NamedPipe

An article in the Register today has people asking about whether to rebuild New Orleans and how we should do it. I know you’re thinking that you’re tired of all this talk of New Orleans in Iowa.

I mean, who cares?

Well the folks at Stratfor do. Read this if you want to understand the importance of New Orleans to the United States.

The ports of South Louisiana and New Orleans, which run north and south of the city, are as important today as at any point during the history of the republic. On its own merit, the Port of South Louisiana is the largest port in the United States by tonnage and the fifth-largest in the world. It exports more than 52 million tons a year, of which more than half are agricultural products — corn, soybeans and so on. A larger proportion of U.S. agriculture flows out of the port. Almost as much cargo, nearly 57 million tons, comes in through the port — including not only crude oil, but chemicals and fertilizers, coal, concrete and so on.

A simple way to think about the New Orleans port complex is that it is where the bulk commodities of agriculture go out to the world and the bulk commodities of industrialism come in. The commodity chain of the global food industry starts here, as does that of American industrialism. If these facilities are gone, more than the price of goods shifts: The very physical structure of the global economy would have to be reshaped. Consider the impact to the U.S. auto industry if steel doesn’t come up the river, or the effect on global food supplies if U.S. corn and soybeans don’t get to the markets.

And if you still don’t get it let me give you an example.

Iowa currently exports about $3.7 billion in crops each year to overseas locations (See USDA Foreign Agricultural Service data for past five years). It’s hard to find data on how much of that goes down the Mississippi, but it looks like only a small percent (around 1%) goes to Canada. So if we assume 99% of that $3.7 billion floats down the Mississippi during the fall, that would be about $1200 per Iowa resident.

And that’s just the export portion. There are raw materials that come in via the Mississippi that are surely used in Iowa manufacturing.

So ask yourself, could you lose $1200 this year? How about every year? Think about those questions when someone asks whether we should rebuild New Orleans.