Moving Grains: Potential Relief of Supply-Chain Bottlenecks

    President Announces Changes, Potential Relief of Supply-Chain Bottlenecks

    On Wednesday, October 13, the President announced the Port of Los Angeles would begin operating around the clock, joining Long Beach, which already operates 24/7. The expanded hours are to help relieve growing backlogs in the busiest U.S. container port complex.

    Convening leaders of business, unions, and ports, the Administration’s negotiation efforts have so far secured commitments from shippers and retailers to ensure extended port hours will be well utilized. According to a White House statement, Walmart will increase its container turnover 50 percent over several weeks by increasing its nighttime operations.

    United Parcel Service plans to increase its 24/7 operations, which will allow it to move 20 percent more containers off the ports. FedEx will work with its trucking and rail providers to double the number of containers it moves at night. Samsung said its warehousing operations will be open 24/7 for the next 90 days in a bid to move 60 percent more containers out of the ports.

    Containerized agricultural exporters rely heavily on the Los Angeles and Long Beach port complex to move products overseas. The ports’ efforts will help regain terminal space by clearing import containers and allow more fluid operations for all users.

    Grain Inspections Highest Since Mid May

    For the week ending October 7, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 2.86 million metric tons (mmt). Total grain inspections were up 19 percent from the previous week, down 27 percent from last year, and up 11 percent from the 3-year average.

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    Grain inspections were the highest since mid May, with soybean inspections jumping 87 percent from the previous week. From week to week, soybean shipments to China (1.17 mmt) rose over 200 percent, while wheat inspections fell 29 percent and corn inspections fell 14 percent.

    Also, from the previous week, total inspections increased 45 percent in the Pacific Northwest (PNW) and increased 1 percent in the Mississippi Gulf. The high increase in PNW inspections was reflected in a significant jump in PNW rail deliveries of grain to port.

    The high week-to-week increases were a marked departure from the general trend: over the last 4 weeks, total inspections were 38 percent below last year and 21 percent below the 3-year average.

    Minnesota Provides HOS Relief To Transport Livestock Feed

    Signed on October 4, the Governor of Minnesota’s 30-day executive order (EO) 21-32—effective immediately—declares an emergency in Minnesota and waives hours-of-service (HOS) trucking regulations. The HOS waivers are intended to support Minnesota livestock producers in safely and efficiently transporting livestock, water supplies, and livestock-feed-related commodities.

    Extreme drought in Minnesota has made hay and other forage scarce. With EO 21-32, the Governor extends the HOS waivers originally issued in other EOs in July and August.

    Snapshots by Sector

    Export Sales

    For the week ending September 30, unshipped balances of wheat, corn, and soybeans for marketing year 2021/22 totaled 51.1 million metric tons (mmt), down 17 percent from same time last year. Net corn export sales were 1.265 mmt, significantly higher than last week.

    Net soybean export sales were 1.042 mmt, down 5 percent from last week. Net weekly wheat export sales were 0.333 mmt, up 15 percent from last week.

    Rail

    U.S. Class I railroads originated 26,007 grain carloads during the week ending October 2. This was a 19-percent increase from the previous week, 2 percent less than last year, and 15 percent more than the 3-year average.

    Average October shuttle secondary railcar bids/offers (per car) were $59 above tariff for the week ending October 7. This was $211 less than last week and $709 lower than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending October 9, barged grain movements totaled 590,886 tons. This was 20 percent higher than the previous week and 27 percent lower than the same period last year.

    For the week ending October 9, 360 grain barges moved down river—65 barges more than the previous week. There were 747 grain barges unloaded in the New Orleans region, 17 percent more than last week.

    Ocean

    For the week ending October 7, 32 oceangoing grain vessels were loaded in the Gulf—27 percent fewer than the same period last year. Within the next 10 days (starting October 8), 53 vessels were expected to be loaded—7 percent fewer than the same period last year.

    As of October 7, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $84.25. This was unchanged from the previous week. The rate from PNW to Japan was $46.50 per mt, unchanged from the previous week.

    Fuel

    For the week ending October 11, the U.S. average diesel fuel price increased by 10.9 cents from the previous week to $3.586 per gallon, $1.19 above the same week last year. At $4.42 per gallon, California diesel prices are the highest since September 2012.

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