Quote:What do agricultural products, fertilizer, oil, and coal have in common?They all travel on the Mississippi River to reach the consumers who use those commodities.The challenge is that the river is at historically low levels and the barges carrying these products cannot transit.
Per Bloomberg, a drought has created low water levels that “are causing severe impacts to navigation not seen since 1988.” Nearly all the Mississippi River basin, “from Minnesota through Louisiana, has seen below-normal rainfall since late August. The basin from St. Louis south has been largely dry for three months, according to the National Weather Service.”
This is happening at the worst possible time as farmers are trying to get crops to market, there is a global shortage of fertilize at a time when it needs to be in the fields, and the price of gas is once again on the rise.
Nearly 30 percent of the nation’s soybean crop is transported by barge. Approximately two-thirds of corn that is exported from the U.S. also travels by barge. The low water levels have caused fewer barges to dock in New Orleans to be exported.
“The U.S. Department of Agriculture’s Grain Transportation Report, released on October 6 said that 1,890 grain barges have unloaded in New Orleans since September 1, about 39% fewer than the five-year average.” This has caused rates to skyrocket. Recently, “barge rates hit $49.88 per ton. That is the highest price on record and a 50 percent jump from 2021 shipping rates.”
Interestingly, the low water levels and reduced shipments have caused the price of soybeans, wheat, and corn to decrease slightly, as the demand for U.S. grain exports have decreased, due to the uncertainty of supply. This downturn in pricing should be short-lived as the on-going drought, high barge prices, and the scarcity of fertilizer will drive prices up.
Why don’t companies simply shift to other modes of transportation like rail and truck to move their products?
They are, to a certain extent. Companies are moving commodities such as steel, aluminum, and agricultural product via rail and truck, “despite costs that are up to five times more than what they would normally pay by barge.”But this is not a sustainable, long-term solution.
“In order to move the amount of freight that currently is in transit via barge on the Mississippi, it would require an immense amount of capacity that is unique from an equipment standpoint…the trailers required to haul grain versus coal and versus bulk liquids are all different and there are limited options.” In addition, the trucking and rail industry are still in crisis mode as the U.S. tries to recover from its supply chain crisis.
The U.S. Army Corps of Engineers is doing its best to free grounded vessels and dredge the river where it can, but groundings are causing challenges. The U.S. Coast Guard said, “at least eight groundings of barges have been reported in the past week, despite low-water restrictions on barge loads.” These groundings have halted river traffic in both directions for days.
This under-reported issue will add to the on-going inflationary pressure in the U.S. and abroad. If river traffic is not able to return to normal levels soon, we will see farmers miss the “fertilizing season,” which typically occurs in November. This will reduce crop yields and drive prices up. A reduction in the flow of oil, coal, steel, and aluminum will impact the prices of everything from cars to electricity and will drive home heating prices up.
(10-13-2022 06:56 PM)Redbanksdog Wrote: [ -> ]She's getting a little low around here. I think it was back in the late 80's when she got pretty low.
The preacher man says it's the end of time
And the Mississippi River, she's a-goin' dry
The interest is up and the stock market's down
And you only get mugged if you go downtown
(10-13-2022 06:56 PM)Redbanksdog Wrote: [ -> ]She's getting a little low around here. I think it was back in the late 80's when she got pretty low.
The preacher man says it's the end of time
And the Mississippi River, she's a-goin' dry
The interest is up and the stock market's down
And you only get mugged if you go downtown
We can skin a buck and we can run a trout line, and a country boy can survive.
Sounds like an idea situation for the Biden administration to step in and make the situation way worse and cause more inflation on these goods.
Granted that may sound sarcastic, but its not. Its pretty obvious they are trying to cause as much pressure as they can to our economy and supply chains.
They've already been sticking it to farmers the last 2 years with their regressive & draconian green polices, now this.
Was a dry Summer. No Tropical weather this year. Biden cured climate change. Blame him. Thanks a lot, Joe. Hurricanes are part of nature. Humans just got in the way.
(10-14-2022 09:29 AM)Eagleaidaholic Wrote: [ -> ]Was a dry Summer. No Tropical weather this year. Biden cured climate change. Blame him. Thanks a lot, Joe. Hurricanes are part of nature. Humans just got in the way.
As always its regional. Some areas like West Virginia had a record amount of rainfall this summer.
(10-14-2022 09:29 AM)Eagleaidaholic Wrote: [ -> ]Was a dry Summer. No Tropical weather this year. Biden cured climate change. Blame him. Thanks a lot, Joe. Hurricanes are part of nature. Humans just got in the way.
As always its regional. Some areas like West Virginia had a record amount of rainfall this summer.
My guess is it's been dry further up river? I know, at least with the local river, if it rains a lot way upstream, we get flooding locally. If it rains a lot locally, not much flooding, at least from the river.
(10-14-2022 09:29 AM)Eagleaidaholic Wrote: [ -> ]Was a dry Summer. No Tropical weather this year. Biden cured climate change. Blame him. Thanks a lot, Joe. Hurricanes are part of nature. Humans just got in the way.
As always its regional. Some areas like West Virginia had a record amount of rainfall this summer.
My guess is it's been dry further up river? I know, at least with the local river, if it rains a lot way upstream, we get flooding locally. If it rains a lot locally, not much flooding, at least from the river.
I think that's the situation. Its been a bad drought period in the northern plains and the northern Mississippi river basin. Minnesota through Missouri or something of that effect. Missouri is in a bad drought year.
It's been dry in almost the whole basin. The only areas larger than a county with above normal rainfall are central WV, the area within 25 miles of Wheeling, a strip 20 miles wide from Springfield IL to central IA, and parts of the Rockies & Western KS/NE that usually don't get much rainfall.
The two maps below are inches (1st map) and percent (2nd map) different from normal rainfall in the past 30 days. River basins are outlined in red.
The only areas in the whole basin with above normal rainfall are the far West (which don't usually see much rainfall at all).
In the map below, Purple is way above average Green is slightly above average Gray is average Yellowis slightly below average Red is way below average
Inches different from normal rainfall, last 30 days
Percent different from normal rainfall, last 30 days
(10-13-2022 06:56 PM)Redbanksdog Wrote: [ -> ]She's getting a little low around here. I think it was back in the late 80's when she got pretty low.
The preacher man says it's the end of time
And the Mississippi River, she's a-goin' dry
The interest is up and the stock market's down
And you only get mugged if you go downtown
We can skin a buck and we can run a trout line, and a country boy can survive.
