Barge rates on the Mississippi River are rising as water levels on key sections of the waterway continue to fall, according to US Department of Agriculture (USDA) data reported by Freight Waves.
“Restrictions — which have grown increasingly stringent since June — lower the amount of grain allowed to be loaded on a barge,” the USDA 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 USDA’s 31 August Grain Transportation Report, spot rates for barge shipments out of St Louis were US$23.34/tonne – a 49% increase compared to the week prior to the report and 42% higher than the previous year. It was also an 85% increase compared to the three-year average.
Longer-term rates out of St Louis were also higher, with the one-month rate up 53% compared to the five-year average, the report said.
“If these conditions persist, the tight barge supply could be especially problematic as the corn and soyabean harvests progress,” the USDA said.
On its website, shipping company American Commercial Barge Line said loading drafts out of St Louis were about 15% below capacity, with a similar size reduction on the entire Illinois and Mid-Mississippi section of the river system.
According to Mike Steenhoek, the executive director of the Soy Transportation Coalition, an organisation which focuses on moving soyabeans to market, the outlook was pessimistic.
“Harvest and the concomitant export season is “game time” for farmers and the entire agricultural industry,” Freight Waves quoted Steenhoek as writing in a note sent to members and the media on 1 September, the same day as the report.
“During this period, we need our supply chain, including the Mississippi River, to be operating at full capacity. The current low water conditions are therefore clearly a cause for concern.”
In addition, the rainfall forecast was “not favourable”, Steenhoek said.
“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” he added.
Water levels on the Mississippi River System had been falling since June, the USDA report said.
“With lower-than-normal precipitation in the forecast, levels will likely continue to fall in the coming weeks,” it added.