Ag commissioner: People, businesses should work to be resilient
FRANKLIN -- We hear the word "resiliency" a lot nowadays, in discussions of urban planning, infrastructure and economics, usually at a governmental level.
Louisiana Agriculture Commissioner Mike Strain told a St. Mary Chamber Business Luncheon audience Wednesday that people and individual businesses should also find ways cope with and bounce back from the inevitable tough times.
"We've got to think about what each us as individuals can do to be resilient," Strain said.
With the concept of resilience comes the idea that overall success may depend on how prepared we are to handle bad times, or at least uncertain ones. The world, the nation and Louisiana have experienced recent firsthand examples:
After the hurricanes of 2005-2008, home generator usage skyrocketed, Strain said. When Hurricane Ida struck, many were prepared with a five-day supply of propane to fuel their generators.
But Ida knocked out power for up to a month in portions of Terrebonne and Lafourche.
"What do you do on day six?" Strain asked.
Ida was especially hard on southeast Louisiana, home to 25% of the nation's petroleum refinery capacity. Nine were put out of action by Ida.
Exxon's refinery in Baton Rouge shouldn’t' have been knocked out, Strain said, because electricity was available there. But the refinery couldn't operate because it needs nitrogen that comes from a plant that was without power.
Louisiana has five of the nation's 14 most active ports, and Ida created a need for barges in a hurry. But the storm coincided with the harvest, and 65% of the wheat harvested in the United States comes through Louisiana, Strain said.
Petroleum prices reached $80 per barrel this week, their highest level since 2014. That's the level at which conventional wisdom says offshore energy production becomes a break-even proposition.
But Strain warned about the impact on consumers and especially on farmers, from higher fuel prices. The real price to watch, he said, is natural gas, which has chugged along near $3 per thousand cubic feet for most of a decade and is suddenly approaching $6 in North America. The price is up fivefold in Europe and parts of Asia.
Fertilizer is made from natural gas, Strain said, so farmers are facing cost increases there as well as in diesel fuel.
Strain had some good news, too. Progress on COVID-19 vaccines continues, and the world's first malaria vaccine was rolled out this week, promising to fight a disease that kills thousands of people each year.
In Louisiana, state officials said this week they've found a potential $1 billion budget surplus. But Strain says the law requires $350 million to be set aside for revenue stabilization, $165 million for the rainy day fund and $65 million for accrued liability.
That leaves $425-$450 million. Strain cautioned that recent influx of federal money won’t keep flowing forever.
Also at the Wednesday Business Luncheon, Administrative Assistant of the Month recognition went to Arc of St. Mary/Center of Hope's Cheryl Doiron.
The Business of the Month is The Lamplighter Coffee House and Bistro, owned by Dr. Gary and Diane Wiltz.