Shrinking Mississippi River Lessens U.S. Gulf Grain Shipment

Shrinking Mississippi River Lessens U.S. Gulf Grain Shipment

The Mississippi River is the largest domestic shipping channel for US Grain exports. River levels in Cairo, Illinois are critically low and forecast to drop even further. Fertilizer sent north from the US Gulf for growers to apply in preparation for next year's crop is also under threat. 

Commercial barge traffic on southern stretches of the Mississippi River was at a standstill on Tuesday. Low water levels halted shipments of grain, fertilizer, and other commodities on the critical waterway. The price for loading a barge of soybeans on the Upper Mississippi this week is 33% higher than a year ago. Low water disrupted operations. Shippers have been loading less cargo per barge so vessels sit higher on the water. 

The U.S. Coast Guard has closed a section of the Lower Mississippi River for dredging. The US Army Corps of Engineers has been dredging near Stack Island to make water levels deeper. Dredging continues with the goal of reopening the waterway Friday with restrictions. 

Low water has brought some southern sections of the Mississippi River to a standstill. In the past week, Coast Guard reported eight groundings due to low water levels. Ingram Barge Company says low water disrupted its operations.

The impending shipments and costs are rising. It doesn't help that the corn and soybean harvests are lagging behind last year's pace. Thousands of bushels will be stranded unless space can be found on trains. Near-freezing temperatures forecast for later this week show that the end of the season is quickly approaching. Barge carriers are working quickly to complete ordered supplies. 

The largest US steelmaker, Nucor Corp., has no immediate plans to ship metal onto barges. The Mississippi River is home to more than 2,000 stranded vessels as a result of the river's drying up. The transportation issues on the Rhine River this summer are similar to how the Mississippi is drying up. Rivers dried up due to the drought, which had a particularly negative impact on Western Europe. 

Compared to rail and truck, barge transportation is less expensive and less harmful to the environment. Delays have increased the risk that coal shipments to power plants won't arrive at their destinations.

The Mississippi River reopens near Stack Island, Mississippi, and near Memphis, Tennessee. Low water levels had halted commercial shipments of commodities. This is the latest supply chain snarl that came in the middle of the autumn harvest. US food inflation is already at its highest level in four decades. USDA says 976,255 tonnes of corn, soybeans, and wheat were inspected for export at the Mississippi River Gulf Coast in the week ended Oct. 6. 

That is the lowest for the first week of October in at least nine years and down 22% from the previous five-year average. Traders expect a slow start for exports in the fourth quarter when a third or more of the year’s exports are typically loaded and shipped.

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