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Closed ports backing up shipments of food, other products

NEW ORLEANS—The Port of New Orleans, one of the five busiest in the nation, is out of commission, and that threatens to create a mushrooming crisis for many U.S. industries.

Farmers in the Midwest depend on it to ship their wheat, corn, soybeans and other grains. The Mississippi River links to the Ohio, the Illinois and the Missouri rivers, and manufacturers from across the Midwest depend on vast fleets of inland river barges to carry chemicals, steel, rubber and other cargoes to world export through New Orleans.

Before Katrina, about 60 percent of the nation's exports of raw grains floated down the Mississippi, but Katrina brought the grain trade to a near halt. Grain elevator operators had been holding inventory for months because of low world prices. Now, as the approaching harvest season for corn and soybeans creates increased demand for empty storage silos, a grain-export crisis looms.

The Port of New Orleans has slowed from a bustle to a crawl as berths once reserved for giant cargo ships make way for floating hotels that will provide living quarters for about 1,000 people involved in port activities.

Port President and Chief Executive Officer Gary P. LaGrange hopes the port can be back to about 50 percent of normal operations within a month. "Six months from now, I really believe we'll be up to 100 percent," LaGrange said optimistically during an interview Wednesday at port offices overlooking the muddy Mississippi River.

For port users, who shipped more than 31 million tons of general cargo through New Orleans last year, six months may seem like an eternity.

Meanwhile, the lobby of the port's office building is a staging area for state police SWAT team officers.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, warned Wednesday that "while the devastation caused by Katrina in Louisiana is severe, initial reports indicate that the situation could be worse from the standpoint of resuming grain exports."

The U.S. Coast Guard this week reopened the river to barge traffic and ocean-going ships that draw less than 39 feet of water. River terminals normally operate 24 hours a day on three shifts, but for now the river is open to traffic only during the daytime.

To move Midwest grain supplies that are backing up, the National Grain and Feed Association is asking Louisiana parishes to let vessels on the Mississippi load grain at night even if they aren't allowed to move downstream until dawn.

The partial reopening of the Mississippi doesn't much help the largest grain exporters, such as Minnesota-based Cargill Inc. It uses giant vessels that draw 42 or 45 feet of water and must call at river terminals where barges offload grain directly onto them.

"The overriding issue remains that our grain export activities are at a standstill," said David Feider, a Cargill spokesman in Minneapolis.

Cargill has studied rail and truck options and determined that "the best option remains staying right where we are," he said.

A single barge load of grain is equivalent to 15 railcars or 60 tractor-trailer rigs. Soaring fuel costs make truck transport less attractive, and railcars are not available to take grain toward Great Lakes outlets such as the Port of Duluth, which would be an illogical route for southbound shipments.

A strong U.S. economy has left railroads with few spare locomotives to divert for grain shipments. Besides, railcars used to transport grains, called hopper cars, are allocated months in advance and there are few to spare.

"For the last three years we've been short (railcars), and this is probably the tightest we've ever seen the market. Before the hurricane, this was the tightest market ever," said Ed McKechnie, chief commercial officer for Watco Companies, owner of the grain-carrying Mississippi Southern Railroad and the Missouri & Oklahoma Railroad.

In North Dakota, where grains are shipped by rail to ports in Washington state, farmers fear that railroads might not deliver hopper cars because Katrina created needs in the Midwest.

"There is concern with railcar availability. The less options you have, the more it can impact your market," said Lance Gaebe, a policy adviser to North Dakota Gov. John Hoeven.

Back in New Orleans, an estimated 1.6 million large bags of coffee beans remain locked in port warehouses, but Port CEO LaGrange believes most of them can be salvaged. However, frozen poultry products destined for export are a total loss.

Bananas could move through neighboring ports, but University of Delaware maritime specialist James Corbett said Wednesday that as much as 20 percent of the refrigerated containers used to transport bananas are positioned at the hard-hit Port of Gulfport in Mississippi.

"This could affect the price of bananas and winter fruits into the Southeast region, and also in the Northeast region," he said.

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(Adams reported from New Orleans, Hall from Washington.)

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(c) 2005, Knight Ridder/Tribune Information Services.

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