Sandy takes toll on beef market
Hurricane Sandy wreaked havoc on the East Coast last week, closing U.S. stock trading for two days, finally reopening Wednesday under generator power.
The last time the New York Stock Exchange was closed for weather was in 1985 during Hurricane Gloria, and it is the first time since an 1888 blizzard that the exchange has been closed for two consecutive days because of weather.
While CME Group’s New York trading floor was closed, electronic markets were functioning.
Crude oil fell 80 cents to $85.48 in electronic trading during the storm.
Analysts say the hurricane could have a delayed impact on cattle-futures markets. Retailers may not be prepared to place orders for beef, and shipments may face delays, resulting in a backlog of supplies.
“It will take a few days to sort out the effects of the disruption but chances are that the storm will have some short term impact on meat protein demand. This is particularly the case at the foodservice level. Lost foot traffic and sales will be hard to make up, especially in the current economic environment. As for retailers, the storm likely represents a shift in sales rather than lost sales altogether. Consumers will probably deplete home refrigerated stocks and some product may be thrown away. In any case, following such disasters, there is a rush to the retail store to replenish home stocks, resulting in higher sales in the following weeks,” CME reported.
The monster storm came at the beginning of an important week for the U.S.—the last full week before Election Day, along with the release of monthly jobs data. Some big companies, such as Pfizer Inc. and Thomson Reuters, chose to postpone quarterly earnings reports following the storm.
While physical damage assessments are far from over, the general consensus from the ag sector in the area has been good. Dairy farm reports from Vermont, Pennsylvania, New York and Virginia indicate there was no major damage done.
Processors in the areas came through Hurricane Sandy unscathed, for the most part, with few in the area closing plants at the beginning of the week to ride out the storm. While shipping will continue to remain a challenge and beef sales in the hard hit areas are expected to be slow for a while, the major processors are running business as usual.
Southern Haiti did not fare as well on the ag end. A Ministry of Agriculture official in southern Haiti says that Hurricane Sandy destroyed 70 percent of the crops in his region and caused widespread deaths of livestock.
Farm Service Agency (FSA) Administrator Juan M. Garcia urged farmers and ranchers affected by Hurricane Sandy to keep thorough records of all losses, including livestock death losses, as well as expenses for such things as feed purchases and extraordinary costs because of lost supplies and or increased transportation costs.
FSA recommends that owners and producers record all pertinent information of natural disaster consequences, including: • Documentation of the number and kind of livestock that have died, supplemented if possible by photographs or video records of ownership and losses; • Dates of death supported by birth recordings or purchase receipts; • Costs of transporting livestock to safer grounds or to move animals to new pastures; • Feed purchases if supplies or grazing pastures are destroyed; • Crop records, including seed and fertilizer purchases, planting and production records;
• Pictures of on-farm storage facilities that were destroyed by wind or flood waters; and
• Evidence of damaged farm land.
Producers with damaged farmland should contact their local FSA office. The Emergency Conservation Program (ECP) may be able to assist producers who need to repair farmland or remove debris due to Hurricane Sandy. FSA currently has $15.5 million available for producers in counties that received a Major Disaster declaration pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Producers located in counties that have not received a Major Disaster declaration should visit their local FSA office for information on ECP if funding becomes available in the future.
USDA’s Risk Management Agency reminds producers faced with questions on prevented planting, replant, or crop losses to contact their crop insurance agent for more information. Producers who need emergency credit may receive assistance through the Emergency Loan Program if they need assistance recovering from production and physical losses due to natural disasters. Producers are eligible for these loans as soon as their county is declared a Presidential or Secretarial disaster county.
Agriculture Secretary Tom Vilsack also reminds producers that the department’s authority to operate the five disaster assistance programs authorized by the 2008 Farm Bill expired on Sept. 30, 2011. This includes SURE; the Livestock Indemnity Program; the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish; the Livestock Forage Disaster Program; and the Tree Assistance Program. Production losses due to disasters occurring after Sept. 30, 2011, are not eligible for disaster program coverage.
To deliver assistance to those who need it most, Vilsack effectively reduced the interest rate for Emergency Loans in July 2012, while streamlining the Secretarial disaster designations process, resulting in a 40 percent reduction in processing time for most counties affected by disasters. Among other administrative actions, USDA has also worked with crop insurance companies to provide more flexibility to farmers.
Crops insured by federal crop insurance or by the Non-insured Disaster Assistance Program are covered when floodwaters have rendered them valueless. USDA encourages all farmers and ranchers to contact their crop insurance companies and local USDA Farm Service Agency Service Centers, as applicable, to report damages to crops or livestock loss. More information about federal crop insurance may be found at www.rma.usda. gov. — Traci Eatherton, WLJ Editor