Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
Corn+Soybean Digest

Can Our Rivers Deliver?

If you want to understand the many challenges facing the Mississippi River system and everyone who uses it, look no further than Lock 25 at Winfield, MO.

Lock 25 typically handles 5,100 tows and over 30 million tons of cargo per year. Grain and oilseed shipments make up almost one-third of that tonnage. Fertilizer shipments can total 4 million tons or more.

From Dubuque's Lock 11 north, the river's winter closing provides a window to make repairs without affecting traffic. Closures are more complex farther south, where the river doesn't close. That includes Lock 25.

Machinery that allows the lock to operate during high-water events is failing, so this winter the Army Corps of Engineers closed the single lock for essential repairs. To accommodate corn and soybean shipments from the late 2009 harvest, repairs are scheduled from January to early April — but that creates problems for fertilizer shipments moving upriver for spring planting.

According to The Fertilizer Institute (TFI), most of the fertilizer for the Upper Midwest moves by barge. While there are rail lines to some facilities, shifting from barge to rail could increase transport costs by 25-40%, one industry source estimates.

As more fertilizer comes from overseas, the challenge of coordinating ocean shipments with restrictions on the river grows more complicated. The result: TFI experts say this spring could be a logistical nightmare for the industry.

Paul Rohde, vice president of Waterways Council, Inc., sums up the interconnected conflicts involved in managing the river: “You cannot compartmentalize an issue affecting just a part of the river and ignore its impact on other reaches.”

THE LIST OF issues threatening to gum up farmers' crop and fertilizer shipments includes aging locks, inadequate lock size, a repair schedule that is now critical, chronic budget shortfalls and problems coordinating overseas fertilizer shipments with restricted river availability.

“Many of these locks were built to last 50 years and are now more than 70 years old,” says Bob Anderson, U.S. Army Corps of Engineers public affairs officer. “Eventually the concrete will start to crumble and you have to shut things down to replace it.”

Maintenance grows more expensive while funds are limited, he explains. “On the upper river, improving locks is a key issue, but one job can cost over $1 billion. Limited funding limits what you can do.”

The highest priority jobs are on the Ohio River, where several locks are in imminent danger of failing.

Doug McNeely, Bunge regional manager for the Central Gulf region, also cites maintenance as a major concern. “The ‘fix it as it fails’ approach is where we're at today,” he says, citing a recent incident where a gate fell off the Markland Lock at Warsaw, KY. “I'd hate to see the same thing happen on the middle Mississippi in September or October. That would bring our grain shipments to a screeching halt.”

Rohde explains that the corps' budget for operations and maintenance is part of its civil works budget for 240 locks and dams nationally. When funding in the civil works budget isn't adequate, projects that aren't maintained end up competing for funds under the construction budget.

That's why, when hurricanes Katrina and Rita hit the Gulf Coast in 2005, the resulting damage increased the corps' maintenance backlog and continues to compete for repair and maintenance funding.

“It's like an auto. If you miss oil changes, down the road you are going to spend more on repairs and it's going to cause more disruption. On the rivers, we're now spending much more money much less efficiently because of this policy process,” Rohde says.

The list of stakeholder concerns about the river system doesn't end with lock expansion or maintenance.

Another important issue is the Missouri River, where a management approach that makes channel depths unreliable is choking off barge traffic, according to Rohde.

That affects the Mississippi in two ways: first, because the precedents set on the Missouri could expand to the management of other waterways; and second, because in dry years, the Missouri contributes more than 60% of the lower Mississippi's water volume. “The Missouri could be the canary in the coal mine for the Mississippi,” Rohde says.

Industry sources also cite concerns about regulatory issues that consume time and resources. For example, the barge industry is the only part of the U.S. maritime system that must comply with both Occupational Safety and Health Administration (OSHA) and U.S. Coast Guard regulations.

There are worries, too, that Congress might replace the current tax on diesel fuel, which supports a hefty share of river maintenance through the Inland Waterway Trust Fund, to a fee for lock usage that would effectively exempt shipments on the lower river from paying into the fund. The trust fund is already facing a shortfall this year, and industry sources predict major work on the upper Mississippi won't advance until the funding question is resolved.

In the end, reliability is the key issue for all users, from fertilizer manufacturers shipping urea north in the spring to the corn and soybean industry sending millions of bushels downriver in the fall, and ultimately to foreign customers around the world.

“AT SOME POINT, the question of reliability gets built into the price customers will pay,” says Dan Keefe, who monitors transportation's role in exports for the U.S. Grains Council.

The USDA's Agricultural Marketing Service notes that the inland waterway system is aging but considers it to be generally reliable at present. For corn and soybean farmers, that's critical, since almost 60% of U.S. grain exports ship out of the Mississippi or Texas Gulf.

That's not likely to change soon, as shippers warn that railroads to the West Coast ports already operate at capacity. Inland waterways are the only system with excess capacity to handle bigger crops.

Garry Niemeyer, an Illinois corn grower with years of experience following river issues, thinks river improvements could open new grain markets “if we could containerize our shipments and move them by river. A lot of farmers would have enough grain to ship container loads and serve our markets in a more specialized way, but right now we're limited by the old 600-ft. locks,” he says.

Niemeyer also sees how river problems can hurt growers nationwide. “When we had Katrina, corn growers from Nebraska on east across the Corn Belt felt the pains and understood the importance of keeping the river system open and viable,” he says.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.