On behalf of Illinois corn farmers, IL Corn is monitoring both the river and rail system delays, though quick solutions are hard to come by.
Low Water Levels
The Mississippi and Ohio Rivers are vital for Illinois farmers’ global competitiveness, and right now the low water levels due to drought conditions are causing major transportation delays.
Barges cannot carry as much grain when water levels are low or they risk running aground in shallow water. The current low water levels causing reduced tow sizes and reduced bushels of corn per barge have created a slowdown of up to two days, according to the American Commercial Barge Line. Less product sold and delivered means each trip down the river gets more expensive; farmers pay that price.
Today, barges traveling south of St. Louis have been reduced to a 9-foot draft from a typical 12-foot draft and tow size has been reduced by at least 30 percent. As a result, the cost of barge freight is currently four times higher than in the fall 2023.
2024 is the third year in a row for a low water situation to impact grain flows on the river system.
Rail Disruption
USDA AMS reports that BNSF and UP rail lines have stopped all grain shuttle trains to Mexico due to ongoing congestion and a growing backlog of loaded trains.
Illinois is the top origin for corn rail movements to Mexico. In 2023, about 40 percent of all U.S. rail movements of corn to Mexico originated in Illinois. From January to September 2024, that number is 42 percent.
BNSF and UP stopped issuing permits for grain shuttle trains destined for Mexico in response to delays that have stranded equipment in Mexico. The additional restrictions apply only to grain.
UP reports that grain shuttle trains to Mexico are taking 20 percent longer to make a round-trip than the same time last year. UP also reports they are sitting on 18 grain shuttle trains due to delays.
Potential Dock Workers Strike
The contract between the International Longshoremen’s Association and the U.S. Maritime Alliance expires on September 30, and a new agreement has not yet been reached. If the port workers strike, the impact would not likely be felt by bulk shipments of commodity corn and soybeans, says Ag Web’s Jim Wiesemeyer. However, any ag products shipped via containers could feel an impact from the disruption.
Chilled and frozen meats, eggs, and other livestock products exports – typically shipped in containers – will probably be impacted and that market disruption will eventually be felt by grain farmers.
This issue continues to unfold.
