Farmers May See Losses of $2 Billion

U.S. farmers and agricultural producers may see losses of as much as $2 billion from Hurricane Katrina, as estimates of damage to crops, farms and exports rise from the natural disaster.

Direct damage to crops and livestock may exceed $1 billion, said Terry Francl, chief economist at the American Farm Bureau, which represents about 5 million farmers. Another $1 billion may be lost from delayed exports of corn and soybeans and soaring fuel prices, he said.

The Farm Bureau said considerable damage was done to sugar cane, cotton, soybean and corn crops in Mississippi, Louisiana and Alabama. However, it said the storm’s effect on farm production and prices nationwide “will likely be negligible in light of strong harvests elsewhere.”

In Mississippi, which supplies almost 10% of U.S. poultry, chicken producers have been hurt by fuel shortages, power outages and road blockages caused by the storm, National Chicken Council spokesman Richard Lobb said.

Although the storm disrupted production at 11 of the 14 chicken slaughter plants in the state, all are now running at pre-hurricane levels, some with generators powered with diesel fuel, Lobb said.

Springdale, Ark.-based Tyson Foods Inc., the world’s largest meat processor, said the shutdown of four plants in Mississippi because of Hurricane Katrina would cost the company $10 million to $20 million.

Laurel, Miss.-based Sanderson Farms Inc., the third-largest chicken producer behind Tyson Foods and Pilgrim’s Pride Corp., lost about 4% of its 1,874 broiler houses, along with 10% of its 35 million live bird inventory.

Spot prices for Georgia Dock boneless, skinless chicken breasts have risen about 3.6% to $1.54 a pound since Aug. 29, the day Hurricane Katrina made landfall.

The jump in prices may be temporary, JPMorgan analyst Pablo Zuanic said. “We expect little impact on overall national chicken supplies and, as a result, on chicken prices,” Zuanic said.