Hurricane Helene, which made landfall in September 2024, brought unprecedented destruction to Southwest Virginia and other parts of the Appalachians. Initial damage assessment figures prepared by Virginia Cooperative Extension (VCE) and the Virginia Department of Forestry (VDOF) stood at more than $159.3 million as of October 17, 2024.

VCE agricultural damage assessment efforts have historically focused on a direct loss approach.  At the request of Virginia’s Office of the Governor and the Office of the Secretary of Agriculture and Forestry, VCE leadership was asked to consult with other southern states to determine if future economic losses were part of their agricultural damage assessment methodologies.  A meeting with Cooperative Extension personnel from Georgia and North Carolina confirmed that future economic losses were indeed incorporated into their approaches.

VCE determined that it was more appropriate to incorporate future economic losses into damage assessment calculations to ensure equal consideration for Helene disaster relief programs. For assistance with this new approach, VCE leadership asked Bovay to evaluate damage estimates for future economic loss opportunities. Bovay identified additional opportunities for two key categories of damage: future income losses and ripple effects. This Kohl Insight explains the concepts briefly and provides examples of future income losses.

Future income loss

Future income loss is a projection or prediction of the real economic losses that will be sustained for multiple years.  Not all sales or income loss due to Hurricane Helene will have occurred during 2024 because some crops require multiple years to reach maturity (like Christmas trees) or require multiple years to reach maturity and generate a profit over many years (like apple trees and blueberries). For these categories, damages incurred during 2024 will affect profit or sales for years into the future. In updates to the original damage assessment completed between November 2024 and February 2025, Bovay worked to document all losses that would have been incurred in future years. He then discounted these losses according to standard practice in economics (using the Effective Federal Funds Rate, which was 4.83 percent in November 2024) to reflect the reality that a $100 loss today is more important than a $100 loss two years from now.

The most vivid examples of the importance of future income loss are Christmas trees and blueberries.

Commercial Christmas trees are grown for about eight years before being cut. Generally, entire fields or parcels are harvested all at once, so it would not be possible or practical to replant trees in parcels with only a small number of trees killed. Bovay assumed that farmers receive $15 per tree for trees that have reached maturity, but less for immature trees. He calculated the net present value of income lost for trees planted in each year from 2016 to 2024. The net present value of a Christmas tree rises over time because, as the tree grows older, it is closer to being mature and ready for harvest and sale, so it is more valuable. 

Blueberries require about eight years to reach full productive capacity, so any blueberry growers who had mature blueberry bushes killed by Helene and then replanted their bushes would suffer losses for up to eight years in the future, until newly planted bushes reached that full productive capacity. Bovay estimated the stream of net profits over eight years for mature bushes and for newly planted bushes, using the same discount rate of 4.83 percent, and then calculated the net present value of the difference in profits to obtain estimates of the net present value of bushes killed by Helene.

Growers of apples, blueberries, and Christmas trees that were killed by Helene were able to apply for compensation for their future income losses through the Virginia Department of Agriculture and Consumer Services under the Virginia Farm Recovery Block Grant Program through November 7, 2025.

Eligible loss categories also include on-farm building structures; roads, bridges, and culverts; above ground irrigation infrastructure; aquaculture infrastructure; market loss; plasticulture; and timber.

The most important category of future income loss is from land damage. Bovay asked VCE agents to estimate the acreage of farmland that was damaged and would need rehabilitation, and how long the rehabilitation would take; the cost of rehabilitation; the acreage of farmland that would need to be taken out of production permanently; and the profit per acre for this acreage. He thus obtained year-by-year estimates of the profit lost because of damaged farmland (not yet rehabilitated or permanently damaged) and applied the standard 4.83 percent discount rate to calculate the net present value of long-run damage, i.e., the net present value of future income losses, for all farmland that needs rehabilitation or needs to be permanently removed from production.

Ripple effects

In addition to present and future losses experienced by farmers and landowners, there are ripple effects throughout the regional economy when farmers lose income.  For example, their input suppliers and buyers both lose income, and any reduced consumption (e.g., on food, gas, or other consumer goods) leads to less income for others in the region. The ripple effect of Helene’s impact on farm and forest landowners is estimated to be between $224 and $474 million. This range of estimates is based on the ratios of estimated ripple effects to direct losses provided by economists in Georgia and North Carolina for damages from Helene in those states.

In summary, the work done by Bovay demonstrates the application of economic concepts and principles to an issue of tremendous real-world importance: measuring and documenting the impact of an unprecedented natural disaster on Virginia farms and associated industries. This work joined Virginia Cooperative Extension agricultural damage assessment direct loss reporting and Virginia Department of Forestry timber loss estimates to provide the basis for a $174.26 million request made by the Commonwealth of Virginia to USDA under the American Relief Act.  Virginia subsequently received $60.9 million to support agricultural producers and forest landowners that suffered losses in categories not previously covered by an existing USDA disaster relief program as a direct result of Hurricane Helene. The Virginia Farm Recovery Block Grant Program, implemented by the Virginia Department of Agriculture and Consumer Services with assistance from Virginia Cooperative Extension and the Virginia Department of Forestry, was open for applications through November 7, 2025.  

Updated: November 10, 2025