Low water conditions on the Mississippi River have led to several barges running aground, significantly impacting the crucial grain export season as it begins. The U.S. Coast Guard reported that these low water levels are hindering export-bound shipments of grain and oilseeds from the Midwest, making U.S. exports less competitive in a global market already saturated with supplies. This situation arises just as farmers prepare for a record harvest of soybeans and a large corn crop, with prices nearing four-year lows.
The Coast Guard has noted multiple groundings along the Greenville-Vicksburg sections of the river, prompting American Commercial Barge Line to warn customers of expected delays of one to two days due to reduced navigable space. Reports indicate that sandbars are becoming visible at the Memphis river gauge, with water levels forecasted to drop to -7.5 feet by September 18, down from last year’s levels.
Towing and draft restrictions are currently in place, limiting the number of barges that can operate and the volume they can carry. If conditions deteriorate further, additional restrictions may be implemented. As a result, barge rates have surged, making it more expensive for international buyers to source U.S. grain, with rates from the St. Louis area reported to be 65% higher than the three-year average.
Despite heavy rains earlier this growing season, which caused flooding in parts of the northwestern Midwest, abnormal dryness and drought conditions are now developing across the southern Plains and the Lower Mississippi Valleys. This flash drought situation exacerbates the challenges faced by U.S. exporters, diminishing their competitive edge due to increased transportation costs.
Mike Steenhoek, executive director of the Soy Transportation Coalition, emphasized that lower transportation costs have historically been a key factor in the U.S.’s success in the global market, and the current conditions further threaten this advantage.