While Hurricane Katrina's human toll is tragic, there certainly are wide sweeping economic consequences. Among those impacted will be Corn Belt and other farmers, says Darrel Good, University of Illinois Extension marketing specialist.
The Port of New Orleans is closed, and may be for some time. "This is a major port for U.S. corn and soybean exports and the impact, particularly, for corn could be significant," says Good.
Although no soybeans can leave the port, this is not the time of year when exports are heaviest, he adds.
About 3 million to 5 million bushels are shipped weekly at this time of year. But, later in the fall, especially as we get to the heart of harvest, that jumps to 25 to 30 million bushels weekly.
"From a buyer's standpoint, there are other places to get soybeans now with adequate supplies in South America. U.S. soybean producers will lose a little but the market will go on," says Good.
With corn, however, the impact is immediate and dramatic.
"Corn is the real story in terms of agricultural impact," he notes. "Upwards of 35 million bushels of corn are exported from the United States each week, most going out of the Gulf. That has come to a screeching halt. This will have reverberations all the way up the river system."
Because there's no place for the corn to go, cash bids for corn up and down the rivers' system feeding into the Port of New Orleans will be bleak. "Cash bids have collapsed. Nobody wants to buy corn they can't ship and sell," says Good.
Many corn producers are facing a double-whammy.
In many areas hardest hit by this summer's drought are the same ones that rely heavily on the Mississippi and other rivers to sell corn. "That corn was damaged by a drought and now harvest faces low prices because the shipping system is disrupted," notes Good.
It is difficult to predict when the Port of New Orleans will re-open.
"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," he says. "Some are saying it could be a month before the Port is functioning. If they can get it going that soon, they'd be doing pretty well."
Source: Darrel Good, University of Illinois.