September 21, 2005

 

Katrina costs US farm production US$900 million, USDA says

 

 

The USDA estimates US agricultural production losses due to Hurricane Katrina in the mid-south to be nearly US$900 million after a preliminary assessment, announced US Agriculture Secretary Mike Johanns on Sep 19.

 

"Given the severity of the hurricane, the agricultural losses could have been much greater," Johanns said.

 

However, he pointed out that infrastructure and long-term losses were not accounted for in this assessment.

 

Hurricane-force winds missed major crop production areas in the mid-south.  Substantial portions of soybeans and corn production in hurricane-affected states were harvested prior to landfall of Hurricane Katrina, which also limited production losses.

 

USDA's September crop production survey indicated corn and soybean losses to be modest. However, the assessment report acknowledges that producers will face higher costs harvesting the blown-over crops, which will require more time and high-cost fuel to harvest.

 

Short-term livestock production losses due to the hurricane are estimated in the range of US$30 million after millions of chickens were killed. Producers also lost eggs, poults and chicken grow-out facilities, which will lead to longer-term economic losses for some producers.

 

Dairy producers discarded an estimated US$3 million worth of milk due to lost electricity on farms and at dairy processing plants, and might face a period of reduced cow productivity. An estimated 10,000 cattle were lost.

 

Crop and livestock producers face added losses in the form of damaged or destroyed barns, equipment buildings, fences, machinery, as well as losses associated with degraded farm fields, carcass disposal, electrical power losses and fuel shortages.

 

The nearly US$900 million in lost production due to the hurricane compares to a combined total of US$20 billion in farm cash receipts in 2004 for producers in Alabama, Florida, Louisiana, Mississippi and Tennessee.

 

The USDA assessment also reviews production losses due to the drought in the eastern Corn Belt, estimating US$1.3 billion in corn and soybeans losses in Arkansas, Illinois, Indiana, Missouri, Ohio and Wisconsin. 

 

In addition to hurricane and drought production losses, the report notes that grain and oilseed producers throughout the Midwest have faced reduced prices due to the shipping interruption in New Orleans ports.