Mississippi River Barge Freight Rates Climb on Lower Water Levels

Graphic: U.S. Department of Agriculture, Agricultural Marketing Service. Grain Transportation Report. August 31, 2023. Web: http://dx.doi.org/10.9752/TS056.08-31-2023

Bloomberg writer Tarso Veloso Ribeiro reported yesterday that, “The cost to transport America’s harvest from the Midwest to the rest of the world is soaring as shrinking water levels on the Mississippi River drive up barge freight rates — and the forecast for below-than-average rainfall offers no relief.

“Barge spot rates as of Aug. 29 in St. Louis are up 49% from last week and 42% from last year at $23.34 a ton. That’s up 85% from the past 3-year average, according to data from the Department of Agriculture released Wednesday.”

Ribeiro explained that, “The data comes just as the US prepares to begin its soybean and corn harvest, signaling another tough year for US farmers who already are struggling with drought and fierce competition from Brazil and Russia.

“Last year, extremely low water levels on the Mississippi River stranded more than 2,000 barges, crippling commerce on the vital waterway.”

The Bloomberg article added that, “Water levels on the Mississippi River, which carries more than 45% of US agricultural exports, have been dropping since June, restricting the amount of grain allowed on each barge.

“This led to a tightening of barge supply as more barges are required to transport the same amount of grain.”

Also yesterday, Dow Jones writer Kirk Maltais reported that, “Lower water levels on the Mississippi River since June are limiting the amount of grain that can be loaded on barges heading to ports, said the USDA in its weekly Grain Transportation Report. The USDA says that water levels are expected to keep falling in the coming weeks, which in turn will further limit the amount of grains barges can carry and thusly constricting the available amount of barges. ‘The tight supply has resulted in […]

Full article: farmpolicynews.illinois.edu