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The Food Insecurity Challenge: A Snapshot of the Southern U.S.

The Food and Agriculture Organization (FAO) of the United Nations defines a person as food insecure if s/he “lacks regular access to enough safe and nutritious food for normal growth and development and an active and healthy life.” According to the U.S. Department of Agriculture’s (USDA) 2023 report on Household Food Security in the United States, 13.5% of households—approximately one in seven—experienced food insecurity (Rabbitt et al. 2023), underscoring the continued prevalence of this issue nationwide. Food insecurity exhibited an upward trend from 12.8% in 2022, reflecting a growing number of households with limited resources and chronic health conditions, among other factors.

The Southern region faced higher food insecurity rates (14%) compared to the national average of 12.2% between 2021 and 2023 (see Figure 1). Only five of the thirteen Southern states fell below the national average: Florida (12.0%), Tennessee (11.7%), Alabama (11.5%), North Carolina (10.9%), and Virginia (10%). Arkansas ranked as the most food-insecure state in both the Southern region and the nation, with a rate of 18.9%. The state’s food insecurity rate has steadily increased since 2020, reflecting significant challenges many Arkansan households face in accessing adequate food. According to Feeding America, more than 560,000 Arkansans experienced food insecurity in 2022, with approximately 24% of those affected being children. Other Southern states with food insecurity rates above the national average include Texas (16.9%), Mississippi (16.2%), Louisiana (16.2%), Oklahoma (15.4%), Kentucky (14.5%), South Carolina (14.4%), and Georgia (12.8%).

It is important to address a lack of sufficient access to food due to its negative impact on health, which leads to poor productivity and lower overall economic growth and development. This is especially important given the increasing risk of food insecurity from greater uncertainty in global developments, such as wars in various parts of the world. These conflicts have disrupted food supplies in the US and worldwide (Filho et al. 2023; Kemmerling et al. 2022). Furthermore, higher domestic food prices and reduction in overall economic activity make it more difficult for low-income households to achieve food security (Elmes 2016).

To address this issue, the federal Supplemental Nutrition Assistance Program (SNAP) provides temporary assistance to help households purchase food until they regain financial stability. Non-profit organizations, such as food banks and food pantries, also play an important role in local communities. Sustainable efforts to reduce food insecurity must be intensified. Prospects for improving long-term food security are tied to the same economic factors that influence household income and budgeting, especially those connected to labor productivity and wages (LeBlanc et al. 2005). Efforts of this nature generally require the collaboration of community stakeholders to ensure a resilient economy, so that the benefits reach all community members.

Figure 1. Prevalence of Household Food Insecurity by State, average 2021-2023

Source: Visualized by authors using USDA, Economic Research Service using data from U.S. Department of Commerce, Bureau of the Census, 2021, 2022, and 2023 Current Population Survey Food Security Supplements.

References

Elmes, M. B. 2018. Economic Inequality, Food Insecurity, and the Erosion of Equality of Capabilities in the United States. Business & Society 57(6): 1045-1074. https://doi.org/10.1177/0007650316676238

Filho L. W., M. Fedoruk, JH Paulino Pires Eustachio, J. Barbir, T. Lisovska, A. Lingos, and C. Baars. 2023. How the War in Ukraine Affects Food Security. Foods. 12(21): 3996.

Kemmerling, B., C. Schetter, and L. Wirkus. 2022. The logics of war and food (in)security. Global Food Security 33. https://doi.org/10.1016/j.gfs.2022.100634.

LeBlanc, M., B. Kuhn, and J. Blaylock. 2005. Poverty amidst plenty: food insecurity in the United States. Agricultural Economics 32(s1): 159-173.

Rabbitt, M. P., Reed-Jones, M., Hales, L. J., & Burke, M. P. (2024). Household food security in the United States in 2023 (Report No. ERR-337). U.S. Department of Agriculture, Economic Research Service.

Feeding America, Food Insecurity among the Overall Population in Arkansas, Retrieved September 27, 2024, from https://map.feedingamerica.org/county/2022/overall/arkansas

Thomas, Chrystol, and An-Ting Liao. “The Food Insecurity Challenge: A Snapshot of the Southern U.S.” Southern Ag Today 4(40.5). October 4, 2024. Permalink

October 4, 2024
Shifting Winds: The Changing Landscape of Cotton Production and Exports in the U.S. and Brazil (Part 2)

In Part 1, we examined the importance of international markets for cotton growers amid a significant decline in U.S. cotton processing capacity. Since 1995, U.S. cotton mill use has plummeted by 84%, reaching 1.85 M bales in the 2023 crop season—the lowest level in over a century. During this period, Brazil’s production surged, enabling it to surpass the U.S. in cotton exports. In this second part, we briefly analyze yield and production trends in both countries, exploring their potential impact on future exports.

After the World Trade Organization (WTO) Agreement on Textiles and Clothing (ATC) came into effect in 1995, U.S. cotton production averaged 17.1 million bales annually. For the 2024/25 crop season, the USDA estimates production at 14.5 million bales (Fig. 1), reflecting an improvement over the past two years. However, untimely rains have hindered optimal crop development in Texas, the largest cotton-producing state. In 2023, Brazil outpaced the U.S. in cotton production (Fig. 1), with USDA forecasting a harvest of 16.7 million bales for the 2024/25 crop season – nearly nine times the amount produced in 1995. This growth in Brazil is primarily due to land expansion and yield improvements.

Figure 1 – Cotton Production in the U.S. and Brazil: 1960 – 2024.

Notes: ATC: Agreement on Textiles and Clothing. 2024 are estimated values.
Source: FAS/USDA/PSD.

Brazil’s cotton acreage has expanded by 71% since 1995. Most Brazilian cotton is grown as a double crop, following soybean harvest. Cotton competes for land with corn, allowing farmers to benefit from fiber-food diversification. This year, low corn prices prompted growers to shift more acreage to cotton, resulting in a 16.8% increase in planted area.

Post-ATC, Brazil began outperforming the U.S. in cotton yield. Enhanced farming practices and the introduction of transgenic cotton seeds in the late 2000s significantly boosted productivity. Brazilian yield soared from 323.9 lbs./ac in 1995 to 1,705 lbs./ac in 2023 – a fivefold increase. In contrast, U.S. cotton yields have plateaued around 846.5 lbs./ac since 2004 (Fig. 2), a notable achievement considering the challenging weather conditions faced by U.S. producers.

Figure 2 – U.S. and Brazil Cotton Yields.

Notes: ATC: Agreement on Textiles and Clothing. 2024 are estimated values.
Source: FAS/USDA/PSD.

Brazil’s soil and climate favor cotton expansion, signaling a promising export future. However, the profitability of second-season corn often influences farmers’ decisions to plant cotton. Expanding cotton beyond traditional areas is limited by the need for specialized infrastructure, such as cotton gins and storage facilities. Moreover, cotton demands more sophisticated technology and a longer growing season than corn, adding climatic risk to production. Despite these challenges, Brazil has made notable progress. In 2023, the country achieved a milestone by exporting cotton to Egypt, showcasing the enhanced quality of its fiber. Additionally, a new export route through the port of Salvador, strategically closer to the key cotton region of western Bahia, was established to alleviate bottlenecks at Santos, Brazil’s main export hub.

Brazil is poised to contend for the top position in global cotton sales. Preliminary analysis indicates that cotton remains more profitable than corn in the country. Despite narrowing margins for Brazilian cotton producers, a modest increase in acreage is expected for the next cycle. Cotton prices on ICE Futures in New York have fallen by 20% since February, now trading around $0.70 per pound. Meanwhile, the dollar’s 12% appreciation against the Brazilian real has bolstered Brazil’s price competitiveness, mitigating the impact of falling cotton prices in the country. Although recent droughts in the U.S. have curtailed production, Brazil’s surging output has halted the effects on global prices. Monitoring Brazil’s cotton market provides valuable insights into global price trends and affects marketing strategies for Southern U.S. growers.

References.

FAS/USDA/PSD. PSD Data Sets. Retrieved from: https://apps.fas.usda.gov/psdonline/app/index.html#/app/home[Accessed September 18, 2024].

Cali, Yuri, and Rachel Judd. “Shifting Winds: The Changing Landscape of Cotton Production and Exports in the U.S. and Brazil (Part 2).” Southern Ag Today 4(40.4). October 3, 2024. Permalink

October 3, 2024
Brazil Expected to Continue Dominance of Global Soybean Exports

As soybean prices for U.S. producers deteriorate, they face fierce competition from greater Brazilian production in the export market. USDA-WASDE projects the 2024/25 average farm price to be down $3.40 from two years ago, at $10.80 per bushel. U.S. soybeans rely heavily on the export market; on average, 47% of U.S. soybeans were exported in the previous five years. For over a decade, Brazil has maintained its position as the world’s largest soybean exporter, and in recent years, it has further expanded its global market share (Figure 1). USDA-WASDE projections for the 2024/25 marketing year estimate Brazil will account for 58% of global soybean exports, with the United States trailing at 28%. The remaining 14% will come from other exporting nations. While Brazil’s share has dipped slightly from last year’s peak of 59%, it continues to dominate the global soybean export market.

The U.S. soybean market is facing challenges with Brazil strengthening its position as China’s primary supplier. China has been working to become less dependent on U.S. soybean purchases, and increased production has allowed Brazil to become the preferred trading partner. According to the Foreign Agricultural Service’s Beijing post, in the first nine months of the 23/24 marketing year, the U.S. accounted for 26 percent of China’s soybean imports, compared to 69 percent from Brazil. Reports also indicate that China is dealing with an oversupply of soybeans, as recent high purchases come during subdued feed demand. This fact has hampered sales to China as we enter the peak marketing season for U.S. soybeans. While U.S. sales to China have risen recently, they are still trailing behind last year’s sales and the five-year average. As of the week ending 9/19/24, the total soybean commitments to China totaled 6.8 million metric tons, compared to 7.4 million for the same time last year and the five-year average of 10.6 million.

                  The export outlook for U.S. soybeans is further complicated by the prospect of low river levels on the Mississippi River, a concern highlighted in last week’s article “Low River Levels on the Mississippi River: Not the Three-peat We Want” (southernagtoday.org). Recent rainfall from Hurricane Helene has improved the river situation, as the Mississippi River at Memphis is expected to rise above the low river threshold. Without a positive shift in the current export scenario, U.S. producers face lower prices as they harvest a record soybean crop. With Brazil now dominating the export market, the potential for price increases this year depends heavily on the progress of Brazil’s soybean planting season. Although Brazil has just entered its planting window, dry conditions in the central region could lead to delays. If drought conditions develop, it could create an opportunity for higher prices for U.S. producers. Current forecasts call for rain over the next couple of weeks, but rainfall remains below normal.

Figure 1. Share of Global Soybean Exports by Country, 2010-2025

Source:  https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery

References

United States Department of Agriculture, Foreign Agricultural Service. Oilseeds and Products Update: Beijing, China – People’s Republic of China. CH2024-0116, 2024, https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Beijing_China%20-%20People%27s%20Republic%20of_CH2024-0116.

Maples, William E. “Brazil Expected to Continue Dominance of Global Soybean Exports.” Southern Ag Today 4(40.3). October 2, 2024. Permalink

October 2, 2024
Seasonal Price Trends & Inventory

The summer and fall months are when a majority of producers are selling spring-born calves or yearlings from last fall. Due to the increase in supply of calves, prices typically decline during these months as demand from feedlot buyers is more easily met than in the spring. In Florida and nationwide, we started seeing this decline in prices a little earlier (April), which is partly due to the market responding to the outbreak of HPAI H5N1 in dairies, earlier trader’s recession fears, and more fed beef production than last year. However, prices still remained well above 2023 levels. Going into the summer months, as mentioned in a previous SAT article, prices followed the seasonal trend of declining in the summer and fall.

Figure 1 shows the average monthly price index for 450-500 lb steers in Florida from 2018-2022. This figure is simply a visual to show how we know the current dip in prices is normal for this time of year. The price index (blue line) shows the relationship between each month’s average price and the annual average price. When the price index is above 100%, that means prices in that month, on average, are higher than the annual average, such as in the spring. When the price index is below 100%, that means prices in that month, on average, are lower than the annual average, such as in the fall.

Now, Figure 1 only represents 2018-2022, not 2023 when prices were transitioning from a low point to a high point. Figure 2 shows how this transition period did not follow the typical seasonality trend (orange line). Prices continued rising into 2024, but then began falling as previously mentioned and much like we saw in 2015. However, the difference to notice between 2024 and 2015 is inventory levels and the rate of expansion (Figure 3). In 2015, expansion had already started when prices were at the levels we are seeing today. There was no incentive for prices to climb back up after the typical dip in the fall. In the current market, we have not started expanding and have already hit new record-high calf prices. This indicates that while we are experiencing the effects of seasonality this year, it is not expected that we are headed for a continuous low level of cattle prices for quite some time.

Figure 1. Average Monthly Price Index for Florida Steer Calves

Figure 2. Average Monthly Prices for Steer Calves

Figure 3. Beef Cow Inventory and Monthly Calf Prices

Baker, Hannah. “Seasonal Price Trends & Inventory.” Southern Ag Today 4(40.2). October 1, 2024. Permalink

October 1, 2024
Increase in PRF Adoption in the Southern Region

In recent years, drought has been a common occurrence in many Southern states, including Texas, Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Tennessee, and Kentucky. The U.S. Drought Monitor reported that approximately 65% of this area was experiencing some level of drought as of September 24, 2024 (Fig 1). Producers are increasingly adopting the USDA’s Pasture, Rangeland, and Forage Insurance (PRF), recognizing its crucial role in supporting ranchers during these challenging times.

Figure 1. U.S. Drought Monitor, Southern Region 9-24-24

The PRF program was established in 2007 to help livestock and forage producers mitigate the risks associated with forage loss due to lower precipitation. The program is available in 48 states and covers over 247 million acres. The severity of droughts and the effectiveness of PRF have led to an increasing adoption of this risk management tool each year. According to the latest data, the average indemnity payment since 2011 from the region was similar to total premiums paid. During the droughts of 2021, 2022, and 2023, the indemnities paid were 14%, 69%, and 17% higher than the total premium paid, totaling $2.372 billion in indemnities versus $1.776 billion in total premiums during those three years. (Fig 2)

In the Southern Region, the adoption of this program has more than doubled since its inception, with enrolled acres increasing from 20.8 million in the first year to approximately 49.8 million in 2024. With its vast area of open rangeland, Texas dominates PRF acreage enrollment, followed by Oklahoma and Florida. These three states have seen significant increases in the adoption of PRF insurance, with Texas enrolling 42.8 million acres in 2024 (a 191% increase from 2011), Oklahoma enrolling around 4 million acres (a 1,491% increase from 2011), and Florida insuring 2.4 million acres in 2024 (a 344% increase from 2011). The other Southern Region states have also seen substantial increases in insured acres, indicating the growing recognition of the program’s benefits (739% increase from 2011). (Fig 3). For more information on PRF, consult the USDA Fact Sheet. If you’re considering purchasing this insurance, you can find a list of approved agents and insurance companies on the USDA website.

Figure 2. PRF Premiums Paid by Farmers vs Indemnities Received in the Southern States (*2024 Partial Results)

Figure 3. PRF Enrolled Acres in the Southern Region

Abello, Pancho. “Increase in PRF Adoption in the Southern Region.” Southern Ag Today 4(40.1). September 30, 2024. Permalink

September 30, 2024