Milling & Baking News - November 1, 2022 - 14

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TUES | 11 01 202 2
Water woes tighten capacity for
agricultural freight shippers
KANSAS CITY - The low water levels
flowing down the Mississippi River continue
to reverberate through agricultural
freight markets.
At 2,340 miles, the Mississippi is the
second-longest river in the United States
(behind the Missouri), but feeds from the
largest drainage basin in the country. It
drains all or parts of 31 states and two
Canadian provinces situated between
the Rocky Mountains and Appalachian
Mountains. It's also a vital southbound
Nevertheless, low water persisted. In
numerous places, such as in New Madrid,
Mo., where the river wraps around a
non-contiguous exclave of Kentucky, and
120 miles farther south at Memphis, the
devices that the US Geological Survey
uses to gage height, or stage, have begun
to register zero.
" With river stages around the area
being so low, a few gages have been
reporting negative values, " the National
Weather Service office in Paducah, Ky.,
tweeted on Oct. 17. " Negative values do
not mean the river has run dry. Rather,
the water level has fallen below the 'zero'
reference point for the river gage, which
is above the river channel bottom. "
The water level has dropped so preroute
to the Gulf for US exporters, carrying
92% of US agricultural exports and
78% of the global exports of feed grains
and soybeans.
In 2022, the water level in the Mississippi
has dropped to at least 30-year lows
and to record lows in many places in the
South, such as in Baton Rouge, La., where
receding water revealed a ship that sank
in 1915. In October, barges were loaded
with reduced capacities in an effort to
avoid grounding on sandbars. Groundings
still occurred, causing commercial traffic
and riverboat cruises south of Illinois to
be halted for more than a week. In some
places such as just north of Vicksburg,
Miss., barges staged along the shore awaiting
sufficient water levels to move safely
south and for water to rise high enough to
unload at ports and docks. The US Army
Corps of Engineers initiated dredging
operations to deepen the shipping channel
near Memphis, Tenn., and Stack Island,
Miss., and reopened the river Oct. 10.
14
MILLING & BAKING NEWS
cipitously in 2022 because the regions
that feed directly into the Mississippi, or
into tributary rivers that then feed the
Mississippi, have experienced extended,
ongoing periods of drought. That, along
with forecasts envisioning a La Niña
oceanic-atmospheric phenomenon this
winter, means relief isn't yet in sight for
shippers along the channel nor those
vying for increasingly tighter truck and
rail capacity in a much wider swath of the
United States.
Big swaths of the country received
some rain in the last week of October.
Hurricane Roslyn slammed into Mexico
north of Puerto Vallarta as a Category 3
storm. As another storm approached, Roslyn's
remnants were pushed north into
the US southern and central Plains from
Texas to Illinois, issuing a few inches of
badly needed moisture into dry soils and
shallow rivers.
" Water levels are still really low on
the river, even as parts of the Ohio River
Valley have seen a bit of rain recently, "
a grain buyer for a major miller said
Oct. 24. " Obviously that in itself won't be
enough to move the needle on its own,
we'll need some continuous rain to raise
levels at docks down south. "
For shippers, low water has meant
limited draft sizes (a measure from the
waterline to barge hull structure) and tow
sizes (how many barges can be linked to
be propelled by one pusher boat).
" Shippers can't efficiently or economically
move the grain from north to south, "
the grain buyer said. " If they can't use
barges efficiently, they've got to use rail to
supplement. Now all of a sudden, we've got
the export market competing for rail as
well. It introduces another party seeking
freight that historically is not there. Rail
service depends on a lot of factors, but
essentially when there's a bid and an ask,
whoever pays the highest price gets the
freight. Plus, the window of opportunity
for US soybean exports is closing quickly
because when Brazil starts harvest mid- to
late-Q1, they'll have the cheaper supplies. "
Rail freight costs were rising in the last
week of October. Secondary market bids
for Union Pacific single cars were $200
over tariff per car on $300 offers.
" Costs aren't stupid high like last year,
but this is how it began in 2021 about one
year ago, " a hard red winter wheat trader
said Oct. 25.
Meanwhile, barge rates spiked in early
October, but dropped at mid-month, the
US Department of Agriculture said in
its latest Grain Transportation report.
The St. Louis barge spot rate hit a peak
of $105.85 per ton in the week of Oct. 10
before slumping to $72.58 per ton a week
later. After the dip, the spot rate remained
up 130% from 2021 and up 260% from the
recent three-year average.
" Amid uncertainty about when barge
traffic will normalize, some grain shippers
have delayed deliveries until later
in the year, which has softened demand
for barges, " the USDA said. " Although
spot rates have fallen, water levels on the
Lower Mississippi River (LMR) continue
to be an issue, with the river gage at Memphis
dropping to a record low of −10.76 feet
on Oct.18. On the Ohio River (which feeds
a significant portion of the LMR's water),
low water levels have delayed barge traffic
because of groundings and closures
for dredging work. "
Periodic dredging closures, and restrictions
on tows and drafts, are expected to
persist at least through the end of October,
based on forecasts for precipitation, the
USDA said. MBN
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Milling & Baking News - November 1, 2022

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