Direct Hit to Key Export Elevators, 22 Barges on the Loose: Logistical Nightmare Unfolds from Hurricane Ida
AgDay 09/01/21 - Port Damage Hurricane Ida
Hurricane Ida's destructive winds are wreaking havoc on a vital export shipping vein, as grain elevators and barge traffics continue to be tangled from the impacts of the hurricane this week.
Monday, reports surfaced that Hurricane Ida damaged a Louisiana grain export elevator owned by Cargill Inc. It was said to have "sustained significant damage." Ken Erickson, senior vice president of agribusiness with IHS market, focuses on transportation and infrastructure. He says as the destruction continues to surface, it's apparent that the U.S. export program could run into some serious delays as the area works to recovery from the impacts of Hurricane Ida.
"We've got a couple of them that are going to be down for a while, especially with Cargill having just lost some of its elevation to the ships, they've got capability to load two ships there," says Erikson on AgriTalk. "There are others that are going to be without power for awhile, and power is the big story down there with two to four weeks, if not longer, of no power just across the entire region."
Plagued with Power Outages
While there was good news that no levees had topped from the storm surge, the issue of power could plague a key U.S. export area for weeks.
"Thankfully, all the work that went on after Katrina with the levees held it in place and we didn't have major topping and breakthroughs. But it's this power thing," says Erikson. "And where this this hurricane came through, thankfully, it kind of hit in some not as populous areas, but boy, the winds just did some serious damage, and we had a direct hit on those expert elevators. That's going to be hitting our complex at perhaps the worst time going forward here."
Erikson says the U.S. is entering a critical time for exports, especially soybeans, and recovery will need to be swift to prevent any further erosion to the U.S. export program this year.
"In many respects, if there's ever a bad time, this is about as good as it gets to have this take place. The one thing for the major destruction at reserve is going to be one that's going to be down. If you think about the U.S. center Gulf, they have handled nearly 3 billion bushels of exports a year. That's nearly 60% of U.S. corn, wheat, sorghum and soybean exports. They've got the capability to do about 3.6 billion bushels, almost 4 billion bushels, annually. They're running at a fairly high level of capacity utilization as it is."
Critical Time for Exports
The grain elevators that took a direct hit from Hurricane Ida this week weren't small facilities. Erikson says it will be imperative for those facilities to recovery quickly.
"When you start taking out like a Cargill reserve, that probably is about 8% to 10% of center Gulf capacity. CHS Myrtle Grove is down for a few weeks here without power, and it is a similar size facility with about 7% to 8% capacity share, those get to be important," says Erikson. "We've seen inspections, the last few weeks been very anemic, and we're not seeing big flows moving at the moment. This is perhaps the best time for something to happen. And by the time we get the power back on and stuff going, that'll be great. It's just that we're gonna have with some big destruction, and we may learn of others as well. That could be the problem going to this fall when we need everything running really well to get this Expert program moving that we've got plugged in right now."
The Soybean Transportation Coalition (STC) notes that while August isn’t a key time for soybean exports, there’s still a healthy amount of corn typically loaded onto barges this time of year. During the week ending Aug. 19, STC notes 464,138 metric tons (18.3 million bushels) of corn, 141,859 metric tons (5.2 million bushels) of soybeans, and 71,696 metric tons (2.6 million bushels) of wheat were exported from the terminals along the lower Mississippi River. In total, 487 barges of grain were unloaded in the area that week alone.
Just talked with an elevator co that has an elevator south of New Orleans and they’re pulling alligators out of the pit. So if you’re wondering why I work in North Dakota there ya go. — Levi Hall (@LHallHorizon) August 30, 2021
Barge freight is going to be hard to come by a captain friend of mine sent me some pics from reserve barge fleets and it’s bad very bad — Corn-Op1 (@k4sbb) August 31, 2021
It’s more than just power outages that could influence the recovery timeline. On Monday, officials reported 22 barges on the loose with one hitting a bridge in Laffite, La. Leaders believe the bridge is now structurally unsound, but no word on how that could impact barge traffic moving forward.