It’s like a bad movie sequel. While water levels on the Mississippi River haven’t hit the historic lows of October 2022, readings in some areas are already lower than at the same time last year. Transporation officials say that’s a real concern moving into harvest and could potentially lead to a shutdown of the river during the peak harvest and export season.
Mike Steenhoek, Executive Director with the Soy Transportation Coalition says, “You know when you look at places like Memphis, Tennessee. We’re actually about 10 feet lower right now that we weren’t the same period last year. And obviously, Memphis was one of the areas that was most adversely affected by the low water conditions in 2022. The stages unfortunately said for the problem becoming even worse this year. When you look at St. Louis, we’re about three feet lower right now than we were at the same period last year.”
That’s already restricting barge loading rates by 15% to 25% and it’s also decreasing the number of barges that can move in tow according to Steenhoek. “And then similarly, with the narrower shipping channel, you you’re seeing about another 20% to 25% reduction in the number of barges that you’re able to attach together to form one single unit.”
As a result, barge freight rates have soared, and Steenhoek says that makes the U.S. less competitive on the export front. “We’re looking at when you’re looking at freight originating out of St. Louis where 77% higher than the three-year average for freight originating in the Memphis area 91% higher than the three-year average.”
Last year the same scenario widened grain basis out 25 to 40-cents along the river, depending on the location, which cuts into farmer’s bottom line. And if the river sees any shut downs it could be disastrous as it would limit exports of soybeans during the prime season.
