Thanks to a mix of improving weather conditions and general seasonality, the price to move grain down the Mississippi River has fallen, according to Bloomberg, though river conditions still have a long way to go to get back to normal.
For the week ending Nov. 8, grain spot barge rates from St. Louis dropped 49% to $40.74 from the week-ago $80.12. Even so, that rate is some 145% above the year-ago rate, but well below the all-time record of $105.85 posted the week of Oct. 11.
A confluence of factors have pushed down the prices dramatically in just the past week. One of those factors is simply seasonality, according to Ben Scholl, President of specialty grain buyer Osterbur & Associates. The harvest is coming to an end, and so demand is starting to wane.
But more importantly, the area is finally starting to get some rain. According to Scholl, all the major segments of the river saw rain over the weekend, and more is on the horizon. There’s also Tropical Storm Nicole coming up through Florida and the East Coast that could possibly result in more rain in the Midwest, depending on its ultimate trajectory.
Although closures and dredging operations still disrupt the system daily, the USDA said recent rainfall has helped stabilize portions of the system. It said forecast models indicate rain will help water levels rise near Cairo, Ill., and Memphis, Tenn., in the next few weeks.
Illinois farmer Kenneth “Kenny” Hartman told Bloomberg that he relies solely on the Mississippi to ship his corn and soybeans, saying trucks and trains are not realistic alternatives. This year he saved extra bin space on his farm, which is about 25 miles from St. Louis, made some sales prior to harvest, and tried to haul as much grain as possible to elevators earlier than he usually would have. However, he said such workarounds have limits. He drove to one nearby elevator to find it closed about three hours earlier than normal because it was already full.
“When you start looking at the higher cost of fertilizer, the higher cost of seeds, the higher cost of fuel right now, it just compounds,” said Hartman, who has been farming since the early 1980s. “The profit isn’t what everybody thinks it is – and then the river situation just adds to that.”