The eye of Katrina will be felt nationwide.

This NASA microwave image shows the heavy precipitation (blue) into major East Coast vegetable growing regions.

KATRINA’S WRATH: Most of the nation is still waking up to the massive devastation from Hurricane Katrina. It’s almost unimaginable that the city of New Orleans is no more. The blow that Katrina dealt the Gulf Coast region will also be felt from Miami to Vancouver, from Boston to San Diego. As the muddy waters recede back into the Gulf, we are just beginning to see how produce markets may be affected.

• Produce Markets: The break up of Katrina as it hit land sent heavy rains into many current growing regions of East Coast row crop vegetables like Bell Peppers, Cucumbers, Eggplant, Green Beans, Squash and Tomatoes. Those heavy rains were felt as far north as the Ohio Valley and into the Northeast. These “backyard” growing regions generally supply East Coast demand through September, however, with these heavy rains, we don’t know yet if some of these growers won’t just call it quits for the season. Some West Coast shippers saw in increase in East Coast demand of about 10% in the first few days following the hurricane. Some of this may have just been East Coast buyers re-establishing relationship with growers and shippers as a back-up.
• Demand: This nation has never been through something as horrific as this catastrophe. There may have been some supplies knocked out, but the flip side of the market is always demand. We literally have tens of thousands of people who are more concerned with water and survival than they are in getting lettuce and tomatoes for tacos tonight. Even with lower supplies available, sending demand to West Coast suppliers, with a lack of national demand, we don’t know how that will have an impact overall with produce pricing. We have just never seen anything like it before.
• Transportation: Many trucks that are normally available for produce shipping are now being contracted by FEMA to move life saving food, water and supplies into the Gulf Coast region. Already truck supplies were extremely tight and transportation costs were already at record levels. Those transportation costs will most likely go even higher. Also, getting produce shipment from the West to the Southeast will take a little longer. The main interstate route is gone so truckers will have to take I-40 through Tennessee and then down to the southeast. The other aspect will be fuel costs, which are already at record levels. The Gulf region accounts for about 40% of the refinery capacity for the United States. How soon these refineries can get back on line with receiving raw crude oil and refining, is yet to be determined.
• Imports: Gulfport handles about 25% of the banana imports to the United States. The port was severely damaged. Just before Katrina hit, one banana ship had just been unloaded onto trucks and the fruit was on its way out, just missing the storm. Another ship was immediately diverted to other ports, which is what is happening with all other shipments. How fast those other ports can absorb the new traffic is yet to be seen. These other ports are already scheduled and packed with incoming Christmas inventory. The additional transportation costs associated with these changes could impact import prices. Air shipments into Miami International were also delayed, which impacts Peruvian Asparagus, berries and baby vegetables from Central and South America.
• Fall/Winter Vegetables: Dade County in South Florida is the single largest growing region of fall and winter vegetables for the nation. Before Katrina slammed into the Gulf Coast, it sideswiped this Homestead growing region. Growers there had already laser leveled their fields, furrowed, placed irrigation and fumigated for the first vegetable plantings around September 15. Over a foot of rain dumped onto these acres, destroying all of that field prep. Now growers will wait for the soil to dry to re-laser level the fields, furrow, replace irrigation and fumigate. Whenever you disrupt planting cycles, you also disrupt the harvest schedules. This will push back harvest closer to Thanksgiving, which could impact holiday prices, similar to last year.