Gulf oil crisis may threaten ag exports

Gulf oil crisis may threaten ag exports    Two Midwestern congressmen have asked the Obama administration to study the potential economic impact of the oil gusher in the Gulf of Mexico on industries that rely on barges and oceangoing vessels to move export commodities down the Mississippi River.
   In a June 10 letter to President Obama and Coast Guard Admiral Thad Allen, the government's incident commander, Reps. Philip Hare, D-Ill., and Bruce Braley, D-Iowa, expressed concern that port closures or requirements to clean vessel hulls before entering the river could slow barge traffic and harm the competitiveness of farmers, producers and distributors in overseas markets. They said they want the government to help mitigate the cost of the spill on the agricultural sector.
   'Past experience has shown that delays in traffic have had a drastic economic impact on regions beyond the Gulf of Mexico,' the lawmakers wrote. 'Following Hurricane Katrina in 2005, the agricultural industry suffered sharp declines in the prices of commodities as a result of a traffic slowdown. Access to the Mississippi is crucial to many of the businesses in our districts, and is critical to the agricultural industry, which depends on barge shipping to get its products to the rest of the world at competitive costs.'
   To date, the oil disaster has not affected shipping lanes and vessel traffic through Louisiana ports. The Coast Guard has no restrictions on vessel traffic entering or exiting the Lower Mississippi River or Southwest Pass, the main channel from the Gulf. The oil slick has mostly stayed to the east of the channel. Deep-draft vessels are encouraged to navigate around the heaviest parts of the slick and maintain sufficient speed to prevent the light sheen in other areas from clinging to the hull. In one of the few cases so far of fouled vessels, a tanker was cleaned in 30 minutes on May 25 by two workboats outfitted with high-pressure hoses four miles from the river entrance, according to the Port of New Orleans.
   But agriculture industry officials said they are closely monitoring the situation and developing contingency plans.
   CHS Inc., a diversified energy, grain and food supplier, has not experienced any delays for inbound ocean vessels arriving to pick up grain at its Myrtle Grove terminal on the Mississippi River, south of New Orleans, Steve Talbot, the terminal's general manager, told American Shipper. CHS would have to compare the difference in cost between alternative freight modes and the extra expense associated with continuing to ship by river if restrictions are implemented.
   Agricultural representatives, however, say the oil contamination eventually could interrupt shipping, especially as the Midwest moves into the peak shipping season.
   'If oil does start to interfere and cause significant shipping delays, I'm sure cargo will be diverted to other sites,' Talbot said.
   BNSF Railway has noticed a slight shift to rail of bulk grain products that normally move on the Mississippi River system, John Lanigan, the company's chief marketing officer, said June 10 during a forum in Washington that coincided with the release of the annual State of Logistics report by the Council of Supply Chain Management Professionals.
   'It's not a huge change, but we'll see if that accelerates, particularly as we move into the harvest season,' he said.
   Bulk rail would be the primary option for grain shippers, but the fact that one barge can carry the same volume as 16 hopper cars means any attempt 'to move all the volumes going down the river to rail is probably a physical impossibility,' Talbot said.
   About 90 million tons of grain move through the Lower Mississippi River system per year.
   'They're just not enough railcars and trackage to accommodate those kinds of numbers,' he said. ' Eric Kulisch