J. Pat Carter  /  AP
Glendy Leticia Perez, center, and other farm workers collect plants to be saved at the Tour Superior Foliage farm in Homestead, Fla. Tuesday after Hurricane Katrina damaged many of the plants. Farmers and nurseries may not have products to sell for a year or more.
updated 8/31/2005 3:33:13 PM ET 2005-08-31T19:33:13

Hurricane Katrina interrupted farm shipments through New Orleans, where more than half of the nation's grain exports depart for overseas.

It's too early to know the damage to shipping terminals or other facilities, government and industry officials said.

"It'll probably be a ripple effect," said Paul Rohde, president of MARC 2000, a St. Louis-based shippers' coalition. "As the Port of New Orleans puts itself back together, that will determine how quickly it's going to be able to process products."

In the worst-case scenario, snarled river traffic would force shippers to rely on rail or truck transportation, which are more expensive options, particularly with fuel costs rising.

"It would have to be shipped somehow, and the transportation costs would skyrocket as a result of one of only three modes of transportation being eliminated," Rohde said.

The Mississippi River is the cheapest route for shipping many crops and other commodities destined for overseas markets. The United States exports a quarter of the grain it produces; of that amount, more than half departs from Mississippi Gulf ports hit by Katrina.

Katrina also flattened cotton in parts of Mississippi and Alabama and sugar cane in Louisiana, which will reduce yields as well as quality. Cotton prices rose in response Tuesday on the futures market.

The good news is that corn and soybeans, the major crops shipped through New Orleans, are still growing in most parts of the country, and harvest is a few weeks off.

"Although there's never a good time, it's not as critical as it would be, say, six or eight weeks down the road, when there would be a flood of corn and soybeans coming down the river," said Terry Francl, economist for American Farm Bureau Federation in Washington.

The Coast Guard had closed ports and waterways in a span from Texas to Florida, but, in a promising sign for industry, opened the lower Mississippi and other waterways to limited tug and barge traffic to help with cleanup.

"While it will not alleviate the strain on the market, it will help tremendously," said Lt. Melissa J. Harper, a Coast Guard spokeswoman. "It is much better than just having it closed down, because every day that it's closed down becomes a serious economic burden."

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She said the top priority still is rescuing people from the water, which continued to rise Tuesday in New Orleans.

Before the shutdown, shipments had been comparatively slow in advance of the new harvest.

Weekly soybean inspections have been averaging about 5 million bushels, the Agriculture Department said, compared with 53 million bushels last October at the height of the 2004 shipping season. Corn inspections have averaged 29 million bushels a week, compared with 42 million bushels last October.

Crops may change owners several times before being shipped from the Gulf of Mexico. Newly harvested corn or soybeans are often sold to the local grain elevator, which may sell to a river terminal or agribusiness company terminal. From there, crops are loaded onto barges for the trip to the Gulf, where barge cargo is loaded into export terminals and then onto ships.

David Feider, a spokesman for Cargill Inc., which has several grain terminals in the area, said it will take weeks rather than days to assess the impact.

Many Gulf elevators still are trying to contact their workers and haven't been able to inspect their sites, said Randy Gordon, spokesman for the Washington-based National Grain and Feed Association, which represents about 900 grain facilities nationwide. There are reports that power in certain hurricane-affected regions could be out 30 days or more, he added.

Wheat growers, who are finishing their harvest, rely less on Louisiana ports and ship more of their crop from the Pacific Northwest.

"As long as things are operating by mid-October, it should not interfere with soybean exports, said Bob Callanan, spokesman for the American Soybean Association.

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