Louisiana agricultural producers are highly dependent on the world market to sell their commodities, and a new export facility at the Port of Baton Rouge could increase the amount of agricultural products shipped abroad.
“For many of our major row crop commodities, exports are likely a major destination,” said LSU AgCenter economist Kurt Guidry. “We don’t have a lot of value-added processing for things like corn, grain sorghum, wheat and soybeans.
“So, given our geographic location and given the lack of alternative markets for many of our commodities, much of what we grow of those feed grains and oilseeds likely is destined for the export market.”
According to USDA figures, Louisiana had $1.6 billion worth of agricultural exports in 2011. Sugar was the top export product from Louisiana, at $304 million in 2011. Rice was second at $264 million, followed by cotton at $242 million.
The International Trade Association shows China, Japan and Mexico as the top three buyers of Louisiana agricultural products.
The ITA statistics list the total exports shipped out of Louisiana in 2012 at $19.6 billion. That number is higher than the USDA figures because it includes all agricultural products -- grown in Louisiana and grown in other states -- shipped out of Louisiana ports, Guidry said.
According to the U.S. Department of Commerce, Louisiana was one of 34 states to set record export levels in the first half of last year.
Louisiana’s proximity to the Gulf of Mexico and the Mississippi River make it an ideal export terminus, Guidry said. “The Mississippi River and the ports have a big impact in terms of moving grain into the world market.”
The after-effects of Hurricane Katrina and the shut-down of the Port of New Orleans demonstrated the importance of the Mississippi River corridor.
The new tenant at the Port of Baton Rouge, Louis Dreyfus Commodities, is making $100 million in improvements to the grain-loading facility there. The end result should be increased amounts of grain loaded onto barges and ships.
For an in-depth story on Dreyfus’ takeover of the facility, see here.
The port anticipates the facilities should be ready to start receiving grain this year, and a possible benefit could be better prices for farmers who sell their grain there, Guidry said. “The hope is it will be able to translate into higher prices because of the increased volume.”
A new company in the area should bring more competition and better prices throughout south Louisiana.
Low water and siltation threaten the Mississippi River’s ability to carry barge traffic. Last year, the port at Lake Providence had to close because low water levels hampered access.
“Proper maintenance of the river is essential,” Guidry said. “Last year there was a combination of a lack of funds to maintain the river, plus the fact we were going through the drought.”
Other port facilities also have a role in Louisiana’s exports, including the Port of Lake Charles where large amounts of rice are exported.