Too early to tell if hurricane will affect crops, costs - NRA News Blog

It's been a wild ride for food producers as drought affected corn and soybean crops this summer and then a tropical storm-turned-hurricane hit the Gulf Coast this week.

The latest weather event could potentially cause damage to sugar and rice crops in Louisiana and Mississippi, but it is still too early to tell.

Isaac, a Category 1 hurricane, hit the Panhandle Aug. 28, the seventh anniversary of Hurricane Katrina. More than 18 inches of precipitation has fallen on some areas, combined with winds of at least 75 miles per hour, causing flooding, evacuations and business closings.

Commodities consultant John Barone, founder and CEO of MarketVision Inc. in Fairfield, N.J., said it is too soon to tell if there is crop damage in the region or how extensive it could be.

"It depends on where the storm goes," he said. "The first crops affected in Louisiana and Mississippi areas could be sugar and rice. The real effect now is from the shutdown of Gulf Coast oil refineries that occurred ahead of the storm. Those closings have resulted in yet another uptick in gas prices."

A U.S. Department of Agriculture report said more than one quarter of the sugar-cane crop in Louisiana had been planted by Aug. 19.

Barone said that if the hurricane does damage the rice and sugar crops, it could eventually mean even higher food costs for restaurateurs and other foodservice operators.

Rising food costs have plagued restaurant and foodservice operators for some time now. Before Isaac, the drought this summer damaged more than half of the U.S. corn supply. That caused an increase in feed prices, which has led to a slowdown in the production of poultry, pork, beef and dairy products.

But the USDA, in an Aug. 27 blog post, stated that the rainfall could bring some good news.

According to the blog, any moisture that Isaac produces in drought-affected areas of the mid-South and lower Midwest could "help revive pastures and boost soil moisture reserves in preparation for winter ... planting."

Barone agreed with the assessment, saying the rainfall is "likely to add needed subsoil moisture for winter wheat."

Source: http://www.restaurant.org/nra_news_blog/2012/08/too-early-to-tell-if-hurricane-will-affect-crops-costs.cfm

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