Wheat Freight Costs Challenge Stronger Japanese Export Outlook

Higher ocean freight rates continue adding pressure to U.S. wheat exports despite stronger demand projections.

Aerial of cargo ship carrying container for export cargo from cargo yard port to other ocean concept smart freight shipping ship front view_Photo by Yellow Boat via AdobeStock_1601867486.jpg

Aerial of a cargo ship carrying a container of exports.

Photo by Yellow Boat via Adobe Stock

NASHVILLE, TN (RFD NEWS) — Transportation costs remain a major hurdle for U.S. wheat moving to Japan, even as USDA projects stronger wheat exports this marketing year.

USDA’s Grain Transportation Report shows freight accounted for 35 to 39 percent of first-quarter landed costs from Kansas and North Dakota.

Converted to bushels, transportation costs ranged from about $2.65 per bushel for Kansas wheat moving through the Pacific Northwest to $3.56 per bushel for North Dakota wheat shipped through the Gulf. Total landed costs ranged from about $7.44 to $9.04 per bushel.

Ocean freight increased from a year earlier, rising 14 percent through Pacific Northwest routes and 19 percent through Gulf routes. Higher bunker fuel costs and strong Asian shipping demand contributed to those increases.

Even with higher freight pressure, lower farm values kept total landed costs below last year across all four routes. North Dakota wheat moving through the Gulf remained the most expensive route.

USDA projects 2025/26 wheat exports near 910 million bushels, up 10 percent from the previous year, making transportation costs and export competitiveness increasingly important.

Farm-Level Takeaway: Stronger wheat exports help demand, but high freight costs continue to limit producer competitiveness in overseas markets.
Tony St. James, RFD News Markets Specialist

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Dairy farmers are expected to face strong output and export gains, but lower prices and tighter margins will persist into next year.
RFD-TV Markets Expert Tony St. James breaks down the state of agribusiness and harvest progress across each region of the United States for the week of Monday, September 22, 2025.
With the latest detection just across the border, animal health officials on both sides are intensifying efforts to contain the outbreak before it spreads further north.
The USDA NASS report also confirms lower August placements.
Producers and processors should watch trade policy closely as tariff impacts ripple through seafood markets.
While symbolic, the WTO’s youth hackathon reflects growing calls for creative approaches to food trade and security, with potential implications for reducing losses, expanding biofuel markets, and stabilizing grain flows.