When Hurricane Katrina struck the Gulf Coast region, the storm brought a halt to the flowof agricultural trade entering and exiting the United States through the Mississippi River Systemcentered on New Orleans and surrounding Mississippi-River-based Gulf ports. Flooding and poweroutages stopped operations at most of the port facilities within the affected region. August 29, 2005. The U.S. Dept. Most major ports located alongthe Texas and Louisiana Gulf coast were temporarily closed in advance of Hurricane Rita. September 24, 2005. Hurricane Damage to Barge Transportation. In addition to an "out-of-sync" transportation network, approximately 140 barges containinghurricane-damaged corn (primarily water damage) were left in the New Orleans region. However, USDA officials have expressed concern thatthe price decline resulting from the temporary delay in the Mississippi barge-based export flow ofagricultural products could persist for at least three months and possibly into the spring dependingon several factors including how quickly barge traffic resumes; how early the winter freeze andshut-down of the upper Mississippi River occurs; and whether the low water levels of the Missouriand Upper Mississippi Rivers are replenished by rainfall. As a result, both producers and marketers are eager to move surplus production throughthe marketing channels. Preliminary estimates by USDA economists are that Hurricane Katrina contributed to $882million in total crop, livestock, and aquaculture (16) losses in the Southeast. USDA reportsthat the greatest agricultural losses caused by Katrina, in terms of value of production, were toaquaculture ($151 million), sugarcane ($50 million), and cotton ($40 million). Top 5 Agricultural Commodities: Alabama, Louisiana,and Mississippi, 2003
Source: U.S. Department of Agriculture's Economic Research Service. Information on the effects of Hurricane Katrina on Gulf Coast forests is sketchy. The impact of the hurricanes on wood products is less certain. Energy Costs and Agriculture

Following the damage inflicted by Hurricanes Katrina and Rita on the Gulf region's oil andnatural gas production, refining, and importing capability, energy prices -- gasoline, diesel fuel, andnatural gas -- rose sharply. (24) Considerable uncertainty surrounds the longevity of recentenergy price rises, and the implications for U.S. agriculture hinge on their permanency. In the near-term,it is likely that such strong energy price rises will significantly increase energy's share of totalproduction expenses and could significantly alter the farm income outlook for affected farmhouseholds and rural economies. (26) The relative importance of energy costs as a share of totalagricultural production expenses varies greatly by both activity and region. Anhydrous Ammonia and Natural Gas Prices
The post-Katrina jump in U.S. natural gas prices casts a cloud of uncertainty over the futureof the U.S. nitrogen fertilizer industry as well as raising concerns about the potential supply and priceof nitrogen fertilizer for crops in 2006. According to preliminary reports from USDA, the three-state region hasrelatively high participation rates in the crop insurance program. Agricultural producers in a county that has been declared a disaster area may be eligible forlow-interest emergency disaster (EM) loans available through USDA's Farm Service Agency. The combination of the Midwest drought andlosses caused by the two hurricanes is expected to provide momentum for Congress to consideremergency crop and livestock assistance for 2005 production losses some time this year.
On August 29, 2005, Hurricane Katrina struck the Gulf Coast region coming ashore just eastof New Orleans. On September 24, 2005, Hurricane Rita hit the Gulf Coast region making land fallnear the border of Texas and Louisiana. Both hurricanes left behind widespread devastation. Ritaappears to have done most of its damage to energy infrastructure off-shore in contrast to Katrinawhich devastated large swaths of Louisiana, Mississippi, and Alabama. This report examines theimpact of these hurricanes on three important factors affecting the U.S. agricultural sector: marketinginfrastructure based on the Mississippi River waterway and Gulf ports; production losses for majorcrop and livestock producers in the affected region; and potential consequences for agriculturalproduction as a result of high energy costs. It also discusses the federal government response toagricultural concerns.
Agricultural producers from the states directly impacted by Katrina have suffered economiclosses, although this varies greatly by crop and locality. Preliminary estimates by USDA is thatHurricane Katrina contributed to $882 million in total crop, livestock, and aquaculture losses. Thoseactivities most affected were aquaculture ($151 million), sugar cane ($50 million), and cotton ($40million). The damage estimate does not include losses in timber and nursery and greenhouseproducts. No preliminary estimate has been released by USDA concerning agricultural damage fromHurricane Rita.
Hurricane Katrina temporarily halted the flow of agricultural trade through New Orleans --a major gateway for U.S. oil imports and agricultural exports -- causing commodity prices to declinein interior markets along the Mississippi River waterway. Although partial recovery of marketinginfrastructure occurred soon following Katrina's passage (with a brief shutdown in late Septemberdue to Hurricane Rita), substantial congestion and high costs continue to plague the MississippiRiver grain transport network. This traffic bottleneck and its depressive effect on farm commodityprices could persist into the spring of 2006.
Energy prices jumped substantially in early September 2005, as a significant portion of U.S.petroleum and natural gas production, import, and refining facilities were damaged and shut down. There is considerable uncertainty surrounding the permanency of energy price rises and theirpotential impact on the U.S. economy in general, and U.S. agriculture in particular. By raising theoverall price structure of production agriculture, sustained high energy prices could result insignificantly lower farm and rural incomes in 2006.
Certain ongoing federal programs, primarily crop insurance and disaster loans, are availableto eligible producers. The combination of Hurricanes Katrina and Rita with a Midwestern droughtmight also cause Congress to consider supplemental crop and livestock disaster assistance. Thisreport is intended as an overview of how the hurricanes have affected and are likely to continue toaffect the agricultural sectors of both the impacted regions and the United States. It is not intendedto provide a day-to-day update of events. It will, however, be updated as events warrant.