Hurricane Katrina Could Impact Region 8 Crop Prices

September 12, 2005 – Posted at 4:22 p.m. CDT
JONESBORO, AR -- While many evacuees are faced with an uncertain future, farmers in Region 8 may be feeling the pinch during harvest time.
 Hurricane Katrina has severely hampered grain movement on the lower Mississippi River during the busiest shipping period of the year, and that could have a big impact on the prices farmers will see across Region 8.
The devastating storm couldn't have come at a worse time for shippers and farmers. If things don't get better soon, it's predicted that lost export trade could be a $500 million dollars loss for US Agribusiness.
“Barge traffic down the Mississippi River obviously is slower then what we are accustomed to seeing,” said Riceland Vice President of Rice Milling and Engineering Rick Rorex, “and the price to move the crop down the river is probably increased about 600% since a year ago.”
A summer drought, high fuel prices and now the devastation of Katrina may take a big bite out of profits for farmers this year.
“The yields are ok; the price is fair, but the cost of production is terrible. 30-40% above last year and it's really serious,” said Craighead County Extension Agent Steve Culp.
“The price is very high, but the other issue is the speed at which the barges are actually getting down the river, and a lot of them are not being able to travel, except during the day time, so there is less movement, that will eventually back us up and potentially slow the harvest down,” said Rorex.
This weekend should be the beginning of the peak of the harvest season, but with no place for crops to go...things could backup quickly.
“If we can't move the crop away from the mill as fast as we mill it. Because of lack of transportation, it could easily cause us to back up, and unfortunately slow the harvest some,” said Rorex.
“I think it's created a lot more uncertainty and a lot of fear, more than anything else, and hopefully we'll return to normal. Because by the end of September, it could be serious if we don't have deliveries,” said Culp.
It's estimated that Katrina did about $1 billion dollars in damages to crops and livestock, and with the river slowdowns and rising fuel costs, the U.S. Agribusiness could be looking at another $1 billion dollars in loss.
Barge traffic on the Mississippi River is back at full tilt after being briefly stopped by Hurricane Katrina. River traffic was largely unaffected by the storm according to the U.S. Corps of Engineers. What Katrina affected was the Port of New Orleans, which has all but been shut down since the hurricane hit, although some operations are resuming. The biggest potential obstacle to barge traffic according to the Corps of Engineers is low river levels caused by drought conditions.