U.S. Farmers Fret Over Stalled Exports

Barge freight traffic on the Mississippi River rebounds slowly, after Hurricane Katrina shut down the New Orleans port. Many farmers are worried their crops won't make it down the river to be shipped abroad — the destination of a quarter of U.S. harvests. Rising surpluses have already led to lower prices in the domestic market.

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Many farmers are watching the news out of Louisiana very closely. They want to know when barge traffic on the Mississippi River might return to normal. Roughly a quarter of all US grain, wheat, corn and soybeans is sent overseas, and much of that is shipped down the Mississippi, past New Orleans and on its way through the Gulf of Mexico. With harvest season already under way in some places, Midwest farmers are concerned about Katrina's impact on their business. NPR's Jack Speer has the story.

JACK SPEER reporting:

Martin Barbary(ph) has 4,000 acres of corn and soybeans in Carman, Illinois, two hours southeast of St. Louis. Over the years, he's endured drought, disease and bad crop yields, but he says this is the worst he's ever seen it in terms of moving his crops.

Mr. MARTIN BARBARY (Illinois Farmer): The river is the outlet, and without it, it just backs everything up.

SPEER: Barbary began harvesting his crops this week. He relies mostly on barges to get his corn and soybeans to market, but with barge traffic on the river limited to daylight hours and extensive damage to Gulf Coast ports, it could be three to six weeks before things get back to normal. Gary LaGrange is director of the Port of New Orleans. He says there is a good possibility of some limited commercial shipping resuming next week.

Mr. GARY LaGRANGE (Director, Port of New Orleans): We feel as though we'll be properly manned, by that time we'll be powered up and we'll have the necessary crane activity, although maybe only at 25 or 30 percent, to take on priority commercial cargo vessels.

SPEER: But there are concerns that if the grain that is normally exported starts backing up on US docks and in silos, prices will begin to fall. Price declines haven't been too dramatic yet, but many farmers and other agribusiness people are feeling vulnerable. Pat Mino is grain division manager with Access Ag Inc. His company has five grain elevators in the Midwest.

Mr. PAT MINO (Grain Division Manager, Access Ag Inc.): Once we start in to harvest and facilities start filling and you've got to move some on or you've got some contracted to move on and there's not an alternative to go to, then the whole situation gets to be very stressful.

SPEER: Some farmers and co-op managers are studying the possibility of moving some of this year's crop by rail, however, many rail lines are already operating at near capacity; some also suffered damage from the hurricane. On his farm in Illinois, Barbary says for now he's focusing on getting his crops harvested. He says with everything he's already facing, Katrina is one more headache he didn't need.

Mr. BARBARY: With the amount of fuel we use, we've gone from approximately $4 an acre two years ago to $10 an acre fuel cost today. So there's, you know, a 250 percent jump.

SPEER: Barbary and other farmers say they are also likely to face higher costs for fertilizer, since much of that is transported on the river by barge and no one seems to know where prices are heading next.

One thing farmers are likely to do is try and hold on to some of their grain for a while in the hope prices rebound as the situation on the river improves, though it's not clear how long they can do that. Economists already project US economic growth will shrink by at least a half a percentage point during the second half of this year because of Katrina, a figure likely to include billions of dollars in losses for Midwestern farmers. Jack Speer, NPR News.

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