While the human toll of Hurricane Katrina in New Orleans and the Gulf Coast area is tragic, there are economic consequences as well for Illinois and Midwestern farmers, said a University of Illinois Extension marketing specialist.
"It is my understanding that the Port of New Orleans is closed. There is no electricity and they can't get ships in or out," said Darrel Good. "This is a major port for U.S. corn and soybean exports and the impact, particularly, for corn could be significant."
Although no soybeans can leave the port, this is not the time of year when exports are the heaviest, Good noted.
"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.
"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."
With corn, however, the impact is immediate and dramatic.
"Corn is the real story in terms of agricultural impact," said 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," said Good. "Cash bids have just collapsed. Nobody wants to buy corn they can't ship and sell."
Many Illinois corn producers are facing a double-whammy.
"The areas in our state that were hardest hit by the drought – from Peoria on north – are the same ones that rely heavily upon the Illinois and Mississippi rivers to sell their corn," said Good. "Their corn was damaged by a drought and now their harvest faces low prices because the shipping system is disrupted."
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," said 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 said. "Then, they can start pumping out the city and begin rebuilding."
In the meantime, Illinois and Midwestern producers can basically only watch and wait, he noted.