Many barges were reported to have run aground on the
lower Mississippi River. With grain barge shipping rates also rising to historic
highs, US grain exports have been impacted.
One barge shipper told Reuters that at least 10 boats had
run aground south of Cairo, Illinois, in the past week, while others are
carrying less cargo.
“Guys that thought they would be loading 12-foot
drafts are now loading /2 or less, so you just lost at least 500 tons per
barge,” he said.
Drought had dropped inland waterways to levels not seen for
decades, and little rain is forecast.
About 60% of US corn, soybean and wheat exports exit the
country via the Gulf of Mexico. The low water levels have coincided with Midwest
harvest and the beginning of the busiest crop export season. Global supplies hit
by the war in Ukraine and poor yields in some other global markets (including
Brazilian soy) have led to strong US demand for food and fuel.
Mike Steenhoek, executive director for the Soy
Transportation Coalition, said that “the
projections for the water levels are going down, which means this situation is
going to get worse. Unless we get a significant amount of rainfall soon, this
season is going to be a challenge.”
Barge travel in the US has long been one of the most
cost-efficient means of getting commodity crops into the global market. But the
lower river levels have seen shipping lines reduce barge drafts significantly. effectively
cutting tonnage per barge by a quarter or more. Tow boats on the lower
Mississippi are forced to reduce the number of barges per tow by nearly 40% to
squeeze through drought-parched shipping lanes, insiders said.
Barge freight at the US Port of St. Louis hit a
record-high $49.88 a ton last week, up 58% from a year ago, the U.S. Department
of Agriculture (USDA) said.
That has led some grain elevators looking for
alternatives. Some grain sellers are looking at rail freight, or looking to
ports outside of New Orleans, they said.
By September 29th the Mississippi River at the
Memphis Tennessee gauge was at the eighth-lowest level on record and looked
likely by the middle of this month to challenge an all-time low set during the
drought of 1988.
The loss of volume and the slowed navigation has spiked
barge shipping costs and made US crops less competitive globally. A recent
surge in the value of the US dollar has also reduced its levels of
competitiveness.
