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Wednesday, September 7, 2005 - Page updated at 12:00 AM

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Northern exposure: Mississippi's woes extend upstream

The Washington Post

ELWOOD, Ill. — Frank Walsh bends over to examine his soybean crop. He shouldn't have to; in good years, the beans would be up to his chest, about 42 inches high. This year, as the result of a drought, they are at his knees.

Drought might be the least of the Walsh family's worries these days, as farmers start to feel the impact of Hurricane Katrina. Just two weeks before harvest begins, Illinois farmers who rely on the Mississippi River to carry soybeans and corn downriver for export cannot be sure their crops can get through and worry higher transportation prices will drive down earnings.

Friday, the price for corn at the river grain elevator the Walsh family uses was more than 20 percent lower than it was 10 days earlier.

"The river is saying, 'We don't want your corn,' " said Pat Dumoulin, who runs a 700-acre farm with her husband and two sons in Hampshire, Ill., about 50 miles north of Elwood.

The Mississippi is a river of commerce, an artery for about 500 million tons of cargo each year, including coal, timber, iron, steel and chemicals. About 60 percent of the nation's grain exports move down the river. The ports in Louisiana make up the largest port complex in the nation and are major terminals for oil and other petroleum products.

The extent of the damage upriver will depend on how soon and how completely the Mississippi and shipping facilities return to service.

Saturday, the river was reopened to traffic, but only to ships that extend no more than 35 feet below the waterline. Typically, ships are allowed to reach 45 feet below the water's surface. The hardest-hit areas, like the Port of New Orleans, were turned into one-way channels. The ships also have to run through one at a time at a dangerous turn at Algiers Point, in the heart of New Orleans.

From 30 to 40 percent of vessels are expected to be rerouted away from the Mississippi, said Michael Titone, president of the Mississippi River Maritime Association. For those finding their way to ports upriver that escaped Katrina's wrath, river buoys are gone and the channels are not clear, making it difficult to navigate.

Late Saturday, Tim Osborn, the National Oceanic and Atmospheric Administration's manager of regional operations, received an urgent call at his home in Lafayette, La. The pilots of a tanker full of about 100,000 tons of crude oil, or about 600,000 barrels, were blocked from entering Shell Oil Co.'s Motiva Enterprises LLC refinery dock on the Mississippi River at the town of Convent because of possible obstructions under the water.

The pilots and Coast Guard needed the NOAA to navigate the waters and make sure the area was clear of obstructions. Meanwhile, the crude sat at anchor.

Osborn and others have spent the past few days on watercraft, mapping underwater perils for ships like the 850-foot-long tanker. Hurricane-deposited silt could cause a tanker to run aground. A collision with a sunken barge could do even more damage.

"Hundreds and hundreds of barges disappeared," said Edward Peterson, executive director of the Louisiana River Pilots Association. The barges carry an average of 1,600 tons of cargo, he said. "Nobody knows where they are."

River pilots steer vessels through the waters and have been gathering to figure out ways to keep their river running. They are staying in temporary quarters on the Boax, a crane barge docked up from the mouth of the river. Pilottown in Plaquemines Parish, where they used to live, was demolished. Ten pilots are stationed for two weeks a time on the barge. Others are flying in and out on helicopters.

In the Port of Greater Baton Rouge, a 25,000-ton cargo vessel half filled with a rubber shipment was being unloaded Sunday. Towering 45-ton cranes lifted pallets onto forklifts.

When Katrina hit, the Pac Alkaid had unloaded half of its shipment at New Orleans, and the ship and its crew had to wait out the storm.

Soon after Mississippi waterways reopened, the ship started for the Baton Rouge port, which survived with little damage and is expected to be the port for many ships that otherwise would have headed to New Orleans.

"We didn't want to waste any time," said Terry Gros, manager of P&O Ports, a company that loads and unloads ships at Baton Rouge. The ship made the 130-mile trip from New Orleans in about 10 hours.

The Walsh family and others acknowledged they are far from desperate, especially compared with the homeless victims of the hurricane. They remain optimistic the Mississippi will be cleared by the time they need it, driving crop prices back up. In the meantime, they worry about the impact of the hurricane on the cost of fuel and fertilizer.

The hurricane happened "at a pretty bad time for the grain market," said Kevin McNew, president of Cash Grain Bids Inc., a commodity intelligence firm. Last year, McNew said, was a record for corn and soybeans, which drove per-bushel prices down; many farmers held back a large portion of their crop, hoping prices would rally. As a result, many farmers and grain elevators need to sell last year's crop to make room for this year's harvest.

"It's a logistic nightmare," said Patrick Mino, grain division manager for Access Ag Inc., which has five grain elevators in northern Illinois. Mino said he had to make room last week by shipping two trainloads of corn, or 840,000 bushels. "It was a fire sale," Mino said. He would have gotten about 10 cents more a bushel, or $84,000 total, if he had been able to use barges.

Each week, about 35 million bushels of corn are exported from the United States, most from the Gulf of Mexico, said Darrel Good, an agricultural economist at the University of Illinois at Urbana-Champaign. "Grain is going to have to start moving through that export facility really soon or there will be a big problem."

Freight prices have climbed to a record $25 a ton from $15.20 a ton two weeks ago, according to one barge company executive.

Farming is always a gamble, and the Walsh family knows that well. Last year, Frank, his two brothers and father harvested record crops and received an average $2.25 per bushel for the corn they sold. They still have about 30,000 bushels, or 20 percent of the crop, in storage. In July, the family sold some of it for about $2.40 a bushel but held a lot back, betting prices would rise as the drought worsened. But even before Katrina, prices had dropped to $2 a bushel.

"We wish we sold in July," brother Matthew Walsh said, grimly and softly.

His demeanor changed when he talked about the business bet the family made on diesel fuel for this harvest. They had signed a contract for diesel fuel at $1.73 per gallon, 10 cents above diesel's selling price at the time. But with diesel now about $2.90 per gallon, it was the right decision, he said, with a wide smile.

Copyright © 2005 The Seattle Times Company

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