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Commodity shipping facing challenges, higher costs

Starkville — Hurricane Katrina closed the three ports serving Mississippi agricultural commodities, so products leaving the state face new challenges and increased costs.

The Port of Gulfport was wiped clean of its infrastructure, the Port of Pascagoula was damaged, and the Port of New Orleans, while not substantially damaged, has little infrastructure and few employees left to support it. All three served Mississippi producers.

Almost 60% of U.S. grain goes through the Port of New Orleans, according to the National Feed and Grain Association. The Wall Street Journal reported that ports in the affected area handle 20% of the nation’s total imports and exports.

The Port of New Orleans served Mississippi River traffic. John Anderson, agricultural economist with the Mississippi State University Extension Service, estimated that half of the state’s grain exports passed through New Orleans. “With that port down for maybe up to four weeks, there have been concerns that we might lose some export business,” Anderson said.

Much of Mississippi’s grain crop is used in-state for the poultry and catfish industries, but many elevators in the Delta ship grain out on the river. Anderson said that trucks, trains and other means of transportation will have higher costs than river transport on a barge, and this will be reflected in both commodity prices and industry profits. However, by shortly after Labor Day, some river traffic was moving again and the Port of New Orleans had begun to resume some business activities.

“There are a lot of challenges remaining for these ports to overcome, things like restoring electricity and getting workers on site, but these ports have made remarkable progress,” Anderson said.

Other ports available to Mississippi exports include Mobile, Tampa, Houston, Baton Rouge and Galveston.

“The question is how much capacity do we have at the other ports and how much will it cost to get shipments to these other locations,” Anderson said. “All these shipments have to be diverted to somewhere else until these ports can get up and running.”

The poultry industry relied heavily on the Port of Gulfport and to a lesser degree the Port of Pascagoula to export chicken. In addition to the capacity to load and unload shipping freight, Gulfport had extensive refrigerated warehouses to store the meat prior to shipment.

Mike Pepper, president of the Mississippi Poultry Association, said most of the U.S. chicken exported to Russia passed through Gulfport. “That port is wiped out as of now. It’s too early to assess when Gulfport may be rebuilt. There’s even some talk of moving the port to a new location,” Pepper said.

Pepper said a week and a half after the hurricane, the state’s poultry processing plants were running again at 80% to 90% capacity. Mississippi produced 10% of the nation’s chicken, and Pepper said he thinks there could be a slight price increase caused by Katrina’s damage in the state.

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