High water and strong currents on the lower Mississippi River are squeezing barge traffic and driving up the cost of agricultural shipping.
As the snow melts in the Upper Midwest and flows into the waterway, barge traffic is expected to slow even more, further limiting the movement of grain south and fertilizer north.
"High water is slowing transit. It's limiting tow sizes, speeds are reduced; it creates some safety risks," said John Griffith, senior vice president of global grain at CHS Inc. "When everything's slower and everything's more dangerous, it consumes more resources, and frankly we haven't gotten to the real spring thaw that's going to come and pump a bunch more water into the Mississippi River basin."
A towboat moving six barges crashed into a shipyard 60 miles upriver from New Orleans last week, and the Coast Guard closed the Mississippi River to all traffic near Baton Rouge, La., for several hours on Thursday after a towboat sank in the swollen river. No one was injured.
Barge companies, which can usually tow 40 barges at a time on the southern stretch of the Mississippi River, have reduced tow sizes to 25 to 30 barges. Also, the Coast Guard is now only allowing southbound barge traffic during daylight hours at Memphis; Vicksburg, Miss.; and Baton Rouge.
This may persist for the rest of March, according to the U.S. Department of Agriculture's weekly Grain Transportation Report, released Friday.
A week ago, grain movement by barge was down 58 percent compared with the same week in 2018, and the "less than ideal conditions" have driven up freight rates by more than 50 percent over the past three weeks, according to the report.
Though the Upper Mississippi is still closed for the winter as far south as Dubuque, Iowa, the higher cost of shipping is driving down local grain prices for farmers.
"When it becomes more and more difficult to move grain out your back door, grain handlers are less and less willing to accept grain through their front door," said Mike Steenhoek, executive director of the Soy Transportation Coalition. "The delivery locations will offer farmers less for their soybeans."
The deluge of water hitting the southern Mississippi is also carrying with it huge amounts of sediment, Steenhoek said, so even though the water is high the depth of the river is shallower in places, which further restricts how much grain can move downriver.
"Normally you have about a 45-foot depth, but now we're at 41 feet because of all this sediment," Steenhoek said of the lower Mississippi. "Every foot amounts to about 71,000 bushels of soybeans."
Griffith, the CHS executive, said he was in New Orleans this week and saw water from the Mississippi rushing into Lake Pontchartrain through the gates designed to release excess water.
"This isn't going to be cured by the end of March. I think we've got a crest estimated for early April," Griffith said. "We've got another month of these conditions to navigate, no pun intended."
Other headaches
The backup is a headache for farmers because many planned to sell grain before they start preparing their fields and planting. Grain handlers lowering the price they offer to farmers is only one potential problem.
"Worse yet, they may even go no-bid, because they're plugged up," Griffith said. "We've been struggling to sell grain to China and you add some of these frustrations on top of it, you know, it's just a challenging time in the industry."
While the Ohio River reopened for traffic on Monday, several locks there had been closed after the river between Cincinnati and Evansville, Ind., reached its highest level since 1997.
On Friday, the Coast Guard closed a portion of the Missouri River from just south of Omaha to St. Joseph, Mo., because of high water and dangerous currents. The Coast Guard also requested shippers create "as minimal wake as possible" between St. Joseph and Kansas City to minimize levee damage.
Spring conditions on the Mississippi River tend to always be complicated for shipping, but this spring is worse than normal, said Al Kluis, a commodity broker in Wayzata.
"I think it's extreme this year," he said.
Some grain is starting to be routed to the Pacific Northwest by rail or to ports near Houston, Kluis said.
After they are unloaded in New Orleans, barges full of grain are typically filled with fertilizer in the spring for the trip back north to the Midwest. Fertilizer shipping likely will be restricted by river conditions, too.
"There's already potential for a real crunch in fertilizer prices and delivery this spring because there wasn't much fall fieldwork done and there wasn't much fertilizer put on," Kluis said.
Record and near-record February snowfall in Wisconsin and Minnesota, which is just now thawing, should keep river levels high. Another thing farmers will have to deal with this spring is severely damaged gravel roads, said Steenhoek of the Soy Transportation Council.
"With the rain and the melt, gravel roads don't coexist well," he said. "It's just the fact that you need to replace it."
Adam Belz • 612-673-4405 Twitter: @adambelz
