Grain shippers moving this fall's harvest face higher freight rates by rail, barge and ocean vessel, driven largely by sustained increases in fuel costs, according to a quarterly update in USDA's Grain Transportation Report.
The Agricultural Marketing Service feature said third-quarter 2026 volumes stayed high across all three modes, supported by last year's record harvest and strong exports. This year's crop is smaller than last year's but still well above average, which the agency said points to another season of strong transportation demand.
USDA's October Crop Production report forecasts 16.03 billion bushels of corn and 4.56 billion bushels of soybeans for the 2026-27 marketing year. The corn crop would be the second largest on record and the soybean crop a record. Fall grain supplies, including Sept. 1 stocks and new corn, soybean and sorghum production, are expected to total 25.38 billion bushels, 2% below last year but 4% above the three-year average. Iowa leads the gains over average at 290 million bushels, followed by Minnesota at 175 million bushels.
Diesel sets a record
The U.S. average diesel price reached a record $6.529 per gallon for the week ending Sept. 21, nearly $2 higher than in early July. Prices fell 25 cents through the week ending Oct. 19 but stayed above $6. The report attributed oil price volatility this year to disruptions in the Strait of Hormuz.
The president signed an executive order Oct. 5 temporarily allowing red-dyed diesel in highway vehicles and deferring federal tax through year-end, and more than a dozen states have waived or eased their own dyed-diesel restrictions. The Energy Information Administration projects Brent crude will average $105 per barrel in the fourth quarter and diesel $5.81 per gallon, up 24 cents from the third quarter.
Bunker fuel is climbing too. Very low sulfur fuel oil averaged $862.73 per metric ton across 20 major ports in September, up 65% from a year earlier, according to Ship & Bunker data cited in the report.
Rail surcharges hit new highs
Third-quarter grain carloads totaled 382,846, up 32% from the third-quarter average. The report said the main driver of higher rail rates is the fuel surcharge, not tariff changes. Class I fuel surcharges averaged a record 61 cents per mile in July, eased to 48 cents in August and September, and stand at 59 cents in October. November's surcharge will top the July record because most railroads base surcharges on diesel prices from two months earlier.
Most corn tariff rates rose $200 to $225 per car in October. Service has been generally adequate but slower than last year. BNSF delayed an average of 11 grain unit trains per day for the week ending Oct. 2, its highest weekly total since April 2025, which the report linked to derailments near Minot, North Dakota, and Des Moines, Iowa, and severe weather near Lincoln, Nebraska.
Secondary-market shuttle prices are falling. BNSF October shuttles averaged $1,100 per car on purchases from May to September but just $150 per car in the latest week, a sign most shippers have near-term capacity covered.
Barge rates outrun seasonal norms
Downbound grain through Mississippi River System locks totaled 7.8 million tons in the third quarter, up 32% from average and the highest in six years. Rates rose more than the usual harvest increase, as low water on the Mississippi added capacity and logistical pressure for a fourth straight year. St. Louis spot rates averaged $25.67 per ton in the third quarter, up 34% from last year, and stood at $26.87 for the week ending Oct. 13.
Ocean freight at four-year highs
The third-quarter Gulf-to-Japan rate averaged $72.76 per metric ton, the highest quarterly average since the second quarter of 2022. The rate reached $76.75 for the week ending Oct. 15, 35% above a year earlier. A 4% larger global dry bulk fleet may slow increases, the report said, but China's resumed purchases of U.S. soybeans, strong harvest loadings, bunker costs and possible Panama Canal restrictions could push rates higher.
Soybeans lead exports, wheat lags
Soybean export commitments reached 26.2 million metric tons as of Oct. 15, 81% ahead of last year, with 19.1 million metric tons unshipped, more than double a year ago. Corn commitments of 22.19 million metric tons trailed last year by 34%, as relatively high U.S. prices slowed demand.
Wheat is the weak spot. USDA forecasts 2026-27 wheat exports at their lowest since 1971-72, reflecting drought, the smallest planted area since 1919 and competition from Canada, Australia and Argentina. Hard red winter wheat commitments are down 63% from a year ago.
