OPINION

OPINION | REX NELSON: Agriculture's economic might

Farms are big business in Arkansas

The late C. Fred Williams of the University of Arkansas at Little Rock was one of the nation's foremost agricultural historians. In 2009, he was secretary-treasurer of a professional organization known as the Agricultural History Society. Williams hosted the society's annual meeting in Little Rock.

Knowing of my interest in Arkansas agricultural history, Williams invited me on a bus tour from Little Rock to Stuttgart on Saturday, June 20, 2009. We stopped at the the state's Plantation Agriculture Museum at Scott, the Museum of the Arkansas Grand Prairie at Stuttgart and Riceland Foods' headquarters in Stuttgart.

Those stops allowed historians from across the country to understand how cotton had once dominated this state's economy, how soybean production had grown in importance after World War II and how Arkansas came to be the nation's leading rice producer.

As Williams and I narrated during the drive down U.S. 165, the out-of-state historians' questions showed that they were surprised that Arkansas--a place they rarely had thought about before the annual meeting--had become an agricultural powerhouse. What I wanted to tell them is that, in a state that's increasingly urbanized, even its own citizens don't realize the power of agriculture.

Take row crops and then add poultry and cattle production. Throw in forestry. Despite being home to the nation's largest retailer, agriculture remains the largest sector of the Arkansas economy.

According to the University of Arkansas System's Division of Agriculture, 42 percent of Arkansas land is comprised of farms, with 57 percent comprised of forests. There are 42,300 farms on 14 million acres with an average farm size of 331 acres.

In 2019, the most recent year for which complete figures are available, the average farm's real estate value was $3,320 per acre with an average cropland value of $2,850 per acre. Irrigated cropland averaged $3,340 per acre. The average pasture was worth $2,610 per acre.

The state's top commodities in terms of cash farm receipts were broilers at $4.09 billion, soybeans at $1.36 billion, rice at $1.02 billion, chicken eggs at $528 million, cattle and calves at $480 million, corn at $441 million, timber at $439 million, cotton lint at $361 million and turkeys at $304 million.

"Arkansas consistently ranks in the top one-third in the nation for agricultural cash farm receipts," the UA reports. "In 2018, Arkansas ranked 15th in the nation with more than $9 billion for total agricultural cash receipts, No. 10 in animals and animal products at $5.6 billion and No. 18 in crops at $3.5 billion."

For 2019, Arkansas was among the top 25 states in the production of numerous agricultural commodities. It was No. 1 in rice, No. 2 in broilers, No. 3 in food-size catfish, No. 4 in upland cotton, No. 4 in cottonseed, No. 5 in turkeys, No. 7 in peanuts, No. 10 in beef cows, No. 11 in chicken eggs, No. 11 in soybeans, No. 18 in corn for grain, No. 22 in oats, No. 22 in honey and No. 24 in hogs and pigs.

The U.S. Department of Agriculture no longer reports values for sweet potatoes, grain sorghum, blueberries, grapes, peaches, pecans, tomatoes and watermelons, all of which Arkansas produces. Before state rankings became impossible to calculate, the state generally ranked in the top 10 for pecan production and about fifth for sweet potato production.

In the forestry sector, the almost 19 million acres of Arkansas forests have more than 12 billion trees. Arkansas is ranked sixth nationally in forestry products, valued at more than $6.4 billion. About 44 million tons of forestry-related products and timber are produced each year.

In 2019, Arkansas agriculture contributed $21 billion in added value to the state's economy with more than 268,000 jobs in the state supported by agriculture.

To put that in perspective, the agricultural sector's share of the Arkansas economy is 4.4 times greater than in Texas, 2.7 times greater than in Louisiana, 2.5 times greater than in Oklahoma, 1.9 times greater than in Missouri, 1.8 times greater than in Tennessee. 1.3 times greater than in Mississippi, 1.9 times greater than for the Southeast region and 2.7 times greater than for the country as a whole.

"Agriculture has played a major role in Arkansas' culture from territorial times, when farmers made up more than 90 percent of the population, through the present, when less than 45 percent of the state's residents are still classified as rural," Williams wrote in a history of Arkansas agriculture. "Beginning as a region populated by small, self-sufficient landowners, the state evolved through a plantation culture before the Civil War to an era when tenant farming and sharecroppng dominated.

"The tenant farming and sharecroppng period lasted from the Civil War to World War II before yielding to technology and commercial enterprise. For more than 150 years, agricultural practices had hardly changed. Hand tools and draft animals limited an average farmer to cultivating about four acres a day and made it difficult to accumulate wealth. But World War II transformed agriculture. In 25 years, machines turned what had been a lifestyle into a capitalistic endeavor."

Arkansas lost a higher percentage of its population than any other state from 1940-60 as poor farmers headed to the upper Midwest for better-paying factory jobs. The rapid mechanization of agriculture had made their labor unnecessary. Meanwhile, demand increased and prices rose for farm products.

"In 1940, tenants or sharecroppers cultivated more than 60 percent of the land, and more than 90 percent of farmers used horses or mules as draft animals," Williams wrote. "By 1964, the statistical importance of tenant-sharecroppers, and the number of horses and mules, had been reduced to the point that federal officials no longer collected data on them. The significance of the changes lay in the speed with which they occurred.

"Cotton had been the state's bellwether crop, but by the end of the war, rice and soybeans appeared and quickly won a loyal following. After a few years, most farmers were convinced that the relative ease of producing soybeans made it the crop for the future. Rice, too, because of its greater economic return, found increasing favor in the Delta. Farmers were willing to make long-term commitments to these crops even though it meant acquiring new equipment."

Equipment dealerships became important businesses in rural Arkansas counties.

"The equipment came primarily in the form of tractors and improved planting and harvesting machines," Williams wrote. "Tractors, although making an appearance in the Delta soon after World War I, were at first impractical due to poor design, high costs and the dominance of small-scale sharecropping and tenant farming. However, World War II brought dramatic changes in the area of farm equipment.

"Not only did technologies developed during the war greatly improve the machines and reduce their costs, the mass migration of rural Arkansans to defense plants in regional towns reduced the number of farms and increased the size of farming units. Using money saved from wartime prosperity, farmers were poised in the postwar period to buy machinery and land to expand their operations. When small farmers didn't return to the land after the war ended, as they had following World War I, landowners were forced to rely on machinery even more."

Agriculture became big business. Cotton decreased in importance. Sharecropping and tenant farming disappeared.

"Rice and soybeans incorporated into this new order since the same harvester could be used for both crops with only limited modifications," Williams wrote. "A new age in Arkansas agriculture had begun and was reflected in changing land and cropping practices."

Arkansas' row-crop producers began this year's planting season with strong commodity prices. In March, the USDA's National Agricultural Statistics Service reported the predicted acreage totals for crops nationwide following a survey of about 78,900 farm operations. Within an hour of the report's publication, soybean prices had risen 70 cents a bushel and corn prices were up 25 cents, the market limits for daily price increases for those commodities. Cotton prices increased by more than $1 per hundredweight.

It was estimated that 3 million acres of soybeans will be planted in Arkansas this year, a 6 percent increase from last year.

"From talking to soybean producers, I would expect the soybean acreage to be higher than the 3 million acres projected," said the UA's Jeremy Ross, an extension soybean agronomist.

The corn estimate for Arkansas was up 13 percent to 700,000 acres as producers showed optimism following rising market prices at the end of 2020.

Despite rising prices, cotton acreage was expected to drop 7 percent from last year to 490,000 acres. Input costs are lower for corn and soybeans. Cotton yields approached record levels last year, averaging 10 pounds per acre above 2019 yields.

"You really have to borrow a lot of money to plant cotton or rice," said Bill Robertson, a UA extension cotton agronomist. "There's just a lot of risk involved. It's much cheaper to plant corn and cheaper still to plant soybeans."

Rice acreage was projected to drop 14 percent to 1.25 million acres as producers take advantage of those higher soybean and corn prices. Still, Arkansas will produce almost half of the nation's rice.

Peanut acreage was expected to increase 15 percent to 45,000 acres. Top peanut-producing counties in 2020 were Chicot, Clay, Craighead, Green, Lawrence, Lee, Mississippi, Phillips, Poinsett, Randolph and St. Francis. Yields were almost 5,500 pounds per acre, the highest in the country.

Peanut companies have begun looking for new places to grow crops as irrigation becomes expensive in Texas, Oklahoma and Georgia.

Overall, crop acreage in Arkansas should rise 1.4 percent from last year. China, the largest importer of agricultural products, has committed to buying more than $4 billion worth of U.S. products, helping drive the increase.

Though there have been massive economic and social changes in rural Arkansas through the decades, the state's economy still relies heavily on agriculture. This year will be no exception with early signs pointing to a profitable 2021.

"By the mid-1980s, the state's agricultural revolution was largely complete," Williams wrote. "Single-crop, hand-labor production had been replaced by diversification, mechanization, and chemical and biological practices. As historian Gilbert Fite noted, farmers became a new minority in many regions of the nation, and that was particularly true in east Arkansas. But after World War II, Arkansas farmers were also a new elite.

"Costs of machines, land and inputs had forced out all but the most skilled and daring farmers. Heavily capitalized, with access to thousands, sometimes millions, of dollars, these farmers were products of the agribusiness system. But even modernization didn't remove the risks. In relative terms, the new agriculturists were in no better economic position than their traditional forebears. Greater investments meant higher risks."

From 1985-95, more than 11,000 farmers left the Delta due to debt, low commodity prices and bankruptcy. In 1935, there had been more than 235,000 farms in Arkansas. Now there are just more than 40,000.

And, as always, much will depend on how the weather cooperates during the planting, growing and harvest seasons. That's one thing that has remained constant in Arkansas agriculture since territorial times.

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