Damages from Hurricane Ian could top $45B with Florida landfall

Sep. 28, 2022 4:36 AM ETPepsiCo, Inc. (PEP), KO, JO1:COM, MOS, DIS, SEAS, JBLU, SAVE, AAL, DUK, NEEBy: Yoel Minkoff, SA News Editor82 Comments

Florida Residents Prepare For Hurricane Ian

Joe Raedle/Getty Images News

Florida is bracing for the arrival of Hurricane Ian after the intensifying storm knocked out Cuba's entire electric grid early on Tuesday. About 2.5M people along the U.S. Gulf coast have been urged to evacuate, with forecasts calling for winds of up to 130 mph and a 6-foot storm surge, potentially leaving some places uninhabitable for weeks or even months. While estimates are being revised by the hour, Ian will likely crash ashore on Wednesday evening south of Tampa Bay - somewhere between Sarasota and Naples - as a potentially deadly Category 4 hurricane.

Catastrophic damage: Economic losses in the area could exceed $45B if the current forecast comes to pass, ranking Ian as the eighth-costliest U.S. hurricane. It could also exacerbate food inflation if the storm takes a direct hit on key orange-growing producers, so keep an eye on Orange Juice Futures (JO1:COM) and the nation's largest distributors - Tropicana (NASDAQ:PEP) and Minute Maid (NYSE:KO). Fertilizer-manufacturing zones are also at risk, like Mosaic's (NYSE:MOS) phosphate facilities east of Tampa, which could further drive up the cost of growing food.

"I do have concerns about complacency," said U.S. Federal Emergency Management Agency chief Deanne Criswell. "We're talking about impacts in a part of Florida that hasn't seen a major direct impact in nearly 100 years. There's also parts of Florida where there's a lot of new residents."

Outlook: Walt Disney World (NYSE:DIS) said its theme parks would close Wednesday and Thursday, while SeaWorld Entertainment (NYSE:SEAS) shuttered Busch Gardens in Tampa through Sept. 29. Commercial airlines also reported more than 2,000 storm-related flight cancellations, heavily impacting carriers like JetBlue (NASDAQ:JBLU), Spirit (NYSE:SAVE) and American Airlines (NASDAQ:AAL). On the energy front, personnel have been evacuated from 14 Gulf Coast rigs, halting about 11% of the region's oil output. Meanwhile, Duke Energy (NYSE:DUK), which supplies electricity to 1.9M customers in the state, warned of widespread power outages, as well as Florida Power & Light Co., a subsidiary of NextEra Energy (NYSE:NEE).

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