ANKENY, Iowa (RFD-TV) — Tight grain storage is adding pressure on transportation networks this fall. Supplies are exceeding available storage for the first time since 2016, which is pushing more grain onto railroads, highways, and river systems.
Mike Steenhoek with Soy Transportation Commission joined us on Friday’s Market Day Report with his outlook on current grain strains on stocks and transportation lines. In his interview with RFD-TV News, Steenhoek explained how grain transport experts prepared for a large grain crop and where logistical backlogs remain.
“One of the things you never want to end up doing is attaching a garden hose to a fire hydrant, and that’s somewhat of the area we find ourselves in within agriculture,” Steenhook said. “You’ve got this very abundant crop, but then, sometimes you can have what’s analogous to a fire hydrant that’s providing this significant amount of volume, but sometimes you have constrictions — sometimes that can be with our supply chain, but it can also be things like a lack of international demand. So there’s this backup. You’re not able to move the product as efficiently as you intended, so things get backed up.”
Steenhoek said added pressure is worse in some regions than others due to a general dip in international demand for U.S. grains — particularly areas where there is less demand for grain feedstocks and producers historically relied on international trade.
“That’s one of the things we’re witnessing, particularly in certain areas of the country right now, where because you don’t have this strong demand pull — and certainly it’s gotten better over the last month with the news coming out of China and some of the shipments that have occurred — but we still don’t have as strong of a demand pull as what we normally would expect and what we experienced,” he said. “So what’s happened is farmers are putting more crops in storage ... so you’re seeing more of a backup that’s certainly occurring.”
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