Moving Grain: Snow, Ice Storms Interrupt Barge Movements

Recovery Operations at Emsworth L/D and Ice Dams on the Allegheny. Photo: Pittsburgh District, US Army Corps of Engineers

Snow and Ice Storms Interrupt Grain Barge Movements

Since early February, grain barge movements on parts of the Mississippi River have been delayed and, in some cases, halted because of severe weather. For the week ending on February 13, total downbound grain barge movements were only 679,681 tons—a 14-percent drop from the previous week and 34-percent drop from 2 weeks ago.

The decrease occurred despite strong export demand. Since the second week of February, icy water conditions have slowed barge operations on the Illinois River. As of the beginning of this week, in response to forecasts of snow and ice storms, fleet movements have been suspended on the Mississippi River around St. Louis, as well as on the Ohio River, Illinois River, and Lower Mississippi River areas.

As a result, barge rates for this week at these locations should be interpreted with caution. The industry expects continuous logistical challenges for the rest of the week.

USDA Cooperative Research Compares U.S. and Canadian Rail Systems and Regulations

USDA’s Agricultural Marketing Service recently published a synopsis of a study conducted in cooperation with the University of Saskatchewan. The researchers describe the development of key rail regulations in the United States and Canada over the last several decades and identify several operational differences.

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For example, railroads in both countries have some freedom to set price, but face different regulatory limitations. In Canada, the revenue railroads can earn on grain shipments in the Western provinces is capped through a policy known as the “maximum revenue entitlement.”

Shippers in Canada can resolve rate disputes in a process known as “final offer arbitration.” In the United States, shippers can challenge the reasonableness of their rates using cost-based methods, such as “stand-alone cost” and “three-benchmark.”

Soybean Inspections Lowest Since Late August 2020

For the week ending February 11, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 2.6 million metric tons (mmt). Total grain inspections were down 36 percent from the previous week, up 10 percent from last year, and up 5 percent from the 3-year average.

Grain inspections dropped 13 percent for wheat, 17 percent for corn, and 57 percent for soybeans. Total inspections were the lowest since late December 2020, and soybean inspections were the lowest since late August.

The large drop in soybean inspections was partly due to weather-related transportation delays, as well as a significant drop in shipments to Asia. Inspections of soybeans destined to China decreased 54 percent from week to week.

From the previous week, total Pacific Northwest inspections decreased 28 percent, while Mississippi Gulf inspections fell 42 percent.

Snapshots by Sector

Export Sales

For the week ending February 4, unshipped balances of wheat, corn, and soybeans totaled 52.3 million metric tons (mmt). This is 3 percent lower than last week, but still represented a significant increase in outstanding sales from the same time last year.

Net corn export sales were 1.449 mmt, down 81 percent from the past week. Net soybean export sales were 0.805 mmt, down 2 percent from the previous week. Net wheat export sales were 0.591 mmt, down 8 percent from the previous week.

Rail

U.S. Class I railroads originated 25,951 grain carloads during the week ending February 6. This was a 6-percent decrease from the previous week, 24 percent more than last year, and 17 percent more than the 3-year average.

Average February shuttle secondary railcar bids/offers (per car) were $267 above tariff for the week ending February 11. This was $348 more than last week and $573 more than this week last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending February 13, barge grain movements totaled 679,681 tons. This was 14 percent lower than the previous week and 51 percent more than the same period last year.

For the week ending February 13, 403 grain barges moved down river—73 barges fewer than the previous week. There were 777 grain barges unloaded in New Orleans, 26 percent fewer than the previous week.

Ocean

For the week ending February 11, 48 oceangoing grain vessels were loaded in the Gulf—55 percent more than the same period last year. Within the next 10 days (starting February 12, 2021), 62 vessels were expected to be loaded—32 percent more than the same period last year.

As of February 11, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $49.00. This was 5 percent more than the previous week. The rate from PNW to Japan was $27.00 per mt, 1 percent more than the previous week.

Fuel

For the week ending February 15, the U.S. average diesel fuel price increased 7.5 cents from the previous week to $2.876 per gallon, 1.4 cents below the same week last year.

Full report.




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