Agriculture exporters feel the impact of Katrina
Agriculture producers are among the shippers most heavily affected by the Hurricane Katrina because the Mississippi River is a key transport lane for export grain and other foodstuffs.
More than half the nation’s grain exports are loaded on ships at the Port of New Orleans, which is now closed. Growers who relied on barges will be forced to use more expensive truck and rail options to transport their products.
The silver lining for corn and soybean growers is that the harvest season is still a few weeks away. Slightly more than 60 percent of corn and soybean exports originate in New Orleans.
“Although there’s never a good time, it’s not as critical as it would be, say, six or eight weeks down the road, when there would be a flood of corn and soybeans coming down the river,” Terry Francl, economist for American Farm Bureau Federation in Washington, said in a statement.
Crop and livestock producers are estimated to face $1 billion in extra shipping costs and higher fuel prices, he said.
With barges loaded with farm goods stranded on the Mississippi River and no access for oceangoing vessels, grain elevators have reduced the prices they are paying growers and Francl cautioned that U.S. grain and oilseed producers may see the cash prices bid for exported crops decline another 5 cents to 10 cents per bushel while the Gulf ports are effectively shut down for repair and restoration.
'Furthermore, there is mounting concern that the shutdown will compel international buyers to look to other sources, such as China for corn, or South America for soybeans,' he said, adding that could amount to an additional $500 million loss for agriculture producers.
Flooding from Hurricane Katrina has placed about 8 percent of the world's coffee supply, which is stored in warehouses in New Orleans, under threat. N'stor Asorio, executive director of the International Coffee Organization, estimated that the loss of the 96,000 tons of coffee stored in New Orleans would take a year to replace and would raise the price of coffee.
The port also stores goods such as green coffee beans from Central and South America bound for U.S. roasters. About 1.6 million 132-lb. bags are stored around New Orleans, said Judy Ganes of J. Ganes Consulting in New York. That’s about 27 percent of U.S. green-coffee stores, according to information posted on its Web site by the American Association of Port Authorities.
Meanwhile, freight railroads whose lines through the New Orleans area were damaged by Hurricane Katrina continued to detour traffic as far north as Chicago. Trains are being stopped as far as 400 miles from New Orleans on CSX Corp.'s lines and up to 200 miles from the city on Norfolk Southern Corp. rails. About 100 freight trains per day serve New Orleans.
Norfolk Southern said it has restored rail service between Birmingham and Mobile, Ala., and between Birmingham and Meridian, Miss. Traffic normally moving through New Orleans for interchange is being rerouted with the help of other railroads.
An embargo is still in place for all shipments to areas south of Meridian, except Norfolk Southern served facilities.
Customers with cargo that normally moves through the affected region should expect continued delays, the railroad said. Diversion charges for shipments currently en route to these locations will be waived and shipments normally past their last diversion point will be allowed for an additional charge.
The Port of Mobile sustained minimal damage from Hurricane Katrina and vessel traffic is not being diverted to Houston or other ports, according to a bulletin on the AAPA Web site.
Rising water in Mobile deposited silt and debris in the general cargo areas causing some cargo damage. Cargo is being delivered to customers, but new cargo will not be received until after clean up operations are completed, a process that is expected to take a few days.
Alabama port officials also report that bulk terminals did not sustain any damage and are open for operations. The ship channel could be open to vessel traffic as early as today.
Houston port officials said they expect some cargo originally destined for New Orleans, Gulfport and Pascagoula, Miss., to be diverted to Houston and other ports.
There is considerable damage at Port Fourchon, La., which is used to support offshore oil facilities. There are several large capsized vessels blocking the inland channel. The port hopes to be operating within a week, according to the AAPA. The port’s most pressing need is for a large generator to fuel and feed recovery workers.