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From Drought to Flood, the Mississippi Takes Ag on Wild Ride

From Drought to Flood, the Mississippi Takes Ag on Wild Ride

Soy Transportation Coalition takes a look at what a commerce interruption on the Mississippi has in store for agriculture

By Mike Steenhoek, Executive Director, Soy Transportation Coalition

To state the obvious, we are living in an era of extremes.  A few months ago, I and others were talking exhaustively about low water levels on the Mississippi River and its impact on barge transportation.  Now the topic is high water levels.  On Jan. 1, the water level on the Mississippi River at St. Louis was 4.57 feet below the river gauge.  Tomorrow the level at St. Louis is expected to rise to 39.4 feet above the river gauge.  We will therefore witness a 45-foot swing in water levels in four months.

DROUGHT TO FLOOD: This is what the Mississippi River looked like near St. Louis just a few months ago. Now, high water levels force closure of several locks and dams.

Most of the locks between the Quad Cities and south of Quincy, Ill., are closed. They are expected to reopen in the middle of this week.  Water levels this high can exceed the height of the locks and dams - requiring the Army Corps of Engineers to close them.  Also, rising water levels will usually produce a more turbulent current, which makes barge transportation more perilous.  The U.S. Coast Guard reported that 114 barges broke loose near St. Louis on Saturday night – four hit the Jefferson Barracks Bridge.  Most of the runaway barges have been corralled, but a number of them sank and a couple are still unaccounted for. 

Some agricultural products will be more affected by this interruption of navigation than others.  The lock closures will impact corn more than soybeans.  As the attached graphs highlight (download link below), 80% of soybean exports occur between September and February.  When South American harvest comes online, our exports drop significantly.  The reverse happens when our harvest occurs.  You'll notice that corn exports are more evenly distributed throughout the year. 

We have seen aggressive pricing at Gulf locations due to a demand for corn and soybeans since the river is not providing that pipeline of service.  Basis has been widening in the interior since grain handlers can't release what they have on hand and what they are receiving.  While most soybeans exports have already occurred, the major logistical challenges currently in Brazil are increasing demand for U.S. soybeans so this does have relevance to the soybean industry.   

Remember that an operable river system is not just important for transporting what farmers produce, but it's essential for the delivery of inputs as well.  According to the USDA, April is the number one month for barge deliveries of fertilizer.  These shipments originate in southern Louisiana and are destined to the Midwest. 

Cargo capacity (soybeans): Barge vs. Railroad vs. Truck

•One Barge: 52,500 – 57,000 bushels

•One 15 barge tow: 787,500 – 855,000 bushels

•One rail hopper car: 3,500 – 4,000 bushels

•100 car unit train: 350,000 – 400,000 bushels

•One semi: 910 bushels  

TAGS: USDA Soybeans
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