June 4, 2010
Gulf of Mexico oil spill could hurt Iowa corn
An Iowa State University economist said Thursday (June 3) that Iowa's corn exports could be harmed if the oil accumulating in the Gulf of Mexico enters shipping lanes.
"It wouldn't take much to have a major impact here," said Chad Hart, Iowa State University Extension markets specialist. Hart said farmers could lose 10 to 50 cents per bushel.
"If the oil slick got into what is called the Southwest Passage, which is a canal that goes from New Orleans out to the Gulf of Mexico, we would be looking at severe delays in getting our corn and soy shipped overseas," said Chad Hart, ISU professor of economics.
Hart said ships can sail through the oily water, but would need to be cleaned when they enter port. The result would be much slower movement of grain out of the Midwest to foreign markets and a search for alternative, more expensive shipping routes.
"We watched corn prices that had been in that US$2.30 to US$2.40 per bushel range drop below US$2 because of shipping backups with (hurricane) Katrina," said Hart.
So far only two ships needed cleaning. Estimates put the oil slicks about a mile from where ships park, waiting for their turn in the lanes.
A lot of people with a lot of money at stake are hoping the oil will not drift any closer. "We've been lucky and we hope to continue to be," said Hart.
