Just when you thought it was safe...

To ship from NOLA, this happens.

The biggest grain-shipping port in the U.S. may be disrupted by the spread of the BP Plc oil spill in the Gulf of Mexico, threatening to depress domestic prices by encouraging importers to buy from South America.

More than half of the grain inspected for export from the U.S., the world’s largest grower of corn and soybeans, is shipped from the mouth of the Mississippi River, according to the Port of New Orleans. Traffic has yet to be restricted through the main deepwater channel, the Southwest Pass, used by ships carrying commodities such as oil, coal and grain.

BP and Transocean Ltd. are struggling to cap a damaged undersea well leaking 5,000 barrels of crude a day since the Deepwater Horizon drilling rig exploded April 20. The edge of the spill began washing ashore in Louisiana late yesterday and may reach Florida’s coast early next week.

“As long as the main Southwest Pass remains open, it is unlikely to have too much impact” on grain prices, said Anne Frick, a vice president of research for Prudential Bache Commodities LLC in New York. “If that is closed and exports are disrupted, it would probably be a bearish development for U.S. soybeans, soybean meal and corn.” [More]

My first thought is that all the locks and dams we can finagle from Congress won't help this type of problem. It's just that grain growers think they understand river problems and focus on them.  It would be helpful to see some comparative risk statistics as to how our export exposure problems rank.  Maybe off-shore rigs constitute a bigger risk event than slow locks. And this particular event looks to be a whopper.

Since an explosion almost two weeks ago on the Deepwater Horizon rig, a disaster scenario has emerged with hundreds of thousands of gallons of crude oil spewing unchecked into the Gulf and moving inexorably northward to the coast. The responsibility for the cleanup operation lies with the owners of the well, led by 65 percent shareholder, London-based oil company BP Plc.

BP said last week that it was spending $6 million a day on the clean up but admitted this figure would rise sharply when the slick hits land.

Neither the company or its 25 percent partner, explorer Anadarko Petroleum, have put an estimate on total costs, although BP CEO Tony Hayward told Reuters in an interview on Friday that he would pay all legitimate claims for damages. [More]

Too much of our policy effort center on issues we like, and which ones provide off-season farmer entertainment - farmers to DC, barge rides - as opposed to market risks that have much greater potential to wrench prices unexpectedly.