of Agriculture Wes Ward a proposal to initiate a grant application program, which would use a small percentage of the CARES Act dollars to provide assistance to certain facilities. Specifically, the grant program would be available to custom slaughter facilities to make capital upgrades and investments to comply with state and federal inspection regulations. Arkansas Farm Bureau is working directly with state legislators and an industry coalition to advance state inspection across the finish line.

USDA’s Coronavirus Food Assistance Program (CFAP) The CARES Act, signed into law by President Trump on March 27, provided $9.5 billion to USDA to assist farmers and ranchers in response to COVID-19. USDA combined the existing Commodity Credit Corporation (CCC) funds of $6.5 billion with the $9.5 billion appropriated in the CARES Act, to create the $16 billion Coronavirus Food Assistance Program (CFAP).3 Payments will go directly to farmers who have suffered a 5%, or greater price loss, and who are facing significant marketing costs due to the coronavirus. Eligible commodities include cattle, hog, dairy, specialty crops and row crops. Payments will be limited to $250,000 per individual.4 Signup for CFAP began on May 26 and will end August 28. Eligible farmers will receive 80% of the total payment, up to the payment limit, upon approval of the application. The remaining 20% will be paid at a later date as funds remain available. 5

The livestock formula equals: [Number of Livestock Sold Jan. 15 to Apr. 15]×[CARES Act Part 1 Payment Rate] + [Inventory Apr. 16 and May 14]×[CCC Part 2 Payment Rate] The non-specialty crop formula equals: min[50%×2019 Production, Jan. 15 Inventory]×50%×[CARES Payment Rate + CCC Payment Rate] continued on page 14>>

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

<<continued from page 13

Producers interested in signing up to participate in this program should know that USDA FSA Service Centers will be open for business by phone appointment only. Furthermore, producers are strongly encouraged to visit www.farmers.gov/cfap to access more information regarding program requirements and other details. In Arkansas, agriculture is the lifeblood of our stateâ&#x20AC;&#x2122;s economy and there is no doubt, like all industries, production agriculture is under extreme pressure because of COVID-19. Many producers are hurting and will continue to feel the impact of COVID-19 well into the future. However, Arkansas ag producers remain committed to feed, clothe and shelter Arkansas families and families across the nation and around the world. These producers are the unsung heroes of the American dinner table and remain resilient during this unprecedented time in our history. * REFERENCES:

https://www.fb.org/market-intel/as-processing-facilitiesstruggle-with-labor-spread-between-the-wholesale-p. 2. Ibd. 3. https://www.fb.org/market-intel/reviewing-coronavirusfood-assistance-program-details. 4. https://www.fb.org/newsroom/afbf-welcomesannouncement-of-cfap-direct-payment-details. 5. Ibd. 1.

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;˘ SPRING 2020

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Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

ADVERTORIAL

Reaping the benefits of Habitat Management

s spring comes to an end and the days are getting longer, the warmer weather is welcomed by the call of Mr. Bob White in many areas once again. He brings back memories of the old days and gives hope for the coming days, as well. Many landowners long to hear his call on their property and a fortunate, patient few are seeing the fruits of their labor after years of perseverance and improvements to get Mr. Bob White to come visit them once again… In 2017, quail management efforts were heightened throughout Arkansas with intensive management occurring on seven focal areas within the state. However, the Arkansas Game and Fish Commission (AGFC) realized that with only 17% of Arkansas’s land mass under publicownership, that leaves 28 million acres of habitat (home to the majority of Arkansas’ wildlife) under the management of private individuals. With that extensive amount of area under private management, the influence landowners have on the existence and condition of populations of species such as quail is tremendous. With an existing team of agency private lands biologist, AGFC decided to enter a partnership with Quail Forever (QF) and the Natural Resources Conservation Service (NRCS) to bring additional biologists in state to help address private lands management for those landowners who wish to hear the call of bobwhite once again. AGFC recognizes the magnitude of affect landowners have on our state’s wildlife and now has 11 agency private lands biologists and 8 Quail Forever farm bill biologists available to provide technical assistance for landowners wanting to better manage their property for quail. Providing guidance to landowners on private lands, especially surrounding AGFC quail focal areas and other intensively managed areas, is of utmost importance for creating suitable landscape-scale habitat conditions for quail and other species associated with quail habitat. Beginning in 2017 after the initiation of the quail habitat restoration efforts, both QF and AGFC biologists in Southeast AR began working with two landowners who were very interested in managing their properties 16

for quail and turkey. Both of these properties were similar in that they were dominated by stands of pine timber. The biologists worked very closely with the landowners’ foresters to develop a management plan that was not only conducive to forest management but met the objectives for successful quail management on their properties, as well. In 2018, the timber on both properties was thinned according to their management plans and was followed up with prescribed burns on those thinned tracts. Fast forward to this May, the time of year that we begin to hear the unmistakable call of Mr. Bob White, and both landowners reported they have heard and/ or seen the first Northern Bobwhite on their property in over 30 years. These two properties are not the only locations where habitat restoration has shown an increase in quail. On Little Bayou Wildlife Management Area, one of the seven quail focal areas in the state, there were no reported bobwhite heard or seen on the area three years ago and now there are quail regularly calling on the area due to the implementation of thinning and prescribed burning that have created the right habitat conditions for quail to thrive and reproduce successfully. Bobwhite management can occur on many types of habitats such as pastures, forests and ag lands. In most cases all that is needed is time and a little work to improve your land’s current vegetation to meet the annual habitat needs of the bobwhite. By providing a foundation (i.e. habitat) for quail to sustain themselves, there is hope for being greeted by that familiar call once again! Another positive side effect of creating bobwhitefriendly habitat is that it fulfills the needs of countless other species of wildlife such as turkey, deer, monarch butterflies and numerous pollinators. In fact, both landowners mentioned in this article have reported seeing increased numbers of turkey that seem to stay on the property year round now. This corresponds with increased sightings of butterflies, wildflowers, and of course … Mr. Bob White. If you would like to discusse management on your property please contact one of the biologist in you area located on the maps. Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

Arkansas Forever Arkansas Quail Quail Forever Farm FarmBill Bill Biologists Biologists

Quail Forever Bill Biologists

Counties

ies

Find A Private Lands Biologist

Ryan Diener, Arkansas CoordinatorArkansas RyanState Diener, RDiener@quailforever.org m. (636) 399-8733 | p. (501) 301-3129

Fowler, Monarch and Pollinator Coordinator StateLeslie Coordinator LFowler@quailforever.org RDiener@quailforever.org m. (208) 431-5233 | p. (501) 301-3169 m. (636) 399-8733 | p. (501)Dillon 301-3129 King

Wesley Tucker Pulaski, Faulkner, White, Conway, Van Buren Counties WTucker@quailforever.org Wesley Tucker m. (205) 412-9205 | p. (501) 758-2544 ext. 3

Izard, Stone, Baxter Counties JKing@quailforever.org m. (817) 564-2420 | p. (870) 368-4413 ext. 3

Pulaski, Faulkner, White, Conway, Van Buren Counties Kelly Bufkin Robert Scott WTucker@quailforever.org Garland, Hot Spring, Clark, Nevada Counties Yell, Logan, Scott, Sebastian, Franklin Counties RScott@quailforever.org m. (205) 412-9205 | p. (501)KBufkin@quailforever.org 758-2544 ext. 3 m. (601) 218-8940 | p. (501) 624-2574 ext. 3 m. (870) 751-7045 | p. (479) 495-2441 ext. 3 Austin Klais Jessica Cox Robert Scott Drew, Ashley, Bradley Counties Boone, Newton, Carrol, Marion, Searcy Counties Yell, Logan, Scott, Sebastian,AKlais@quailforever.org Franklin Counties JCox@quailforever.org m. (501) 425-1985 | p. (870) 367-8400 ext. 3 m. (479) 206-3836 | p. (870) 741-8600 ext. 3 RScott@quailforever.org

Alex Hilburn m. (870) 751-7045 Arkansas, Prairie, Monroe, Counties AHilburn@quailforever.org m. (501) 733-9416 | p. (870)Cox 255-3573 ext. 3 Jessica

| p. (479)Ciera 495-2441 ext. 3 Rhodes

Randolph, Sharp, Fulton Counties CRhodes@quailforever.org m. (731) 439-0027 | p. (870) 892-3623 ext. 3

Boone, Newton, Carrol, Marion, Searcy Counties JCox@quailforever.org m. (479) 206-3836 | p. (870) 741-8600 ext. 3

Arkansas Pheasants Forever and Quail Forever Farm Bill Wildlife Biologist positions are funded in partnership cooperation with the Arkansas Game & Fish Commission, Natural Resources Conservation Service, and Quail Forever Chapters in Arkansas

Alex Hilburn Arkansas, Prairie, Monroe, Counties AHilburn@quailforever.org m. (501) 733-9416 | p. (870) 255-3573 ext. 3

Leslie Fowler, Monarch and Pollinator Coordinator LFowler@quailforever.org m. (208) 431-5233 | p. (501) 301-3169 Dillon King Izard, Stone, Baxter Counties JKing@quailforever.org m. (817) 564-2420 | p. (870) 368-4413 ext. 3 Kelly Bufkin Garland, Hot Spring, Clark, Nevada Counties KBufkin@quailforever.org m. (601) 218-8940 | p. (501) 624-2574 ext. 3 Austin Klais Drew, Ashley, Bradley Counties AKlais@quailforever.org m. (501) 425-1985 | p. (870) 367-8400 ext. 3 Central Ciera Rhodes VACANT - 800-364-4263/Ted.Zawislak@agfc.ar.gov Randolph, Sharp, Fulton Counties East Central CRhodes@quailforever.org m.Daniel (731) Greenfield 439-0027 |- p. (870) 892-3623 ext. 3 870-569-8124/Daniel.Greenfield@agfc.ar.gov

Leslie Fowler, Monarch and Pollinator Coordinator

Arkansas Pheasants Forever and Quail Forever Farm Bill Wildlife Biologist positions are North Central funLFowler@quailforever.org ded in partnership cooperation with the Arkansas Game & Fish Commission, Natural Ben Field - 501-442-6197/Ben.Field@agfc.ar.gov m. (208) Resourc431-5233 es Conserva| tiop. n S(501) ervice, a301-3169 nd Quail Forever Chapters in Arkansas

Dillon King Izard, Stone, Baxter Counties JKing@quailforever.org m. (817) 564-2420 | p. (870) 368-4413 ext. 3 Kelly Bufkin Garland, Hot Spring, Clark, Nevada Counties KBufkin@quailforever.org m. (601) 218-8940 | p. (501) 624-2574 ext. 3 Austin Klais Drew, Ashley, Bradley Counties AKlais@quailforever.org m. (501) 425-1985 | p. (870) 367-8400 ext. 3 Ciera Rhodes Randolph, Sharp, Fulton Counties CRhodes@quailforever.org m. (731) 439-0027 | p. (870) 892-3623 ext. 3

life Biologist positions are Fish CommisArkansas sion, Natural apters in Arkansas

Agriculture

ARKANSAS FARM BUREAU â&#x20AC;˘ SPRING 2020

West Central Clint Johnson - 501-270-1926/Clint.Johnson@agfc.ar.gov Northeast Bo Reid - 870-291-1281/James.Reid@agfc.ar.gov Northwest Hugh Lumpkin - 479-353-7674/Hugh.Lumpkin@agfc.ar.gov East David Graves - 870-319-0668/David.Graves@agfc.ar.gov Southeast Bubba Groves - 870-224-3334/Harvey.Groves@agfc.ar.gov West Michelle Furr - 479-222-5894/Michelle.Fur@agfc.ar.gov Southwest Ricky Chastain - 870-331-1297/Ricky.Chastain@agfc.ar.gov

softwood

TIMBER MARKET WOES from COVID-19 pandemic

By Matthew Pelkki, Professor and Clippert Endowed Chair of Forestry College of Forestry, Agriculture, and Natural Resources University of Arkansas at Monticello

“

Arkansas is the 9th-leading producer of timber in the United States, harvesting more than 24 million tons per year of timber worth an estimated $445 million to landowners.

“

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

The stateâ&#x20AC;&#x2122;s economy is the most timber-dependent economy in the U.S. South and ranks third nationally in timber dependency. Despite the massive timber industry in the state, we have a glut of timber. Every year we have a net growth of more than 37 million tons of wood, meaning that annually we are adding 13 million tons per year to our forests. This has been happening for more than 40 years, and our forests have added more than 400 million tons of commercial timber biomass to our stateâ&#x20AC;&#x2122;s forests on roughly the same land area. Timber prices are depressed and in real terms are less than half the prices 15 years ago, making landowners even less likely to manage and harvest timber. This wall of wood, combined with climate change-driven risks of devastating forest fires and insect and disease outbreaks, could create Western-U.S. type forest health catastrophes in Arkansas. continued on page 20>>

Arkansas Agriculture

ARKANSAS FARM BUREAU â&#x20AC;˘ SPRING 2020

<<continued from page 19

“Despite the massive timber industry in the state, we have a glut of timber,” says Pelkki. “Every year we have a net growth of more than 37 million tons of wood, meaning that annually we are adding 13 million tons per year to our forests.” This huge supply of excess timber was not unnoticed by consumers and the lumber industry as housing starts at the beginning of 2020 have risen to their highest level since the recession of 2009. The largest single user of Arkansas timber is the residential housing market, which consumes 60% of all softwood (pine) lumber. Housing starts in early 2020 were at its highest pace since the recession of 2009-2012 at more than 1.6 million homes in the nation. The steady increase in housing starts fed a growing Arkansas sawmill industry that saw nearly $500 million of investments between 2014 and 2019. Arkansas was also a leader in developing new construction markets for buildings built of mass timber, as demonstrated by the cross-laminated timber framed Adohi residence hall at the University of Arkansas’s Fayetteville campus. This expansion in the use of Arkansas pine saw timber was not a complete solution to our timber glut, but it was an important part of keeping Arkansas’s forests healthy. With the COVID-19 pandemic, housing starts have fallen 22%, which is the fastest one-month fall since March of 1984. The Association of General Contractors (AGC) has reported that 40% of the construction workforce in the United States has been laid off due to project delays and cancellations. No construction means orders for lumber fall, mills saw fewer logs, and less standing timber is bought and harvested.

Professor Matthew Pelkki in his office. The question we must ask is, will the economic recovery be rapid or slow for the forest products industry? The outlook is not encouraging. Let’s look at the general economy, then the construction industry, and then home buying and new home construction in the United States to see what they might tell us about construction and the use of wood over the next two years. The Congressional Budget Office (CBO) predicts that GDP growth will be negative overall for 2020, and even by the end of 2021, GDP will have recovered to pre-Corona virus levels. This is assuming a V-shaped or rapid general economic recovery with no major reoccurrences of the novel coronavirus. Unemployment will peak this summer at 16% and will still be 10% at the end of 2021. The CBO does state that unemployment should recover to 4-5% by the end of 2021, but with a catch. Job losses and health uncertainties associated with the pandemic are discouraging workers from even

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

looking for work once unemployed. The CBO projects that the US labor market will lose 6 million workers under a “social-distancing” workplace that has major uncertainties related to immunizations and treatments for COVID-19. Despite the dire economic outlook, the general public nationally is still more concerned about public health than “opening the economy.” Before the outbreak, the AGC reported that 65% of all construction firms were concerned about their ability to hire skilled labor. And working conditions under COVID-19 required by the Occupational Safety and Health Administration (OSHA) will slow work greatly. OSHA will require social distancing, disinfection of shared tools, and PPE that is desperately needed by the healthcare industry. Increasing our workforce using immigrant workers has added risk since migrant workers are at higher risk in the pandemic. This is caused by the more crowded living conditions and generally lower access to basic healthcare by this segment of the workforce. According to the Association of General Contractors, confidence index amongst general contractors building residences fell from 72 to 30 in April. A score of greater than 50 represents market growth. Less confidence, fewer workers, and slower working conditions will reduce the amount of lumber used in 2020 and 2021 even if demand for new homes and buildings returns to normal. This brings us to the retail housing market. As mentioned before, in March the number of new housing starts dropped 22% report. The US Department of Labor reported that housing completions were down 6%, reflecting the situation mentioned above in the construction industry. The

Arkansas Agriculture

ARKANSAS FARM BUREAU • SPRING 2020

Mortgage Bankers Association is reporting a 15% drop in home finance applications. Fannie Mae, a leading source of mortgage financing reports homebuyer sentiment is at its lowest since 2016, citing job insecurity as the major reason. Where does this leave Arkansas’s forests and forest landowners? If the general economic recovery is V-shaped and reopening the economy is successful, and a relatively “normal” economy persists afterward, stronger markets for pine timber for landowners has been pushed back at least two more years. The derived nature of timber demand is that the pull for timber comes through a long supply chain of builders, wholesalers, sawmills, and loggers, and timber buyers. Converting a standing tree into lumber and then putting that lumber into a building is often a 12 to 36 month-long process. If the general economic recovery is V-shaped, expect the timber market recovery to be U- or even L-shaped (a longer, slower recovery). Impacts on timber markets will be slow to happen initially in any economic crisis and recovery will lag that of the general economy. Meanwhile, trees continue to grow and add value, which is a bit of a positive aspect. But even that silver lining has its limits. Every year we allow existing crops of timber to grow is another year we are not planting faster-growing, more diseaseresistant trees for the future. We are delaying future timber harvests and reducing the long-term value of timberland when we delay harvesting. Finally, as the existing timber grows, so does the specter of nature’s challenges. Severe climate, diseases, fire, and insects are a growing threat to consume our forests. *

Logging Production in Arkansas & the Impact of COVID-19 The latest data from...

Arkansasâ&#x20AC;&#x2122;s economy is more dependent on forest than nearly every other state in the nation.

60%

Nearly of our state is forested. Forestry accounts for nearly 5% of the stateâ&#x20AC;&#x2122;s economy, a percentage that is higher than any other state in the South and third highest in the nation.

In Arkansas, in March & April of 2020, timber production fell off

480,000 tons

according to statistics reported by the Arkansas Agriculture Departmentâ&#x20AC;&#x2122;s Forestry Division. This represents a decline of

15%from the

March and April 2019 timber production totals.

15% reduction in timber production on an annual level, as many as 650 loggers

With a

could be out of work, and

$58 million

in logs would not be delivered to Arkansas sawmills and paper mills. The total effect on rural areas of the state would be more than

1,100 jobs and

$69 million

gone from the stateâ&#x20AC;&#x2122;s economy.

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LEGAL NOTICE NOTICE OF PROPOSED CLASS ACTION SETTLEMENT Hornbeck, et al. v. Orscheln Farm and Home, LLC, et al., Case Number 18-00941-cv-W-BP (W.D. Mo.). READ THIS NOTICE CAREFULLY. YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DO NOT ACT. A settlement has been reached in a class action lawsuit that alleges the following “303 Tractor Hydraulic Fluid Products”—CITGO-manufactured MileMaster 303 Tractor Hydraulic Fluid; CITGOmanufactured H-K 303 Tractor Transmission Hydraulic Fluid; Orscheln Premium 303 Tractor Hydraulic & Transmission Fluid; and/or CITGO-manufactured SuperTech 303 Tractor Hydraulic Oil— did not meet the equipment manufacturer specifications stated on the label. The Defendants deny they did anything wrong and state further that the labels were truthful and adequate. The Court has not decided who is right. Instead, the parties agreed to a proposed settlement to avoid the expense and risks of continuing the lawsuit. You are Settlement Class Member if you have purchased, not for resale, one of the following products sold in the United States during the stated Class Period:

Product MileMaster 303 MileMaster 303 MileMaster 303 H-K 303 H-K 303 Orscheln 303 SuperTech 303

Size 3/2 gal. 5 gal. 55 gal. 3/2 gal. 5 gal. 5 gal. 5 gal.

Start Class Period Jan. 23, 2017 May 25, 2013 May 25, 2013 May 25, 2013 May 25, 2013 Sept. 3, 2014 Feb. 17, 2016

End Class Period Present Present Present April 30, 2016 March 21, 2019 Aug. 16, 2017 Feb. 10, 2018

The settlement establishes a $18,825,000.00 “Class Settlement Fund” that will be paid to Settlement Class Members as: (1) cash awards of up to 100% of the purchase price paid for the 303 Tractor Hydraulic Fluid Products and (2) reimbursement for the costs of any repairs, parts, and specific equipment damage that a Settlement Class Member claims resulted from, in whole or in part, the use of the 303 Tractor Hydraulic Fluid Products during the Class Period. You may need to submit a Claim Form to receive your award, which can be obtained at www.303settlement.com or by calling 866742-4955. The deadline to submit a Claim Form is August 31, 2020. Class Counsel will seek an incentive payment of $5,000.00 for each of the Class Representatives. Class Counsel will ask that the Court award up to $5,900,000.00 in attorneys’ fees and expenses. This amount will not be paid from the Class Settlement Fund. If you do not want to be legally bound by the Settlement, you must exclude yourself from it by August 31, 2020. If you do not exclude yourself, you will not be able to sue Defendants for any claim relating to the lawsuit. If you remain a Settlement Class Member, you may object to the settlement by August 31, 2020. The Court will hold a hearing on October 13, 2020 to consider whether to approve the Settlement and a request for attorneys’ fees and expenses. This date may be moved, canceled, or otherwise modified; see www.303settlement.com for more information. This notice only summarizes the proposed settlement. For additional information, including the precise terms and conditions of the Settlement, please see www.303settlement.com or call 866-742-4955.

LEMENT et al., ).

TS ARE AFFECTED .

ydraulic Fluid Products”—CITGOctor Transmission Hydraulic Fluid; d SuperTech 303 Tractor Hydraulic dants deny they did anything wrong right. Instead, the parties agreed to

g products sold in the United States

End Class Period Present Present Present April 30, 2016 March 21, 2019 Aug. 16, 2017 Feb. 10, 2018

lement Class Members as: (1) cash and (2) reimbursement for the costs esulted from,26 in whole or in part, the ubmit a Claim Form to receive your deadline to submit a Claim Form is

A Federal Court authorized this Notice. This is not a solicitation from a lawyer.

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6.5 pt MFA Todays Farmer 4.6875 x 4.6875 LEGAL NOTICE NOTICE OF PROPOSED CLASS ACTION SETTLEMENT Hornbeck, et al. v. Orscheln Farm and Home, LLC, et al., Case Number 18-00941-cv-W-BP (W.D. Mo.). READ THIS NOTICE CAREFULLY. YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DO NOT ACT. A settlement has been reached in a class action lawsuit that alleges the following “303 Tractor Hydraulic Fluid Products”—CITGO-manufactured MileMaster 303 Tractor Hydraulic Fluid; CITGO-manufactured H-K 303 Tractor Transmission Hydraulic Fluid; Orscheln Premium 303 Tractor Hydraulic & Transmission Fluid; and/or CITGO-manufactured SuperTech 303 Tractor Hydraulic Oil—did not meet the equipment manufacturer specifications stated on the label. The Defendants deny they did anything wrong and state further that the labels were truthful and adequate. The Court has not decided who is right. Instead, the parties agreed to a proposed settlement to avoid the expense and risks of continuing the lawsuit. You are Settlement Class Member if you have purchased, not for resale, one of the following products sold in the United States during the stated Class Period: Product MileMaster 303 MileMaster 303 MileMaster 303 H-K 303 H-K 303 Orscheln 303 SuperTech 303

Size 3/2 gal. 5 gal. 55 gal. 3/2 gal. 5 gal. 5 gal. 5 gal.

Start Class Period Jan. 23, 2017 May 25, 2013 May 25, 2013 May 25, 2013 May 25, 2013 Sept. 3, 2014 Feb. 17, 2016

A set MileM Hydr speci Cour You a Class

End Class Period Present Present Present April 30, 2016 March 21, 2019 Aug. 16, 2017 Feb. 10, 2018

The s 100% equip durin callin each

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Ag LawUPDATE Harrison M. Pittman is director of the National Agricultural Law Center, which is part of the University of Arkansas System Division of Agriculture. The Center serves as the nation’s leading source of agricultural and food law research and information and deals with legal issues around the country that impact agriculture at the state and federal levels.

by Harrison Pittman

he COVID-19 outbreak and resulting actions to contain the virus have had a major impact on agriculture across the country this spring. In this edition, we look ahead to potential major changes that could occur as a result of the pandemic. Federal Budget Deficit Prior to COVID-19, the size of the federal budget deficit was a major consideration for agriculture, particularly as we moved toward debate over reauthorizing the 2018 Farm Bill that is set to expire in 2023. As a result of COVID-19, revenues to the federal Treasury have decreased, while expenditures have increased via massive federal economic stimulus packages. Thus, it is reasonable to presume that the next Farm Bill will be debated against the backdrop of a much tighter budget picture. Expect to see proposals such as tighter eligibility requirements and other purported reforms to the farm safety net programs as well as reduced funding for and consolidation of conservation programs. How Congress and the Administration – both of which will be defined by the outcome of the 2020 elections – will tackle Farm Bill funding in a very tight budget atmosphere will significantly impact the agricultural industry in Arkansas and throughout the nation. Liability Protection Laws Another area that could see dramatic change over the coming months is the enactment of state and/or federal laws intended to provide liability protection to 32

meatpackers and other business entities. As states and local communities seek to gradually reopen, concerns ranging from employee safety and health to potential lawsuits are raised. Currently, there are discussions at the federal level to provide some employers and businesses, including meatpackers, some level of liability protection from such lawsuits. Additionally, several states such as Oklahoma and Missouri are considering similar legislation. Livestock industry COVID-19 has obviously impacted all of agriculture, but the livestock industry is one that could see long-term structural changes as the country navigates COVID-19. Over the past two months, efforts to expand state inspection programs for meat and poultry have received increased attention. At the federal level, the “Processing Revival and Intrastate Meat Exemption Act” (PRIME Act) seeks to broaden the exemption for custom slaughtering of animals from federal inspection under the Federal Meat Inspection Act. Another proposal, the “New Markets for State-Inspected Meat Arkansas Agriculture

and Poultry Act” would allow meat and poultry products inspected under a state inspection program to be sold in interstate commerce, rather than only in intrastate commerce. Another federal proposal would amend existing law to require certain beef packers to purchase at least fifty percent of their daily volume of beef slaughter on the open/spot market. At the same time, there is renewed and strong state-level interest across the country in expanding existing state meat inspection programs, and in developing new state meat inspection programs in those states that do not already have such a program. On top of all of this, several states’ Attorney Generals requested the U.S. Department of Justice investigate whether some meatpackers colluded in price fixing activities. In early May, President Donald Trump directed the Department of Justice to initiate that investigation. To learn more about these and other issues impacting agriculture in Arkansas and the nation, be sure to visit the Center’s website at www.nationalaglawcenter.org. * |

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Farm Bureau® Member Rewards Mastercard®

Carry the card that rewards Farm Bureau® membership! Use our card every day and earn triple, double, or single points on select purchases1. Plus, we’ll pay your Farm Bureau membership renewal dues!2 Contact your local agent to apply! farmbureau.bank 800.492.3276

1 Eligible purchases mean any signature or pin-based, online, phone or mail-order purchase made with the Farm Bureau Member Rewards MasterCard. Offer excludes Cash Advances, Balance Transfers, credits and returns. Points expire after four full years. Program may change or be cancelled at anytime. Triple reward points on eligible Gas, Grocery & Dining purchases based on merchant code, up to $1,500 quarterly. Credit Card plastic design may vary based on member’s qualification. 2 Farm Bureau Bank may pay your Arkansas membership dues, visit farmbureau.bank for details. Please see Terms and Conditions on farmbureau.bank for additional details about the Farm Bureau Member Rewards MasterCard. Banking services provided by Farm Bureau Bank, FSB. Farm Bureau, FB, and the FB National Logo are registered service marks owned by, and used by Farm Bureau Bank FSB under license from, the American Farm Bureau Federation.FBMRMC_06.2020