I have been watching the news about Hurricane Harvey this past week, being amazed by the rainfall amounts, dismayed by the widespread destruction, and thankful my sister and family who live in far eastern Texas are safe (although I am unsure about her house/home).

 While southeast Texas is many miles from here, large hurricanes that have previously come ashore in that area also have indirectly effected local agriculture and residents as well. Here is a quick synopsis of these expected effects.

One result of Hurricane Harvey that will effect almost everyone is a spike in gasoline prices. Several refineries in the Houston area have suspended operations, which in turn decreases the levels of gasoline availability. Gasoline prices in David City have already increased by $0.20/gallon in the past 5 days.

There is uncertainty of both the duration and level of gasoline price increase. Price increases following some recent hurricanes have been noted to last for at least six weeks. In the aftermath of Hurricane Katrina which centered on New Orleans earlier this century gas prices were noted to double in some areas, however that hurricane effected the actual well fields in the Gulf of Mexico much more than reported thus far with Hurricane Harvey.

While southeast Texas doesn’t produce corn and soybeans as extensively as the part of the country, they do have agriculture. Sugarcane fields, which yield crops over a multi-year period, have been effected. Following Hurricane Katrina the lost cane production led to a potential sugar shortage. Responding to the shortage, the Secretary of Agriculture raised the import quota on Mexican sugar. Western Nebraska, where sugar beets are grown, will probably see higher prices for their crops for the next few production cycles.

Soybeans in southeast Texas were also underwater, however, the effect of the crop loss on soybean price is unknown. Of more concern are the exports, more specifically the ports. The main impact of the storm on agriculture is likely to involve ocean shipping and exports. In 2004, 22 percent of U.S. wheat exports, 71 percent of corn exports, and 65 percent of soybean exports passed through Gulf ports.

Texas ports typically handle nearly one-fourth of the country’s wheat and a major portion of its corn and soybeans, but the shutdown of ports ahead of Harvey halted exports. The effect of the shutdown on local crops for the upcoming harvest is unknown, as the ports are expected to be open again. Severity is not expected to be that of Hurricane Katrina which severely damaged the ports and shipping through New Orleans, with some ports being out of service for over a year.

Following Hurricane Katrina corn and soybean prices plummeted in places like southeast Missouri and western Illinois, growing regions which ship almost all of their harvest down the Mississippi river. Price drops of 20-25 cents/bushel at grain elevators were common. In contrast, prices actually rose in western Iowa and eastern Nebraska, regions that ship their harvest via rail to the Pacific Northwest.

Hurricane Harvey is also effecting the livestock industry of the Gulf Coast region where there are 1.2 million beef. Many producers had adequate warning and were able to move their cattle inland to higher ground. Effects for local beef producers is still unknown.


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