Iowa Public Television

 

Commodity Transport Hit by Hurricane

posted on September 2, 2005


Hello, I'm Mark Pearson.

How do you begin to describe the indescribable? The images of the death and destruction caused by Hurricane Katrina along the Gulf Coast have gone from shocking to mind-numbing.

For victims, the emotional toll is incalculable. But here are the hard facts as of Friday: thousands killed, hundreds of thousands homeless, and billions in damage. Officials say the storm is the worst natural disaster in U.S. history.

The ripple effect on the rest of the nation already is being felt. From gas stations to grocery stores ... and from farms to factories, the damage caused by Hurricane Katrina is commercial, as well as physical.

For many rural Americans on the verge of harvest, the storm's impact may seem remote. But the network that handles the sale and transportation of U.S. grain and livestock has been compromised ... and that includes the operators along the nation's inland waterways.

 

Commodity Transport Hit by Hurricane

Louisiana Gov. "...worry first about the medically needy."

As it should be, the focus in the aftermath of Hurricane Katrina is on search and rescue of hundreds if not thousands of stranded survivors in several southern states.

As survivors are being located and rescued, the hurricane's impact is being felt nationwide  not just in heartfelt sympathy, but in the economic reality of the marketplace.

About half the grain produced in the U.S. exits through Mississippi gulf ports. Before the Category 5 storm struck, the Coast Guard had closed ports and waterways from Texas to Florida. Some of those facilities have been reopened on the lower Mississippi to limited tug and barge traffic, but mostly to help with clean-up.

Grain shippers and handlers already are looking for alternate routes of export. But the river passage is the most profitable way to transport grain.

Before last weekend's devastation, barge shipments on average cost 45 cents a bushel. To ship by rail to the Texas gulf was 80 to 85 cents a bushel. Analysts are unsure how high those prices might go in the wake of the storm.

Cash grain prices also have been affected. The president of Cash Grains Bid, Inc., which tracks basis price information in more than 2,000 markets, told Market To Market the hurricane triggered a 10- to 15-cent change in basis along inland rivers. The firm is tracking prices along the Mississippi, Ohio, and Illinois rivers.

Of greater immediate concern to grain handlers along the river is a pending storage problem. With new crop production arriving in the next few weeks, and old crop supplies still plentiful, analysts say there's sure to be a squeeze in elevator storage. The result, they say, will be significant on-farm storage of the 2006 harvest.

 


Tags: agriculture disasters Hurricane Katrina hurricanes news storms trade transportation weather