Corn Commentary

Oil Spill Could Slow Corn Exports

As the battle to contain the oil spill in the Gulf of Mexico are now likely to stretch into the fall, concerns are being raised that the situation could delay grain exports, according to Iowa State University grain markets specialist Chad Hart.

“If the oil slick got into what is called the Southwest Passage – which is a canal that goes from New Orleans out to the Gulf of Mexico – we would be looking at severe delays in getting our corn and soybeans shipped overseas,” said Hart.

Ships can sail through the oily water, but would need to be cleaned when they enter port. “When a ship comes into port, it would have to be cleaned if it went through the oil slick,” said Hart. “And then when it goes to their destination, it would have to be cleaned again when it arrives.” The result would be much slower movement of grain out of the Midwest to foreign markets.

There are some reports coming out of the Port of New Orleans that indicate vessels that would normally dock in New Orleans are diverting to other Gulf Coast ports, but authorities say only one of 600 ships that have come in since the spill had to be cleaned.

The oil spill has been moving mainly to the east, so there has been little impact on the shipping lanes, which lay to the west of the slick. But Hart says there could be an impact on grain prices if the slick does start to affect the shipping lanes.