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Congressional Committee Hears River Recovery is Slow

posted on October 28, 2005

Florida officials said this week that Hurricane Wilma did more damage to the state's farm sector than any other natural disaster in decades. Florida Ag Commissioner Charles Bronson says the loss of greenhouse and nursery plants in the state's lucrative horticulture industry could lead to an "economic meltdown" in rural areas. And while no official estimate has been released, Bronson predicts agriculture losses will top $1 billion.

The damage from Wilma joins a long list of hurricane-related havoc in 2005. And not all the injury occurred in the direct path of a hurricane. Two months after Hurricane Katrina struck the Gulf Coast, farm interests along the Mississippi River still are feeling the impact of the storm.


Congressional Committee Hears River Recovery is Slow

Timothy Gallagher, Sr. VP and General Manager, Grain Division, Bunge North America, St. Louis: "Our industry continues to operate at a capacity below its norm. A combination of lost days, reduced capacity and idled loaded barges continue to present challenges to our industry and farm customers."

Tim Galleghar of Bunge hits the highlights in a long list of challenges facing the grain industry and producers.

A House Agriculture Committee was told this week there still are 250 idled barges along the river holding damaged grain ... despite the USDA's efforts to help companies dispose of the soiled commodities.

Floyd Gaibler, Deputy Under Secretary, Farm and Foreign Agricultural Services, USDA, Washington, DC: "Lack of adequate labor to unload barges and turn them around is still resulting in huge bottleneck of barges in the south and critical shortage of housing for barge crews in southern areas."

Floyd Gaibler says only 1,000 workers have returned to work. 15-hundred to 3,000 are normally employed. Even though there is a work shortage, some Midwest grain shippers say they still have been able to purchase barges when they need them... albeit at a hefty price.

The manager of a central Illinois river terminal told Market To Market he paid a peak price two weeks ago of 825% -- or $1.25 per bushel  for barges. He paid that price, he said, because he really didn't have temporary or ground storage space. By midweek, barges were trading at 700%.

Just upstream, at a southeast Iowa terminal, the manager there said his elevator is at its 3.6 million bushel capacity and he hasn't had to put grain on the ground because he too, has been able to get the barges he needs.

Both operators say they are lucky because the corn harvest is coming in at a slower pace due to the smaller crop size, in their area this year.

But luck is a relative term. Business on the river is trying to adapt to a bad situation. It is a situation, the committee heard more than once, that has had a ripple effect on the commodity business.

Robert Dickey, Producer, National Corn growers, Laurel, Nebraska. "Even though not all corn growers ship on the Mississippi River, all growers are impacted by it. Current prices are a direct result of continued problem of barge movement in the Mississippi river and limited capacity."


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