Tropical Storms, Agribusiness and Trade
In recent weeks, hurricanes Harvey and Irma have disrupted the lives of millions in Texas, Louisiana, and Florida. These powerful natural disasters damaged property, disrupted trade, and caused major losses for the local agricultural industries. For instance, the state of Texas usually serves as the exit point for about 25% of the United States’ wheat exports as well as important portions of the country’s corn and soybean exports. However, most of the outbound and inbound trade transiting through Texas, Louisiana, and Florida had to be halted for several days and is still not back at full capacity. Simultaneously, due to the severity of the situation, the federal government, through the Department of Homeland Security (DHS), temporarily waived the restrictions of the Jones Act for ports in Florida, Puerto Rico, and other affected areas. Officially known as the Merchant Marine Act of 1920, the Jones Act only allows for US-built, flagged, and staffed cargo vessels to operate in between two or more domestic seaports. Therefore, this temporary waiver allowed foreign cargo vessels to transport essential goods, such as fuel and food, between the Northeast and southern ports both right before and immediately after the hurricanes struck.
Tropical Storms, Agribusiness and Trade
In terms of agricultural production, Texan farmers of major, seasonal cash crops like cotton and rice, who were expecting to collect some of their best harvests during the month of September, suddenly, lost everything to unforgiving rain and wind. Similarly, it is estimated that at least 1.2 million beef cows had to be evacuated from grazing terrain throughout 54 counties that Texas’ Governor Greg Abbott declared disaster zones. In the case of Florida, the citrus industry has been hit the hardest as hurricane Irma passed right through orange and grapefruit production regions, causing losses to both unpicked fruits and tree orchards themselves. It is expected that some of these key agricultural products, including citrus, tomatoes, cucumbers, and cereals, will have higher price tags for the rest of the year in national markets, as supply will certainly be lacking due to these natural disasters.
In order to allow farmers more time to assess their situation and restore their operations, Secretary Perdue announced last week that the Department of Agriculture is allowing those farmers affected by the hurricanes an extra sixty days to submit their applications for a financially stressed loan from the USDA’s Farm Service Agency. Likewise, the USDA will allow additional time for farmers to fill insurance claims as well as assisting private insurance companies to make sure that all insured operations receive their proper compensation.
The thoughts of Farmfolio’s CEO Dax Cooke and all of the Farmfolio team are with those affected by the hurricanes and tropical storms that have hit the southern United States.