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Barge traffic slows as drought slams rivers
Even though this year's corn and soybean crops have been gutted by drought in much of the nation, there's still grain piling up to the sky in some spots because the main way to get it moved down the chain is having just as rough of a year.
The drought has pushed levels to their lowest in the last 50 years on the Mississippi River, the primary inland aquatic trafficway for grain on its way from the Corn Belt and points south to the Gulf of Mexico, its last domestic stop before hitting the open ocean on the way to an overseas trading partner.
Now, as some stretches of the river remain closed to barge navigation and others are running at decreased capacity, corn is starting to pile up where this year's harvest has already begun.
"The main issue over here is the low river," says University of Arkansas Extension agriculture agent Robert Goodson. "As long as the Mississippi River stays low, storage may be an issue."
Corn yields are lower this year because of the drought. But, Arkansas farmers planted almost 20% more corn this year, there's still a lot of grain coming out of the field. Add to it that sorghum harvest has begun as well and it's creating an even greater problem.
"It's taxing the storage capacity of the elevators," says University of Arkansas agriculture specialist Scott Stiles. "Grain sorghum harvest is going strong as well and also competing for storage space. Sorghum acreage increased this year too, and the yields are good."
The drought's taken river levels lower than they've been in as long as 60 years, says American Farm Bureau Federation economist Veronica Nigh, and without any relief soon, they could reach the lowest levels since 1940, when they were the lowest ever. In terms of commerce alone, it's huge; Nigh says $180 billion in cargo traverses the Mississippi every year, including almost 2/3 of U.S. corn and 1/2 of soybeans destined for the export market. Then, heading north, the river moves a lot of fertilizer, coal and fuel.
And right now, sources in the river transportation industry say barges are lining up by the dozen at points of entry into the Mississippi; that is causing delays, for sure, but thus far, industry leaders say they should be able to keep up.
"Delivering throughout the Mississippi River system is slow in all areas," says G. Stephen Holcomb, vice president for investor relations with Kirby Corporation, one of the nation's largest inland waterway transportation companies. "We're still so far able to make our deliveries."
Though some sources say the low water levels mean barges can only carry up to 75% of their normal cargo, Holcomb says right now that tank barges, for example, have to trim back only 6 inches of total tank depth. "The normal depth of one of our tank barges is 9 feet, 6 inches and we're loading to 9 feet," he says.
Ironically, last year's ample rainfall in the northern half of the Mississippi River valley has contributed to this year's drought-driven logjam. The rain last year pushed more sediment than usual in the river channel, Nigh says, meaning that despite dredging -- like that going on around St. Louis, Missouri, this week, says Holcomb -- a bad problem is being made worse.
"The [Army] Corps [of Engineers] only has a certain budget in order to dredge and so we’re already starting off at pretty high sediment levels in the river," Nigh says. "So now you’ve got the bottom coming up and the top going down creating an unprecedented reality."
Looking ahead, barring any rainfall to raise the water levels on the Mississippi, it's going to be a challenging fall for terminals and elevators along the river, Nigh says.
"Because of the lower capacity of barges to float down the river, you’ve got a lot more stockpiling alongside the river. There are places where they don’t have enough capacity to store grain and that’s starting to be a concern for the fall," she says. "Are we going to have to start storing grain on the ground near the river because we just don’t have enough barge capacity to move it down?"
And, that's likely to translate to higher costs for farmers, not just to get this fall's harvest delivered to where it needs to be, but also once harvest is done and attention turns to fertilizer.
"There is no shortage of urea, it’s just in the wrong place. Low river levels have caused problems getting fertilizer moved upriver from the Gulf," Stiles says. "If river levels remain low, this will certainly add transportation cost as rail or truck will be the only alternatives. This will be an issue to watch, particularly for growers wanting to make fall nitrogen applications or top dress wheat this winter."