Hurricane increases Ohio farms' cash woes

Farmers want Congress to fight for them against rising fuel prices.
By NANCY TULLIS
VINDICATOR STAFF WRITER
CANFIELD -- Bad weather and higher fuel prices have battered farmers across the U.S. heartland, including those in the Mahoning and Shenango valleys.
Lee Lipp, grain buyer for Agland Co-op, said farmers already watching fuel prices skyrocket and suffering crop losses because of drought are waiting to see if the corn and soybean crops they harvest in the next few weeks can be exported.
Lipp said area farmers are feeling the effects of Hurricane Katrina's destruction in higher fuel prices caused by loss of oil wells and refineries along the Gulf Coast. Katrina also may hamper farmers' ability to ship and sell grain because New Orleans ports that accept grain are under water.
Much of the corn and soybean crops produced in the area are exported to the European Union, China and Japan, Lipp explained. He buys corn and soybeans and ships them by truck to Ohio River ports such as East Liverpool.
Grain then travels by barge down the Ohio and Mississippi rivers and then to depots in the Mississippi Delta around New Orleans.
Most of those depots were under water after Katrina went through, but some are beginning to recover, Lipp said.
Cost passed on to farmers
Lipp said farmers are paying higher prices to fuel farm machinery and will see other operational costs increase because support businesses will pass higher fuel costs on to them.
He said farmers will pay higher prices for grain processing if the grain has to be dried. One benefit of the drought is that crops that are harvested might not need to be put through drying machines, which use natural gas and other fuels to produce a high heat that removes moisture from the grain, he said. Lipp explained that grain with too much moisture will spoil in storage.
Fuel price jumps make it hard to estimate prices and will probably mean some loss in profit for grain buyers, who contracted with farmers at prices based on much lower fuel costs, Lipp said.
Joe Logan, Ohio Farmers Union president, said farmers want Congress to fight for them against skyrocketing fuel prices and budget cuts in agriculture funding. He said OFU members will be among hundreds of farmers to travel to Washington, D.C., next week to urge Congress to address rising fuel prices, reject budget cuts in agriculture funding and enact weather-related disaster assistance.
Seeking disaster status
Gov. Bob Taft has asked Michael Johanns, U.S. Department of Agriculture secretary, for disaster declarations in 72 Ohio counties, including Mahoning, Trumbull, Columbiana, Ashtabula and Geauga counties because of agricultural crop production losses caused by the summer drought.
While the extent of the destruction resulting from Hurricane Katrina will likely take weeks or longer to assess, conservative estimates predict $1 billion in damage done directly to crops and livestock, according to Terry Francl, American Farm Bureau Federation senior economist, with an additional $1 billion in indirect costs expected as a result of a growing waterway shipping crisis and soaring fuel prices.
Slightly more than 60 percent of U.S. corn and soybean exports originate from the New Orleans area. With barges loaded with farm goods stranded on the Mississippi River and no access for oceangoing vessels, grain elevators have reduced the prices they are paying growers.
Francl cautioned that U.S. grain and oilseed producers may see the cash prices bid for exported crops decline an additional 5 to 10 cents per bushel while the Gulf ports are effectively shut down for repair.
Also, there is mounting concern the shutdown will compel international buyers to look to other sources, such as China for corn or South America for soybeans, he said. This could bring a half-billion-dollar export loss for U.S. producers, he added. Francl noted that the recent 30- to 40-cent-per gallon jump in gasoline and diesel prices could come with a half-billion dollar cost for farmers.
Bob Stallman, American Farm Bureau Federation president, said some state farm bureaus will meet soon to outline how to respond to the disaster.