BY julie speed
DBJ Contributing Writer

As the aftermath from the Sept. 11 tragedy unfolds, speculation about its impact on Mississippi Delta’s economy has become a big question mark.
“The unconscionable and cowardly attacks on America are affecting every aspect of our lives, from our heightened sense of awareness about travel to a renewed feeling of patriotism and national pride for our country,” says Governor Ronnie Musgrove. “Here in Mississippi, these attacks will obviously change how we do business. We will all be watching the economy closely during this time, and hopefully we will see America demonstrate its strength by keeping its economy as strong as possible.”
Musgrove says the state is looking at the call-up of National Guard and Reserve troops, “which will affect employers around the state. The Delta could feel an impact from this.”
“Obviously, oil is an issue,” says Chester Quarles, Ph.D., professor of political science and criminal justice at the University of Mississippi. “We need to reopen all our oil fields in the west and triple them up in Alaska just to meet our own country’s needs rather than import it. For now, if a farmer knows his fuel needs for the next few months, he better take care of it now. If this escalates, availability will definitely be impeded.”
Win Roulhac, an investment representative with Edward Jones Investments in Greenville, says investors are reviewing their portfolios and making sure they’re not weighted to a particular sector.
“Investors should maybe be 20% weighted in growth right now instead of 40% ,” Roulhac says. “If they have a plan, they need to stick to it and take emotion out of it and review the plan regularly. We need to remember we’ve had crises before and we’ve come out of those.”
After Nixon resigned, the stock market dropped 15.5% in three weeks. Six months later, it recovered 12.5%. Four days after Pearl Harbor, the stock market was down 6.5% and bottomed in early May. After that, there was a four-year bull market run, Roulhac says.
“We’re already in an economic slowdown and the crisis could speed up the cycle, which could be a positive from the standpoint of having a plunge versus a slow methodical drop,” he says. “With that, maybe the economy will be able to turn around in the not too distant future.”
Jimmy Clayton, CEO of Planter’s Bank in Indianola, says business people in the Mississippi Delta need as much liquidity, or access to liquidity, as possible.
“That’s a hard thing for some people to have, especially in the agricultural business or catfish business and any business that requires a lot of capital,” Clayton says. “People will want to be extremely careful about expansions. On the other hand, people with fixed assets and mortgages should look at this as an opportunity to consolidate debts and refinance with lower interest rates. That may provide opportunities for some businesses.” Indianola-based Delta Pride, the world’s largest catfish processing plant and Sunflower County’s largest employer, providing employment for more than 2,000 people in the Mississippi Delta, is in the middle of a multi-million dollar expansion, financed by a $9.75 million USDA Rural Development loan, that should be completed next spring.
Bill Allen, president and CEO of Delta Pride says the expansion would continue.
“As an industry, one of our biggest challenges within the last six months has been overcoming the influx of Vietnamese imported fish being sold against our catfish,” Allen says. “I’m hopeful that the patriotic sense of this tragedy will result in Americans buying American products.”
Other than disruption in supply routes and the immediate threat of higher fuel prices, business is back to normal, Allen says.
“The tragedy hasn’t been good for export business, but that’s a small part of our business anyway,” he says.
Mike Sturdivant, Jr., a Glendora farmer and member of the Memphis branch of the Federal Reserve Bank of St. Louis, says the Federal Reserve dropped interest rates another half point after the tragedy because of concern about consumer confidence and spending.
“Anytime you have events like this, there are negative reactions,” he says. “People decide not to go out and spend money like they used to, so consumer spending is going to be hurt.”
Sturdivant says it’s difficult to tell what changes will occur because it depends on how President Bush resolves the issue.
“With the interest rate cuts, we’re doing everything possible in the short term to spur the economy but there’s going to be a lot of money diverted to take care of issues like rebuilding, helping the airlines and other industries, and increasing security,” he says. “I’m not sure where the farmer is going to wind up in the hierarchy of things. The government is going to look for ways to cut costs and farming may be one that gets hurt in this.”
Clayton says the Federal Reserve would make sure there’s plenty of liquidity in the banking system.
“But that’s different than having liquidity flow down to individual businesses, so if the Fed has a chance to create liquidity, that’s a good thing in a time of uncertainty,” he says. “It’s easier says than done in the Delta, though. I’m sure that when the economy comes back there’ll be more inflation, but they can’t take the risk of not propping things up now. However, I don’t think there’s a danger of them letting it get out of hand.” DBJ