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Barry Threatens Farming From Cotton to Sugar in Rain Washout

Shruti Date Singh and Michael Hirtzer

(Bloomberg) -- Tropical Storm Barry’s dangerous downpours are threatening crops from cotton to sugar, grinding shrimping to a halt and forcing grain elevators to shut.

With as much as 25 inches (64 centimeters) of rain projected for some areas, fields could get flooded at a time when plants are still in development stages. Heavy winds could damage sugar mills in the region and other agriculture facilities. Meanwhile, shrimp fishermen in the Gulf of Mexico are docking ships and tying down equipment, and agribusiness giant Cargill Inc. has shuttered grain-loading operations.

“It’s an emotional drain to say the least,” said fifth-generation Louisiana farmer George LaCour, who raises cotton, sugarcane, corn, wheat, rice and crawfish on 10,000 acres, some of which are in the Morganza Spillway.

LaCour, 57, has taken steps to secure his farm and Morganza home, where he’s lived since he was born. He’s redone the drainage tiles, cleared out debris and made sure his generators and chainsaws are working in anticipation of the storm, which is forecast to hit the state’s shores as a hurricane early Saturday. Other than that: “You just sit there and wait this out.”

“It’s all you can do,” LaCour said. “There’s no cure. You try your best to hold it together while you go through this. Having been through hurricanes before, you prepare for the worst mentally and hope for the best.”

Barry is just the latest blow to America’s agricultural economy. Incessant rains have washed out farms and flooded rural Midwestern towns. The deluge hampered the flow of farm products and hindered plantings. The weather woes come as crop prices have stayed depressed amid the U.S.-China trade war and hefty supply gluts.

Climate change has brought increased risks to farming from floods, storms, drought and heat. While America’s crop belt suffered from a deluge, wheat growers in parts of Europe have had to deal with scorching temperatures and dry conditions.

Here’s a look at some of Barry’s agriculture impact:

Grains

Cargill, America’s largest closely held company, said it shuttered its Louisiana export grain elevators on Thursday in anticipation of the storm. Rival Archer-Daniels-Midland Co. said it shut grain elevators and port operations in New Orleans Friday to prepare for the storm. Bunge Ltd. said it closed an export terminal and crush plant in Destrehan, Louisiana.

The Gulf of Mexico is a key region for U.S. agriculture exports, with almost half of this year’s grain shipments loading along the Mississippi River, government inspections data show. The state is also home to corn, sorghum and soybean crops.

In Louisiana, local prices signal the market is positioning for supply disruptions from the storm as shipping is grinding to a halt along the southern reaches of the Mississippi River. The soybean basis in the Gulf jumped 5.3% on Thursday, the steepest climb since June 7, to 50 cents a bushel, U.S. Department of Agriculture data show. The figure measures the amount above futures that buyers are willing to pay.

Cotton

Cotton plants in the southern portions of the Mississippi Delta region could be badly affected by the storm, according to Don Keeney, a senior agricultural meteorologist with Maxar in Gaithersburg, Maryland. Sugar cane is also likely to get serious damage from flooding, while corn may face “a little bit of wind damage,” he said.

The impact on futures markets could be limited, though. There’s plenty of U.S. cotton in inventory that can help cushion the blow of supply loss.

Rice

Arkansas, Louisiana and Mississippi -- each of which are in Barry’s path -- accounted for most of the rice grown in the U.S. last year. In top-producer Arkansas, heavy rain expected to arrive by Sunday could disrupt crop development, Jarrod Hardke, an agronomist at the University of Arkansas, said. Rice crops already were struggling after rains delayed spring plantings and then were hit with high temperatures.

Shrimping

The storm is likely to disrupt fresh catches of shrimp for a day or more, C. David Veal, executive director of the American Shrimp Processors Association in Biloxi, Mississippi, said on Friday. The association represents about 75% of fresh shrimp packers in the Gulf. As much as 120 million pounds (54,000 metric tons) of shrimp are caught each year off the U.S. Gulf.

“It certainly causes dislocation, and preparation always takes a day out of business because employees have to prepare, too,” Veal said by telephone. “Then, there’s the constant worry if freezers go out.”

Sugar

Heavy rains puts Louisiana’s sugar cane crops at risk, according to Herman Waguespack Jr., research director for the American Sugar Cane League in Thibodaux, Louisiana. The state produces 1.4 million tons of raw sugar, according to group’s website. Cane was planted on 440,000 acres as of 2017.

“If Barry can come in and be gone, we will be much better off,” he said.

--With assistance from Kevin Varley, Mario Parker and Denitsa Tsekova.

To contact the reporters on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net;Michael Hirtzer in Chicago at mhirtzer@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Millie Munshi

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