Billion Dollar Disaster? U.S. Grain Shipments Halted

Drought Stalls Grain Shipments on Mississippi River System

By Joe Dales, Farms.com

 The most severe drought in over 50 years is having additional downstream consequences as agricultural grain elevators along the Mississippi River System are facing closure as the water levels have reached record lows.  The barges that transport grain and other bulk agriculture commodities are not able to go through the shallow waterways and at the height of the harvest; this may lead to a billion dollar problem.

All along the vast river transportation system the barges are at a standstill. These large vessels need to sit in at least nine feet of water and the river is not nearly deep enough to facilitate that requirement. The Port of Lake Providence Channel is only around four feet deep this month and normally handles a usual fifty barges in the Chanel during this time of year, while today there are only ten occupying the recently closed port.

With major Mississippi ports being closed, this spells bad news for Bunge North America as their grain elevator is located in Lake Providence which can store about a million bushels of grain. Doug McNeely, District Manager at Bunge North America states, “we are really faced with a dire situation, we’ve got the river at near record lows here at the Mississippi River.”

With prices the best they’ve been in years, getting the product to market is a huge dilemma.

At harvest time, all of the grain elevators along the Mississippi River System are at maximum capacity, so the grain must move and farmers need to harvest, they need to deliver grain and contracts have already been signed. There is a short window time of about four to six weeks in which the grain needs to move in, to keep up with the harvest. As a response Congressmen Rodney Alexander and Senator Mary Landrieu announced their arrangement with the Army Corps of Engineers for a private dredging vessel to come in the next few weeks to dredge some of the channels to an appropriate depth of nine feet. Even with the help from the government there is going to be substantial challenge and loss. The low water levels in the Mississippi River are pegged to be a billion dollar loss.

As the drought continues to destroy and reduce corn and soybean yields throughout the Midwestern United States, the grain industry needs the Mississippi River transportation system to help deliver the corn and soybeans that are produced meeting world market demands.  It looks like only Mother Nature will be able to fix the water level of the rivers.