Almost 60 percent of the grain that’s harvested right here in Indiana and across the Midwest moves down the Mississippi River system to the U.S. Gulf region for export. Since the inland waterways are experiencing back-to-back years of drought, it has been a major concern among farmers and the ag industry.
“For the Mississippi River, when you look at various spots, we’re at lower conditions now than we were on the same date last year,” says Mike Steenhoek, the Executive Director for the Soy Transportation Coalition.
The water levels along the Mississippi River are still at an all-time low near Memphis and set a record for the second straight year. The National Weather Service recently said the water level at Memphis fell to a record-low elevation of minus 11.5 feet. This year’s record is significantly lower than last year. In October 2022, the Mississippi dropped to minus 10.81 feet.
Several other records were set at various stops along the river system, including Cairo, Illinois, on the Ohio River, which was at a level of minus 4.5 feet. New Madrid, Missouri, recently dropped to minus 6.4 feet.
With both harvest season and export season in full swing, he says it’s an issue for those who highly rely on rivers, such as the Mississippi and Ohio, to transport grain, fertilizer and other commodities.
“Well, it’s ‘game time’ for agriculture, and this is the time where 80 percent of our exports occur between the months of September and February,” according to Steenhoek. “We need our supply chain to be operating at full throttle at this time of the year and unfortunately the river is not operating that way.”
Mike Steenhoek, Executive Director of the Soy Transportation Coalition. Photo: Hoosier Ag Today.
Due to the current water levels, restrictions have been placed on barges like what happened this same time last year.
“Out of the concern for a lack of channel depth, because there’s less water in the navigation channel, you’re more reluctant as a barge company to load as much freight—and soybeans in our case—on a barge because you’re concerned that it could actually scrape the bottom. So, you’re seeing barge companies resort to a 25 percent reduction on the amount loaded into an individual barge,” he says.
With barges taking on lighter shipments of grain, the price to ship that grain goes up, which Steenhoek says that price increase eventually gets passed down to the farmer.
“You’re seeing an excess of a 100 percent increase in large freight rates over the three-year average,” according to Steenhoek. “When something like that happens in agriculture, the costs are disproportionately passed on to the farmer in the form of a lower price or a more negative basis. We’re seeing evidence of that currently. We certainly saw that last year with low water conditions in 2022.”
