Grocers Cautiously Monitoring Supplies
Wednesday, September 7, 2005
As the effects of Hurricane Katrina ripple throughout the economy, shoppers' grocery bills are expected to edge upward in the coming weeks as food companies grapple with soaring fuel costs, damaged facilities and choked-off transportation routes.
Commodities such as coffee, bananas, chicken and seafood all have been affected by the storm that ravaged the Gulf Coast last week.
In Mississippi, which produces about 10 percent of the country's broiler chickens, 10 of the 14 chicken slaughtering plants were without electricity and water, and hundreds of "grow-out houses," where chickens mature, were damaged, according to Richard L. Lobb, a spokesman for the National Chicken Council. However, Lobb said that power and water were being restored and that the plants "may be back in operation by this week."
The biggest problem, he said, "is one we share with other members of the farm economy -- a lack of fuel" for trucks and generators. "Even if a farm or plant is undamaged, it needs power for ventilation, feed and water," he said. "They're using generators, but they're running low on diesel fuel.
As for the impact on chicken prices, Lobb told the weekly Food Chemical News, "There clearly will be an impact nationwide."
Chiquita Brands International said 25 percent of its banana imports to the United States last year came through its facilities in Gulfport, Miss., which are now too damaged to receive shipments. The fruit will have to be rerouted through ports in Texas and Florida.
Louisiana oysters also will be virtually impossible to find. The storm decimated the $2.6 billion Louisiana seafood industry, destroying oyster beds as well as the boats, docks, warehouses and processing plants that ship the delicacy.
Although Louisiana supplied only 10 percent of the country's shrimp (88 percent of the shrimp Americans eat is imported), it produced 40 percent of the country's oysters.
"Louisiana is the home state for oysters in this country," and other areas won't make up the loss, John Connelly, president of the National Fisheries Institute, said in an interview last week. The oyster beds will need to be reseeded and "it will take a lot of time, effort and government help to get the infrastructure back up," he said.
For coffee drinkers, there was mixed news. About half of the Folger's brand comes out of New Orleans. Procter & Gamble said that its facility there was closed and that it was unclear when it could reopen. In addition, other companies were struggling to remove hundreds of thousands of bags of coffee stored in warehouses in New Orleans.
However, Starbucks, with roasting plants in Pennsylvania, Nevada and Washington state, said in a press release that it "did not hold any coffee in New Orleans and our coffee supply is not affected by the hurricane."
Area supermarket chains are nervously awaiting word from their suppliers before making any predictions about shortages or price increases.