Market News & Headlines >> Low River Levels Crimp Grain Shipments to Gulf

Numerous barges have run aground on the lower Mississippi River and barge rates are soaring to historic highs, as drought has dropped inland waterways to levels not seen in decades, hampering already sluggish grain exports at the U.S. Gulf Coast, where some 60% of U.S. corn, soybean and wheat exports exit the country.

And with little rain in the forecast, conditions are expected to worsen. "The projections for the water levels are going down, which means this situation is going to get worse," Mike Steenhoek, executive director for the Soy Transportation Coalition told Reuters News Service on Friday. "Unless we get a significant amount of rainfall soon, this season is going to be a challenge."

Shipping lines have sharply reduced barge drafts so that vessels sit higher on the river, effectively cutting tonnage per barge by a quarter or more, shippers and traders told Reuters. Tow boats on the lower Mississippi are forced to reduce the number of barges per tow by nearly 40% to squeeze through drought-parched shipping lanes, they said. One barge shipper told Reuters that at least 10 boats had run aground south of Cairo, Illinois, in the past week while others were carrying less cargo.

The Mississippi River at the Memphis, Tennessee, gauge was at the eighth-lowest level on record on Thursday and was likely to challenge an all-time low set during the drought of 1988 by mid-October, according to a National Weather Service forecast. 

Forecasts now favor below-normal precipitation for the Midwest through at least Oct. 17. The NOAA’s 30-day climate outlook for October, updated on Friday, favors below-normal precipitation for the Midwest, the Delta and most of the Plains region.  

As of Monday, barge freight rates on the Mississippi River at St. Louis were trading for 2000%/2200% of tariff for this week and the week of Oct. 9, up from 1150%/1250% a week earlier, according to Reuters. Rates were at 1600%/1800% for Oct. 16-30 up from 1050%/1250% a week earlier.