Shipping Crops Problem For Farmers; High Fuel Prices Also A Blow

Bruce Schultz  |  9/9/2005 2:41:41 AM

News Release Distributed 09/08/05

Obstacles to shipping grain out of the Port of New Orleans because of damages from Hurricane Katrina remain a hindrance for farmers, but Wednesday (Sept. 7) brought encouraging signs.

Reports indicate improvements are under way on the Mississippi River, and that may be starting to ease the bottleneck of farm products.

"They actually have a few barges that are being emptied at the elevators," said Michael Hensgens of G&H Seed of Crowley.

Hensgens said local storage space in Southwest Louisiana is virtually nonexistent because of a good rice harvest – although millers are trying to get rice onto the market to make room.

"The bins are full, and the dryers are full," he said.

Corn and soybeans made up almost half of the $16.7 billion in exports shipped out of the Port of New Orleans in 2004, according to the Foreign Trade Division of the U.S. Census Bureau. Rice with a total value of $444 million was shipped out of the port last year. Almost 60 percent of U.S. grain goes through the Port of New Orleans, according to the National Feed and Grain Association

When Hurricane Katrina slammed into the coast last week, barges were tossed, navigation markers were destroyed and river traffic stopped. In addition, high fuel prices are costing farmers considerably more.

"We still have a large percentage of many of our commodities that have yet to be harvested," said Dr. Kurt Guidry, an LSU AgCenter economist. "Producers who are or who will have to buy fuel at these higher prices will definitely be placing a burden on their budgets."

High fuel prices were "definitely not" in Boyd Holley’s budget for his corn and cotton crops. Holley, a producer from Morehouse Parish, said his fuel bill has more than doubled that of last year’s.

"Fortunately, for us, our corn is almost harvested," Holley said, adding that he believes the price of fuel will go down in time.

Eddie Eskew, LSU AgCenter county agent in Jefferson Davis Parish, said field work normally would be starting in preparation for next year’s rice rcrop, but fuel prices have brought the work to a halt.

Keith Fontenot, LSU AgCenter county agent in Evangeline Parish, said farmers are worried – particularly about the lack of storage space for their crops and the problems in shipping grain out.

"Right now a lot of them are worried about space," he said.

Most soybeans are weeks away from harvest, he said, but concerns are being raised that there might not be any storage space.

"A lot of guys around here ship their beans out directly," he said.

Keith Normand, LSU AgCenter county agent in St. Landry Parish, said most soybean farmers will start harvest in about a month, although some already have started cutting early maturing beans. Corn and sorghum harvests are almost finished, he said.

For the most part, farmers don’t have storage facilities, and many local elevators have been out of operation, he said.

"So they’ve been depending on going from the farm to port facilities," Normand said.

Bunge North America announced Wednesday (Sept. 7) that operations are slowly getting back to normal at its export elevator in Destrehan, near New Orleans. The facility was shut down Saturday (Aug. 27) because of Hurricane Katrina.

Bunge’s export elevator and its soybean processing facility in Destrehan sustained minor damage and were without electricity until Friday night (Sept. 2), the company said in a press release issued Wednesday.

"Once power was restored, repairs were made to the elevator and loading of vessels resumed on Sunday as did the unloading of barges," the press release says.

"Although barges can be unloaded at Destrehan, Bunge expects it to be several weeks before barge traffic on the Mississippi and its tributaries is back to normal," according to the company. "At the soybean processing facility, Bunge is testing and repairing equipment in the plant with operations expected to resume shortly."

The company said most of its fleet of more than 450 barges has been recovered, but several elevators along the river lost power.

To aid in the disaster relief efforts across Louisiana and Mississippi, Bunge has committed $250,000 to help employees and the communities where they live and work.

Hensgens said grain prices have fallen since the storm. "Basis quotes have declined substantially because of the limited opportunity to take delivery," he said.

He also pointed out that the problem may not ease anytime soon, since the large ocean-going Panamax ships used to haul grain require 42 feet of water, but they won’t be going up the Mississippi River until maritime officials are certain the ship channel is free of underwater obstructions.

The Coast Guard is requiring vessels with drafts deeper than 39 feet to get special permission before entering the Mississippi River, and marine traffic is restricted to daylight hours only.

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Writer: Bruce Schultz at (337) 788-8821 or bschultz@agcenter.lsu.edu

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