The cost of shipping grain by truck, barge and ocean vessel has fallen in the past year, due in part to lower fuel costs and, for ocean freight, an overcapacity of ships.

This has lowered the price to land U.S. crops in Asia, Europe and Africa. But these changes have also helped competitors, so the impact on the balance of trade appears negligible.

The cost of shipping grain by truck, barge and ocean vessel has fallen in the past year, due in part to lower fuel costs. (Photo: DarcyMaulsby/Thinkstock)

Here are some numbers for wheat from USDA’s latest Grain Transportation Report. Wheat shipped from Kansas to Japan via the U.S. Gulf in the first quarter cost $69.89 per metric ton compared with $76.68 in 2015’s fourth quarter and $79.68 in 2015’s first quarter, a year-to-year drop of 12.3%. Include the cost of the wheat, and the total cost of landing the grain in Japan was $221.52 ($6.03/bushel), compared with $282.14 a year ago ($7.68).

USDA said much of this reduction is due to lower truck and ocean freight. Barge rates also are down from a year ago, while rail is unchanged to a little lower.

"Cheaper transportation costs have lowered the price discrepancy between U.S. wheat originations and our competitors, but we’re still priced out of the big Middle East/North African markets,” said Bryce Knorr, Farm Futures senior grain analyst. "The biggest part of total freight costs come in ocean rates, and they’re down for everyone. Ocean rates are on the rise recently due to increased Chinese purchases of bulk commodities. Still, shipping costs are much cheaper than they were during the boom.”

In the U.S., lower fuels costs have brought down truck rates, which in some areas have increased marketing opportunities for grain merchants. In central Illinois, shipping corn and soybeans to Mississippi River markets is now a viable option to local processors. In western Iowa, near I-80, corn can now go to ethanol plants up to 30 miles away versus less than 20 before.

The expanded marketing is not universal. One Illinois merchant said the cost savings was not enough to justify the longer haul.

“You are talking fraction of cents per bushel,” said the merchant of this year’s lower fuel surcharges on trucks.

Lower barge rates this year allowed river merchants to pass the savings onto farmers with stronger basis bids for corn and soybeans, a Quad Cities shipper said.

USDA’s transportation report said the per-ton cost of shipping crops by barge to Gulf export markets is down 25% from a year ago on the upper Mississippi as of May 17, down 29% on the mid-Mississippi, and down 32% on the lower Illinois River.

The latest transportation report said nearly 841,000 tons of grain were shipped by barge during the week ended May 14. That is down 16% from the prior week but up 9% from a year ago.

For truckers, the U.S. average diesel fuel price increased 3 cents to $2.30 a gallon in the week ended May 16, but that is down nearly 61 cents from the same week last year.

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