Water levels are continuing to fall on key sections of the Mississippi River, raising fears of another autumn shipping crisis like that of 2022.
The squeeze on barge rates was spelled out Thursday in the Department of Agriculture’s weekly Grain Transportation Report.
“Restrictions — which have grown increasingly stringent since June — lower the amount of grain allowed to be loaded on a barge,” the report said. “As a result, barge supply has tightened, because more barges than normal are required to ship the same amount of grain.”
According to the report, spot rates for barge shipments out of St. Louis were $23.34 a ton. That was up 49% from the prior week and up 42% from a year ago. It also is up 85% from the three-year average.
Longer-term rates out of St. Louis also are higher, the report said. The one-month rate was up 53% from the five-year average. The three-year is 48% above the five-year average.
“If these conditions persist, the tight barge supply could be especially problematic as the corn and soybean harvests progress,” the report said.
On its website, shipping company American Commercial Barge Line said loading drafts out of St. Louis were about 15% below capacity. That size reduction was cited as prevalent on the entire Illinois and Mid-Mississippi section of the river system.
Mike Steenhoek, the executive director of the Soy Transportation Coalition, which focuses on moving soybeans to market, had a pessimistic assessment of the situation in a note he sent to members and the media Friday afternoon.
“Harvest and the concomitant export season is “game time” for farmers and the entire agricultural industry,” Steenhoek wrote. “During this period, we need our supply chain, including the Mississippi River, to be operating a full capacity. The current low water conditions are therefore clearly a cause for concern.”
As far as rain, it’s a double whammy, according to Steenhoek. The forecast for precipitation is “not favorable,” he said. “Moreover, any future rainfall that does occur will be largely absorbed by an increasingly dehydrated farm ground. Abundant and sustained rainfall will need to occur to change the water level trajectory along the inland waterway system.”
Barge rates quoted by the agriculture department’s report are based on a percentage of a 1976 base line. For example, weekly southbound barge rates out of St. Louis for the week ended Aug. 29 were quoted at 585. A week earlier, they were 392.
Fastmarkets Agricensus, an information service covering agriculture, quoted Diane Klemme, a vice president with Grain Service Corp. as saying that concern about the situation worsening is a factor in the market. “I suspect that freight is the driving factor [for rising barge premiums], with freight sellers perhaps nervous that water levels could continue to drop with the forecast for the first half of September remaining dry for most of the Midwest,” Klemme told Agricensus.
The Agriculture report echoed that. “Water levels on the Mississippi River System have been falling since June” the report said. “With lower-than-normal precipitation in the forecast, levels will likely continue to fall in the coming weeks.”
The Advanced Hydrologic Prediction Service, a division of the National Weather Service, reported that levels at St. Louis had dropped to minus 2.79 feet midday Friday.
The level is negative because it is below a base level. AHPS’ forecast calls for some improvement over the next few days but then dropping back again.
In its weekly report for May 10, the level was more than positive 20 feet.
Other forecasts for key points on the river, such as Memphis, show a similar pattern, though in the case of Memphis the falloff is more severe.
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