USDA Explores Third-Quarter Barged Grain Movements on the Mississippi River

In its weekly Grain Transportation Report on Thursday, the USDA’s Agricultural Marketing Service (AMS) indicated that, “The Mississippi River System (MRS) comprises the Nation’s primary waterways for moving grain from Midwest production areas to the U.S. Gulf region for export.  Close to 60 percent of U.S. grain exports (wheat, soybeans, and corn) travel this route by barge.”

AMS explained that, “In June, low water on the MRS led to draft and tow restrictions on barges, as happened in fall 2022. From the week ending July 8 to the week ending September 30, downbound barged grain volumes on the MRS totaled 3.9 million tons—35 percent lower than the third quarter last year and 53 percent lower than the previous 5-year average.”

Last week’s report pointed out that, “Low Water on the Mississippi River System.  In 2022, the MRS saw historic low water levels that stymied barge transportation from late September to early December. This dramatic reduction in MRS barge traffic resulted in below-average yearly grain volume and record high freight rates. In 2023, low water levels in the MRS became a problem in June, about 2 months earlier than in 2022, and continued for most of third quarter 2023.

“Since June 2023, increasingly stringent restrictions have governed draft and tow sizes on various sections of the MRS. The most severe restrictions have been on the Lower Mississippi and Ohio Rivers at Cairo, IL.”

AMS noted that, “Third-quarter weekly spot rates at St. Louis were below last year, until the week of August 28. In that week, responding to continued low water in the MRS, the U.S. Coast Guard further tightened draft and tow size restrictions that had been active in June and July.

“Although partly reflecting the start of harvest, the late-August rise in third quarter 2023 spot rates mostly stemmed from the tightened constraints on barge capacity.

“As of September 26, spot rates at St. Louis had reached $52.91/ton, up 6 percent from last year and up 115 percent from the previous 3-year average.”

The Transportation report sated that,

In fourth quarter 2023, barged grain movements should begin to pick up as the corn and soybean harvests progress. However, if low-water conditions in the MRS continue, lack of precipitation may lead to increased restrictions, which would further shrink an already tight barge supply.

“The rising harvest demand and shrinking barge supply may lead to above average spot rates that approach last year’s record rates. However, lessons learned last year and early preventive measures may help mitigate conditions that created record-high spot rates seen in 2022.”