The Mississippi River is now facing its third year of declining water levels, impacting the transportation of ag goods.
Our good friend of Market Day Report, Mike Steenhoek says that those impacts are being felt in two major ways.
“Number one is the ability to put a lot of tonnage in individual barges, and then number two, the ability to attach multiple barges all together to form one single unit, and then you have the towboat pushing it from the back. And when you have low water conditions, it has an impact on channel depth and on channel width. And so you no longer can put as much tonnage per barge, because you’re concerned about scraping the bottom [or] even having a grounding. And then when you have less water, the shipping channel becomes more narrow, so you don’t have the luxury of attaching all these barges together to form one single unit,” he explains.
This comes as combines roll in fields across the country.
55% of U.S. soybeans are exported via the lower Mississippi and Steenhoek says that affordable transportation costs give U.S. soy a competitive global edge.
“We’re able to do it more efficiently than they are, because one of the reasons being is we’ve got this very efficient, maritime highway called the Mississippi River that can efficiently move product long distances to our export regions like the Mississippi Gulf,” he notes. “Well, when all of a sudden that efficiency is diminished due to low water levels, then all of a sudden that overall competitive advantage erodes as well.”
He went on to say that farmers have very few, if any, cost-efficient alternatives.
Shaun Haney joined RFD News to discuss the potential impact of the Trump-Xi summit uncertainty, ongoing agricultural trade talks, and why geopolitical developments could carry important implications for farmers and global commodity markets.
