Just as corn and soybean harvests are ramping up, commercial barges on the southern stretches of the Mississippi River came to a standstill last week. Ongoing drought in portions of the Midwest and West have brought the Missouri and Mississippi rivers to historic lows, limiting the transport of crops and inputs in both directions.
The inability to move grain downriver will likely mean lower prices for both corn and soybeans as the new crop comes in.
The National Weather Service predicts that the reading at Memphis, Tennessee, will reach the second-lowest level ever by Oct. 13. Corps officials in Louisiana are saying that the river level is so low that the Gulf of Mexico’s salt water has been creeping closer than usual to New Orleans, threatening drinking water.
“Due to low water levels on the Lower Mississippi River, we have seen an increase in commercial vessel groundings,” said Capt. Eric Carrero, Director of Western Rivers and Waterways at Coast Guard District Eight. “In response, the Coast Guard established a Marine Transportation System Recovery Unit with our federal, state, local, and maritime industry partners to facilitate safe navigation and the continued flow of commerce along the affected waterways.”
Most of the movement issues are occurring downstream, especially in Louisiana where, according to Reuters, “Around 100 tow boats hauling some 1,600 barges were lined up for miles waiting to pass through one trouble spot near Lake Providence, Louisiana, that has been largely closed since late last week.”
The U.S. Department of Agriculture’s Grain Transportation Report released last week that 1,890 grain barges have unloaded in New Orleans since Sept. 1, about 39 percent fewer than the five-year average.
Chad Hart, Iowa State University associate professor of economics and Extension crop markets specialist, told Iowa Farm Bureau, “I think we’re likely to see some depressed prices because of this. This is a situation where you will have opposite effects depending on what side you’re on. … Since we will have more supply staying here, that will likely cause lower prices. On the other hand, export markets will see less supplies available, which means higher prices for them.”
While barges are still available to move products, the pace of movement was slowed. Last week, prices for November soybeans and December corn in southeast Iowa fell according to the Iowa Farm Bureau.
Corn was trading about 30 cents below the Chicago Board of Trade price, averaging $6.53 per bushel. Soybeans were more than 65 cents below CBOT, at $13.04 per bushel. By comparison, basis levels in northwest Iowa last week were 12 cents below CBOT for corn and 47 cents below for soybeans.