What Will the Gulf Oil Spill's Impact Be on Agricutlure?

Thus far, the oil spill catastrophe in the Gulf of Mexico hasn't disrupted barge traffic into or out of the Mississippi River.

Compiled by staff

Published: Jun 25, 2010

Thus far, the spill has not disrupted traffic into or out of the Mississippi River or Mobile, Ala. All scheduled freight deliveries have been made. No ship calls have been cancelled due to the spill. This is expected to continue for the foreseeable future, says Mike Steenhoek, executive director of the Soy Transportation Coalition. The STC is headquartered at the offices of the Iowa Soybean Association near Des Moines. Steenhoek provides the following update on the impact of the spill on agriculture so far.

Cleaning stations – utilizing high pressure hoses – have been established. On May 25, a tanker ship requested to be cleaned after encountering some oil en route to the entrance to the Mississippi River. The cleaning process took 30 minutes to complete. The tanker ship was inspected further after entering the Southwest Pass – the main shipping channel for entering or exiting the Mississippi River system. No oil was detected, and the vessel proceeded upriver. This has been the only ship to be cleaned following the oil spill.

Slowdown of Mississippi River barge traffic would impact grain prices

Congressmen Bruce Braley, D-Iowa and Phil Hare, D-Ill. sent a letter on June 10 to President Barack Obama and Coast Guard Admiral Thad Allen, urging them to fully evaluate the impact of the BP Oil Spill on Mississippi River shipping lanes. As oil continues to drift closer to the Southwest Passage, Braley and Hare are concerned about the impact a slowdown in Mississippi River traffic could have on prices for farmers, producers and distributors.

Braley and Hare requested that the Obama Administration perform a full analysis on the potential economic impact the Gulf oil spill could have on barge traffic along the Mississippi River, and the further effect on commerce and local economies along the Mississippi. Braley and Hare hope an efficient and thorough study of the impact could help mitigate the cost of the spill for the agricultural industry in Iowa, Illinois and the rest of the Midwest.

The Soy Transportation Coalition applauds Congressmen Braley and Hare for being engaged in this issue and making sure the potential impact of the oil spill on agriculture will not be ignored. In 2009, 21.8 million metric tons of soybeans (800 million bushels of soybeans) were exported from the Mississippi Gulf region. This amounts to 61% of the total soybean exports by port region. Among port regions, the Pacific Northwest ranked second with 9.7 million metric tons (356 million bushels) of soybeans exported in 2009, 27% of total soybean exports by port region. A disruption of shipping from the Mississippi Gulf region would have a detrimental impact on agriculture, in general, and the soybean industry, in particular. "Our ability to meet customer demand would be compromised. Farmer incomes would be reduced due to a likely widening basis," says Steenhoek.