USDA Takes Action To Ease Grain Transportation

Monday, September 26, 2005
Agriculture Secretary Mike Johanns said USDA is taking additional steps to further reduce stress on the grain transportation system caused by Hurricane Katrina. The actions include assisting with the movement of barges of damaged corn from New Orleans; providing incentives for alternative grain storage; encouraging alternative shipping patterns to relieve pressure; and allowing producers to store USDA-owned corn on the farm with the option to purchase.

"These actions, in conjunction with the tremendous work being performed by the U.S. Army Corp of Engineers, will help the transportation system return to normal as quickly as possible," said Johanns. "The drought is contributing to the stress along the Mississippi River by decreasing the flow, so we are encouraging alternative routes and means of transportation in addition to the steps we are taking to relieve the pressure on farmers and related businesses."

USDA is providing a temporary incentive to assist immediate movement of some 140 barges of damaged corn (over 7 million bushels) out of New Orleans to up-river locations. Once unloaded, the empty barges will continue up the river to load and begin moving new-crop commodities. In addition, to help producers deliver and sell crops in the absence of barge transportation caused by the hurricane, USDA also will pay incentives for alternative storage of up to 50 million bushels of grain. These actions will further ease pressure on producers to market commodities under adverse conditions.

To reduce stress on the Central Gulf transportation and handling system, USDA will provide a transportation differential to cover the costs of moving grain to other transportation modes and handling locations.

To further alleviate grain movement into the Mississippi River, USDA will allow producers forfeiting commodities to USDA the opportunity to buy back the grain when their farm-stored loan matures at the end of Sept. and Oct. This opportunity to purchase is offered on a state-by-state basis and will be available for 60 days at the posted county price. These producers typically would be required to immediately move the forfeited commodity to commercial warehouses. This action also reduces the pressure on commercial storage availability.

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