Grain shipments in the Mississippi River system are being affected by falling water levels, according to a report from World Grain.
Falling levels in the main US waterway are causing problems. This is raising costs and lengthening the transportation of grain to the Gulf of Mexico for export, according to a September 26 report.
About 60% of US grain exports are transported by the river system, levels of which have fallen since June, according to the report.
Last year, the waterway faced severe drought, reaching its lowest levels. As a result, there have been closures and restrictions on the river. This lasted more than 40 days, creating price uncertainty throughout the supply chain, as World Grain reported.
This year, load chains and trailer sizes were smaller. This caused delays of two to three days, as indicated in the September 22 Grain Transportation Report from the United States Department of Agriculture (USDA).
Citing the report, Freightwaves reported that the USDA said barge movements carrying grain in the week ending September 16 totaled 129,900 tons. This represented a drop of 25% compared to the previous week. Additionally, it was 38% lower compared to the same period in 2022. Drought conditions also slowed transport on the river.
Drought Conditions Affect Grain Transport in U.S. Mississippi Waterway
In terms of barge movements, that meant 82 barges moved down the river, a decline of 25 in one week, according to the grain shipment report.
With a limited prospect of more moisture. Conditions are not expected to improve much before the end of the year. River levels could fall to close to the record lows seen late last year. This forecast comes from Drew Lerner, senior agricultural meteorologist at World Weather.
“I think we will be a little better, but we will be dealing with low water levels through the fourth quarter,” Lerner said, according to World Grain.
In the 644-kilometer (400-mile) section of the Mississippi from the Ohio River to Jackson, Mississippi, all water gauges are at — or below — low water levels. This information is provided by the National Oceanic and Atmospheric Administration and the U.S. Geological Survey.
“Although October is expected to bring a little more rain and cooler temperatures. This reduces evaporation. However, the region is unlikely to see much improvement. Water levels will likely remain as they were or drop further,” Lerner said.
More rain was expected in November in the Ohio River basin, but it would not be as significant in the upper Mississippi or Missouri River basins.
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However, because it was an El Niño year, this generally brought above-normal precipitation, the World Grain report said.
In response to lower water levels, barge operators have taken action. This included restrictions on the draft and size of trailers. These measures have put pressure on capacity and increased competition for transportation. This, in turn, has driven up costs, according to the American Farm Bureau Federation (AFBF).
Between Cairo, Illinois, and the U.S. Gulf, barge loading drafts were 24% smaller than normal, while trailer sizes fell from 17% to 38%, the USDA reported.
Cairo-Memphis monthly grain barge rates rose from US$ 14.33/tonne in August to US$ 26.66/tonne in September. This data was provided by the USDA. However, compared to September of the previous year, these rates decreased, as they were US$ 36.95/tonne in that period. Furthermore, they are considerably lower than the peak seen in October 2022, when they reached US$ 71.40/tonne.
In the middle of the Mississippi River, load chains dropped 15% and tow size was reduced between St Louis, Missouri, and Cairo. The spot rate in St Louis increased by 376%, from US$ 8.06/tonne to US$ 38.34/tonne, slightly higher than last year's rate of US$ 38.10/tonne.
Last year, barge rates did not react to lower levels until September and October, when rates reached their own records of more than 2.000% from their underlying benchmark, AFBF said.
As harvest time approaches, demand for grain transportation has been lower than average, which has reduced the impact of low water levels on prices to date, AFBF said.
Source: Oils & Fats International
