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Grain Supply Chain Threatened by Low Mississippi River

River is approaching low water levels not seen in more than three decades, doubling prices to ship goods

2 Lisa Selfie December 2020 Headshot

Limited rains across the Midwest and South have dropped the water level on the Mississippi River to levels too shallow for many barges to effectively navigate.

The Wall Street Journal reported sections of the river are approaching low water levels not seen in more than three decades.

Prices to ship goods have more than doubled in a matter of weeks. Barges are grounding on sandbars in unprecedented numbers and many ports and docks no longer have water deep enough for commercial boats to safely reach them.

Reliable, less expensive method to ship traditionally

Largely unaffected until now, barges have remained a relatively inexpensive and reliable way to move product across the country, and especially to export ports.

According to the American Farm Bureau, studies have shown barges can provide transportation at a tenth of the cost of rail and a sixteenth of the cost of trucking when available.

The new limitations on this cost-effective and efficient transportation mode because of dangerously low water levels in the Mississippi River is especially problematic during the height of harvest season, when farmers are looking to move grain to storage facilities.

Barges move 47% of all U.S. grain destined for export

Waterborne transportation accounts for about 7% of all U.S. freight movement annually. When broken down more specifically to grain movements, this share increases.

According to USDA’s modal share analysis of grain transportation, between 2015 and 2019 (the latest available data points) barges consistently moved around 13% of all U.S. bulk grain and 47% of all grain destined to export markets.

Barge transportation has moved an average of 70 million tons of grains destined for export (47% of total), rail has moved an average of 55 million tons (37% of total) and truck about 24 million tons (16% of total).

Given the large role of foreign markets in providing revenue to U.S. farm businesses, even small disruptions to barge efficiency could have rippling effects on producer income, noted the American Farm Bureau.

Grain transportation methods are affected by destination and type

Feed & Grain's recent infographic, How Grain Moves Throughout the U.S. from Managing Editor Steven Kilger shows most grain the U.S. produces is also used here.

Around 443.8 million tons are shipped to domestic locations, almost three times the amount that is exported, 130.3 million tons.

Much of that domestic use is taken up by the U.S. largest crop, corn. Domestic transportation of corn is 330.6 million tons, while only 46.4 million tons are transported for export.

Unsurprisingly, grain being shipped domestically is primarily transported by truck. Of the 383.3 million tons of grain moved by the truck grain shipping industry, 364.7 million tons of grain to domestic locations and just 18.5 million tons for export.

The least amount of grain shipped by barge, though that makes sense given the need for a waterway large enough to accommodate barges.

Barge grain transportation is the opposite of grain shipped by truck. The grain is primarily bound for export, 61.8 million tons. Only 2.5 million tons of grain transported by barge will be used domestically.

Rail is somewhere between truck and barge grain transportation. It moves 126.5 million tons annually, and the destination is a bit more evenly split, 50 million tons are loaded for export and 76.4 million tons will be used domestically.

To see the entire infographic as originally published, click here.

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