According to the US Department of Agriculture, the price of transporting agricultural raw materials by barge has quadrupled since the end of August.
The bed of the Mississippi has fallen to levels not seen in several years after a long period of low rainfall, which is disrupting river transport to the Gulf of Mexico, a key axis for the US economy and exports. According to data from the United States Geological Agency (USGS), the depth of the legendary river in Memphis, Tennessee is shallower than it has been since the USGS published information about this region in 2011. This The situation is mainly due to the lack of rain, especially in the states of Kansas, Nebraska, South and North Dakota, where the Missouri, one of the main tributaries of the Mississippi, flows.
The US Army Engineer Division carried out emergency dredging operations to allow the barges to pass. “It is a very delicate period with the harvests in progress, the worst to face a very low level” of the river’s waters, explained Deb Calhoun, vice-president of the Waterways Council, which promotes the good management of waterways, dams and locks. The winter wheat harvest was in fact completed at the beginning of August and the corn harvest is in full swing, which increases, as every year, the quantities to be transported.
According to figures from the United States Department of Agriculture (USDA), about two-thirds of grain exported by sea from the United States was from the Gulf last year, most often after transport on the Mississippi. A barge can carry a volume equivalent to 15 rail freight cars and 60 semi-trailers, according to American Waterways Operators, which represents the industry. “At this time of year, you usually see 40 or more barges in a line, pushed by a tug”recalled Deb Calhoun. “But right now it’s more like 24 or 25 at a time, depending on the level of the river.”
“We are in the process of excluding ourselves from the export market with these prices”
“At this point, we are just hoping very much that the rain will come”, she added. Some precipitation was expected this weekend in Arkansas, Tennessee and Mississippi. “The low level of the Mississippi will clearly affect exports”, warns Virginia McGathey, of McGathey Commodities Group. According to the USDA, the price of transporting agricultural raw materials by barge has quadrupled since the end of August. “We are in the process of excluding ourselves from the export market with these prices”says Michael Zuzolo, of Global Commodity Analytics and Consulting, according to which corn is particularly affected, with traffic by barge reduced by half.
The drop in Mississippi waters comes as production and yields of wheat, corn and soybeans are expected to be lower than expected, according to the USDA. The ministry notably revised its estimate for the wheat harvest down 7% on Wednesday, compared to its previous forecast, published in September. Winter wheat suffered in places from persistent drought, particularly in Texas, Oklahoma, Nebraska, Kansas and Colorado, which account for more than 50% of US production.
Rocks that have become apparent
According to the analyst, due to the disturbances on the Mississippi, the market is currently under tension, and in certain regions, the spot prices (for immediate delivery) of agricultural commodities are significantly lower than those of futures contracts (for immediate delivery). deferred), for lack of outlets. “And it will start to affect the middle of the country, which is not close to waterways, simply because storage will become more and more tense because it is not going to export by river”he explains.
This bad patch is reminiscent of a similar episode that occurred in 2012 and evokes, for some, a historic crisis in 1988. In 2012, says Deb Calhoun, rocks had become apparent with the drop in the level of the water, preventing the circulation of ships. It had taken the intervention of the US Army Engineer Division to blast those rocky points and clear the way. “We are not there this year”she says. “But if the rain doesn’t come and everything stops, we will study the possibility of releasing water from Missouri or from northern reservoirs.”