Despite Katrina, cotton and sugarcane production should rise

The Agriculture Department said Monday that the cotton crop should approach records and sugarcane production should surpass last year’s crop even with flattened fields of Mississippi cotton and Louisiana sugarcane.

It’s too early to determine the hurricane’s ripple effect on U.S. agriculture, which depends heavily on foreign sales of crops, many of which are shipped for export down the Mississippi River through Gulf Coast ports and waterways ravaged by Katrina.

The river and the key agricultural port, the Port of New Orleans, were operating Monday but at limited capacity.

“I don’t want to give you the wrong impression — it’s not like it was before the storm,” said Chris Bonura, spokesman for the port. “But we’re starting to see the first steps of getting back to commercial cargo.”

Steel coil was being loaded Monday onto barges destined for an Alabama auto manufacturer. The port expects to handle its first container ship on Wednesday, Bonura said.

Harvest of corn and soybeans, the main crops shipped through New Orleans, won’t be fully under way for a couple of weeks.

“When the Midwest harvest gets into full swing and whether they’ll be able to handle grain shipments then, that’s going to be the true test,” said Terry Francl, economist for Farm Bureau, the nation’s largest general farm organization.

Port closures have had short-term effects on grain markets, but price and demand should have greater impact over the long term, said Jerry Gidel, an analyst at North America Risk Management Services in Chicago.

“I don’t know that it’s going to materially affect long-term exports of corn and soybeans,” Gidel said.

In its monthly crop report, the Agriculture Department raised the forecasts for cotton, rice, soybeans and corn over last month’s estimates. And though farmers are expected to grow more sugarcane than in 2004, the department lowered the production forecast from last month.

Katrina’s 140-mph winds battered cotton in Mississippi, which is expected to harvest 10,000 fewer acres of cotton this year. However, most cotton fields are in western parts of the state and escaped the hurricane’s full brunt.

“It could have been more severe,” said Troy Joshua, a cotton analyst for the Agriculture Department. “It is severe to a farmer. It is when it hits your crop.”

Nationwide, cotton production is forecast at 22.3 million 480-pound bales, up 5 percent from last month’s forecast but down 4 percent from last year’s record production. If the trend continues, this year’s crop would be the second-best on record, the department said.

Overall sugar production is expected to drop because of hot, dry weather in Minnesota, which leads the nation in sugar beets, and in Nebraska. The department said sugar production should drop 27,000 tons to 7.96 million tons.

The department is still assessing Katrina’s damage to chicken production in the Gulf region but said the short-term impact should be limited.

Drought stretching from Texas to the Great Lakes persisted or worsened in August, the department said. In addition, the department cautioned of the growing threat of wildfires in the Northwest.

Also in the crop report:

—The forecast for corn production rose 289 million bushels to 10.64 billion bushels, down from last year’s 11.8 billion bushels. Prices should average $1.70 to $2.10, down 10 cents from last month. Last year’s average was $2.06.

—Soybean production should be 2.856 billion bushels, up 65 million bushels from last month but down from last year’s 3.14 billion bushels. Prices should be $5.15 to $6.05 a bushel compared with $5.50 to $6.50 last month and $5.75 last year.

—Wheat production should be 2.167 billion bushels, unchanged from last month’s estimate and up from last year’s 2.158 billion bushels. Prices should average $3 to $3.40 a bushel, up from last month’s $2.85 to $3.35. Last year’s average was $3.40.

—Rice growers are expected to harvest 228.3 million hundredweight, down from last year’s 230.8 million hundredweight. Prices were unchanged from last month at $7.25 to $7.55 per hundredweight. Last year’s average was $7.33.

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On the Net:

Agriculture Department crop reports:

http://www.usda.gov/oce/waob/wasde/wasde.htm

http://www.usda.gov/nass/pubs/pubs.htm