FOR IMMEDIATE RELEASE
November 2, 2005

Goodlatte Praises USDA for Getting the Barges Moving
Secretary Johanns to Announce$7.6 Million Allocation to Increase Efforts to Return Barges to Circulation

WASHINGTON, D.C. – Later today, the U.S. Department of Agriculture (USDA) will announce plans to allocate $7.6 million to increase efforts to get 175 barges back in circulation following the recent hurricanes. Last week in a Committee hearing to review the current state of transportation situation on the Mississippi River, Chairman Bob Goodlatte urged USDA to make additional resources available to clear the barges of storm damaged corn and get the barges back in circulation as quickly as possible.

In addition to disrupted barge operations and port facilities along the Mississippi following Hurricane Katrina, barges filled with corn were contaminated with rain and storm water. Since that time, the barges have remained out of circulation, loaded down with the damaged corn. With the 2005 harvest well underway, producers are feeling the effects of the decreased number of barges available to move the corn including higher freight prices, decreased grain prices and an increase in loan deficiency payments (LDPs).

“I applaud Secretary Johanns for ramping up efforts to remedy the situation on the Mississippi River and provide relief to our producers. These increased efforts will help in disposing the damaged corn and getting the barges back into circulation to prevent further strain on U.S. grain producers. Additionally, moving the barges back into circulation will reduce the government’s costs associated with increased loan deficiency payments. This is a win-win for our producers and taxpayers across the country,” said Chairman Bob Goodlatte.

LDPs are made when market prices dip below loan rates. Producers often take marketing loans from USDA in advance of marketing their crop to ensure cash flow. Often producers elect to forgo the loan and instead choose to take the LDP issued by USDA. The LDP is the difference between the loan rate and the local (market) price. Since local corn cash prices are below the loan rate, producers are opting for the LDP.

“The effects of Hurricanes Katrina and Rita are still being felt in the Gulf states and continue to resonate up the Mississippi River into the Plains and Midwestern states. In fact, 33 states rely on the Mississippi River and its tributaries to move goods to the port facilities for export. This means that producers in more than half of the U.S. are feeling the impact of the hurricanes and their residual effects. I am pleased that USDA is ramping up their efforts to help our producers as they harvest this year’s crop,” said Chairman Goodlatte.

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