Mon, 11 Dec 2023

NEW ORLEANS, Louisiana: As Midwest farmers prepare to harvest crops and send tons of grain downriver to the Gulf of Mexico, a prolonged drought has reduced the Mississippi River level forcing barge companies to reduce their loads.

The transport restrictions have caused issues for barge companies, while thousands of farmers who have watched drought scorch their fields for much of the summer now face higher prices to transport what remains of their crops.

Some 60 percent of U.S. grain exports are taken by barge down the Mississippi to New Orleans, where the corn, soybeans, and wheat crops are stored and eventually transferred to other ships.

This method is usually the most inexpensive and efficient way to transport crops, with a typical group of 15 connected barges carrying the same cargo as some 1,000 trucks.

But as the river dried up, the cost has subsequently surged, with the cargo rate from St. Louis heading south being 77 percent more than the three-year average.

Merritt Lane, president of Canal Barge Company of New Orleans, said, "We are keeping things moving but could use some rain, some help from Mother Nature."

Mike Steenhoek, executive director of the Soy Transportation Coalition, said many Midwest farmers have multiple transport options, among them trucking and shipment by train for use by nearby ethanol and biodiesel plants and for processing into animal feed, but for grain exported abroad, the higher cost of shipping down the Mississippi have caused pain.

"It is the way that farmers in the middle of the U.S. connect with the international marketplace. It allows these farmers to have a very efficient way of moving their products a long distance in a very economical manner," Steenhoek said.

At a time when American soybean and corn exports face increased international competition, rising barge costs are eating directly into farmers' profits, he added.

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