Harvey Threatens Grain Shipments as Elevators Shut Before Storm

2017-08-25 15:59:24

By Jen Skerritt

(Bloomberg) — Hurricane Harvey is threatening to disrupt crop shipments as grain handlers and port facilities brace for the storm in the U.S., one of the world’s biggest agricultural exporters.

Grain elevators including Corpus Christi Grain Co. are suspending shipments amid flooding concerns. At least 190,000 bushels of grain that were bound for export have been stranded by the storm, company Manager Jake West said by phone from Corpus Christi, Texas. The company predominantly sends sorghum, mostly used as livestock feed, to China, he said.

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“Everything is shut down right now,” West said Thursday by phone. “Most of our grain movement is export vessels, so they’re battening down the hatches right now.”

Harvey is forecast to become a Category 3 storm before making landfall in Texas, threatening to bring flooding, dangerous storm surges and winds capable of tearing roofs off homes and snapping trees, according to the U.S. National Hurricane Center. Cotton and soybean futures climbed on Thursday amid the outlook for heavy rains, which could damage crops from Texas to Mississippi.

At Corpus Christi Grain, there’s concern that flooding could damage the conveyance system that moves grain, West said. Staff are working to ensure enough sump pumps are in place to keep things dry, he said.

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Ports at the Texas Gulf account for about 24 percent of U.S. wheat exports, 3 percent of corn shipments and 2 percent for soybeans, Mike Steenhoek, executive director of the Soy Transportation Council, said in an email, citing data from the U.S. Department of Agriculture.

Louisiana Impact

The bigger threat to shipments of corn and soybeans, the top U.S. crops, comes from Harvey’s potential impact in Louisiana and the Gulf of Mexico. The storm could bring heavy rains and potentially major flooding to the area. About 60 percent of American soybean exports depart from the region, as do 59 percent of corn shipments, Steenhoek said, citing the USDA.

“It could be as minor as a delay until the storm passes or it could be more damage to the infrastructure itself,” Steenhoek said by phone.

At the Gulf Coast Cooperative, which has a grain elevator about 20 miles (32 kilometers) outside Corpus Christi, the storm will probably delay 125,000 bushels of sorghum bound for export, said general manager Chris Yaklin. Port facilities in the city shut down Thursday and may remain closed until next week, or longer if there’s widespread electrical outages, he said.

The co-op, which also handles cotton, is especially concerned about the fiber because a bumper harvest this year has squeezed storage space and left about 200,000 bales of supplies sitting out in the fields in the region, Yaklin said. A deluge of rain could damage supplies. A bale weighs 480 pounds (218 kilograms).

“They’ll store pretty well against wind, but I’m concerned about rising water,” Yaklin said.

 

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