Watching the oil slick with The J.M. Smucker Co. __»

June 25, 2010

Stark reminders of the reach of the Deepwater Horizon oil spill continue to surface in the filings, sometimes in unlikely places.

The most recent: The J.M. Smucker Co. (SJM) — purveyor of jellies, Crisco, and Jif peanut butter — warned in the annual report it filed yesterday that the disaster could interfere with its Folgers coffee business. That’s because it brings “[g]reen coffee and other raw materials used in the Company’s coffee businesses” through the Port of New Orleans.

“As of April 30, 2010, the oil spill had not been contained and could disrupt shipping traffic in and out of the Port of New Orleans and other ports. Such a disruption could increase the Company’s transportation-related costs, which could adversely affect its results of operations.”

Needless to say, the spill still hasn’t been contained as of June 25. Of course, risk factors are infamous for being written so broadly as to cover just about every eventuality, however unlikely or prosaic. Smucker is no exception, warning at one point that unspecified health concerns or shifting consumer preferences could hurt its business.

But the specter of shipping disruptions, while apparently more distant than they once seemed, isn’t entirely unrealistic. The Coast Guard has helped set up two stations to clean vessels of oil before they move into the Mississippi, and three ships have been cleaned of oil so far. Archer Daniels Midland (ADM) and other companies have been monitoring the situation, and at least one has paid to move goods ahead of any potential disruption, The Winona (Minnesota) Daily News reported earlier this month. Longshoremen worry that shipping is already shifting for the Port of New Orleans, despite port officials’ denials.

Moreover, Smucker has gotten more specific since the spill started in April: The earnings release it filed with an 8-K filing on June 17 seems to be the first time the company mentioned the oil spill in its filings, and that was just a brief mention of the potential “impact of accidents, including the Gulf of Mexico oil spill,” buried in its disclaimer about forward-looking statements.

Clearly, it’s just one more reason we hope BP and company can stop the leak sooner rather than later. But until then, the threat to marine life and to the economy — like the oil itself — continues to spread.

Image source: Coast Guard Photo by Petty Officer First Class John Masson, from Deepwater Horizon Response via Flickr

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