The human toll of Hurricane Katrina in New Orleans and the Gulf Coast is catastrophic. Marketing specialists expect economic consequences will hit the pocketbooks of farmers as ships can't get in or out of the Port of New Orleans.
It a major port for U.S. corn and soybean exports. The impact on corn is immediate and dramatic, explains University of Illinois Extension marketing specialist Darrel Good. Although no soybeans can leave the port, this is not the time of year when exports are the heaviest.
"This time of year, about three to five million bushels are shipped each week but later in the fall, especially as we get to the heart of the harvest season, the total jumps to 25 to 30 million bushels each week," he says. "From a buyer's standpoint, there are other places to get soybeans now with adequate supplies in South America. U.S. producers will lose a little but the market will go on."
Corn is the real story in terms of agricultural impact, says Good. "Upwards of 35 million bushels of corn are exported from the United States each week, most going out of the Gulf. That trade has come to a screeching halt. And this will have reverberations all the way up the river system."
Because there is no place for the corn to go, farmers who are seeking cash bids for their corn up and down the rivers system that feeds the Port of New Orleans, find themselves with "just awful prices," says Good. "Cash bids have just collapsed. Nobody wants to buy corn they can't ship and sell."
It is difficult to predict when the Port of New Orleans will re-open based on the limited information coming out of the hurricane-devastated area.
"The Port operators may be able to get the electrical system restored but the real problem becomes one of traffic. There may well be a significant amount of damage and debris," says Good. "Some are saying it could be a month before the Port is functioning. It seems to me that if they could get it going that soon, they'd be doing pretty well."
Good fears that producers may face a difficult harvest season as nature's catastrophe plays out in the farm economy. "The key to restoring service may be getting the levee on the lake repaired," he says. "Then, they can start pumping out the city and begin rebuilding."
In the meantime, producers can basically only watch and wait, he notes.