Business Beat: August 24, 2011

Aug 24, 2011

This week: corn production is way down this year, and it’s affecting the prices of other commodities, too. Plus, an update on the special session of the state legislature, and the state’s credit rating.

Missouri’s corn crops were hit hard this year by flooding, and despite planting more acres this year, farmers will see a dent in their yield. Across the corn belt, weather damage caused the USDA to predict lower yields than previously expected.  This news sent grain prices soaring even higher.  That’s good for those in states like Iowa and Nebraska where decent yields are predicted. Harvest Public Media’s Kathleen Masterson visited a corn-farm near Des Moines, growing what investors seem to be treating like the new gold.

State Update

Missouri lawmakers will return to Jefferson City the day after Labor Day to begin a special session.  Governor Jay Nixon made it official earlier this week.  Eleven items have been included in the governor’s call. Most of them have to do with tax credits, including numerous tax incentives for amateur sporting events, data storage centers, and the Aerotropolis proposal for Lambert St. Louis International Airport.  GOP House Speaker Steven Tilley is happy overall with what the governor included in the call

“You know we sat down with Governor and said ‘here’s what we’ve agreed upon and we would ask you to call us in on these parameters.’ And with almost no exceptions he did that. My hope is we can get in there, we can do the people’s business and be out in about two weeks,” Tilley said.

Addressing natural disaster response will NOT be included in the call.  Governor Nixon and legislative leaders both say that more time is needed to assess the cost of tornados and floods that have hit Missouri this year.

Meantime, Governor Nixon’s office says the Standard & Poor’s credit-rating agency has reaffirmed Missouri’s AAA credit rating. That’s the same agency that downgraded the United States’ credit rating to AA plus earlier this month. The Governor’s office says the rating will help keep borrowing rates low for Missouri schools, local governments and other entities that borrow money for large projects.

Bigger Waterway, Bigger Business

Missouri Department of Transportation officials anticipate the Panama Canal Expansion Project will bring more shipping traffic to Missouri’s waterways. Freight development administrator Ernie Perry says there won’t be a sudden boost in river traffic, but the larger canal will make river shipping more feasible.

“This is going to make the central United States, the Gulf, the Mississippi River and the Missouri River more attractive as a place to land these shipments versus the West Coast or the East Coast. They can come right up the waterway. It’s the most efficient way to get here. And then get distributed out of Missouri through your Southeast Missouri ports or on up the Mississippi or even the Missouri towards Kansas City,” Perry said.

Perry says MODOT will likely receive private sector support to upgrade port facilities to accommodate container shipments. Most inland waterway ports only handle bulk cargo instead of containers. The widened Panama Canal is expected to open to traffic in 2014. It will double the waterway’s traffic.