Moving Grain: Mid-Mississippi Barge Rates Exceed Twin Cities’

Towboat and barge on the Mississippi Ridge near the Helena, Arkansas bridge. Photo: Robert Goodson, U of Arkansas

Mid-Mississippi Barge Rates Exceed Twin Cities Rates

Spot barge rates for export grain originating from ports near the Twin Cities (MN) and Mid-Mississippi (a stretch of the Mississippi River that centers around Davenport, IA) have reached yearly highs. As of July 30, the Mid-Mississippi rate had increased by 14 percent compared to last week and the Twin Cities’ rate had increased by less than 3 per cent, the previous yearly highs for both.

This week, the rates in the Mid-Mississippi exceeded those in the Twin Cities by over $1 per ton. On average, it costs shippers $5.57 more per ton to ship from the Twin Cities than from the Mid-Mississippi when both stretches of the river are in service.

The inversion of per-ton rates is usually short-lived and has only occurred eight times since 2004. The current inversion is due to increased demand from shippers in the Mid-Mississippi area and a tight supply of barges from shipping companies as navigation conditions have improved.

FMCSA Seeks Comments on HOS for Agricultural Commodities

The Federal Motor Carrier Safety Administration seeks comments to assist in determining whether, and if so to what extent, the Agency should revise or otherwise clarify the definitions of “agricultural commodity” or “livestock” in the “Hours of Service (HOS) of Drivers” regulations.

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Currently, during harvesting and planting seasons as determined by each State, drivers transporting agricultural commodities, including livestock, are exempt from the HOS requirements from the source of the commodities to a location within a 150-air-mile radius from the source.

This Advance Notice of Proposed Rulemaking is prompted by indications that the current definition of these terms may not be understood or enforced consistently when determining whether the HOS exemption applies. Comments are due on or before September 27.

Corn and Soybeans Boost Total Grain Inspections

For the week ending July 25, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions reached 2.13 million metric tons (mmt). This amount is up 43 percent from the previous week, down 27 percent from last year, and 11 percent below the 3-year average.

The rebound in inspections was caused by a 47 percent increase in corn inspections and an 84 percent jump in soybean inspections. The inspection increases were primarily for grain destined to Asia.

Soybean inspections reached 1.09 mmt, the highest since the third week of February. Wheat inspections were down 13 percent from week to week. Inspections of grain increased in the Pacific Northwest (PNW) and the Mississippi Gulf by 50 percent and 110 percent, respectively, from the previous week.

Snapshots by Sector

Export Sales

For the week ending July 18, unshipped balances of wheat, corn, and soybeans totaled 18.1 mmt. This indicates a 12 percent decrease in outstanding sales, compared to the same time last year. Net corn export sales reached .121 mmt, down 39 percent from the previous week. Net soybean export sales were negative .78 mmt, down significantly from the past week. Net weekly wheat export sales reached .660 mmt, up 90 percent from the from the previous week.

Rail

U.S. Class I railroads originated 22,705 grain carloads for the week ending July 20. This is a 6 percent decrease from the previous week, 5 percent less than last year, and unchanged from the 3-year average.

Average August shuttle secondary railcar bids/offers (per car) were $178 below tariff for the week ending July 25. This is $123 less than last week and $3 lower than last year. There were no non-shuttle bids/offers this week

Barge

For the week ending July 27, barge grain movements totaled 784,596 tons. This is a 1.5 percent increase from the previous week and 13 percent less than the same period last year.

For the week ending July 27, 496 grain barges moved down river. This is 6 more barges than the previous week. There were 590 grain barges unloaded in New Orleans, 42 percent more than the previous week.

Ocean

For the week ending July 25, 30 ocean-going grain vessels were loaded in the Gulf. This is 21 percent fewer than the same period last year. Fifty-five vessels are expected to be loaded within the next 10 days. This is 25 percent more than the same period last year.

As of July 25, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $50.50. This is 2 percent more than the previous week. The rate from the PNW to Japan was $28.00 per mt, 4 percent more than the previous week.

Fuel

For the week ending July 29, the U.S. average diesel fuel price decreased 1 cent from the previous week, to $3.034 per gallon. This price is 19.2 cents less than the same week last year.

Full report.


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