Race Against Winter

The northern sections of the Mississippi River are shutting for winter. Meanwhile low water levels has created a 100-ship backup downstream.

Bloomberg reports Grain Shippers Slowed by Mississippi River Drought Also Race Against Winter

While it's normal that barges stop moving each winter when the river freezes, the low water levels have left more than 2,000 barges downriver waiting to pass sections near Stack Island, Mississippi, and Memphis.

"There's always this race to get something unloaded in the northern areas -- Iowa, Wisconsin, Minnesota -- and have it back before the drawbridge closes behind you due to cold weather and ice accumulation," said Mike Steenhoek, executive director of the Soy Transportation Coalition. "That becomes all the more tricky when the river isn't functioning as efficiently as normal." 

Shippers need the barges to get up north to drop off fertilizer and pick up one last load of corn or soybeans before heading south for winter. If they can't, thousands of bushels will be stranded unless space can be found on more-expensive trains to the Pacific Northwest or the Gulf Coast, or until spring.

It doesn't help that the corn and soybean harvests are lagging behind last year's pace. Corn is just 20% harvested as of Oct. 2, and soybeans 22%.

There are two results if barges are slower to get upriver, according to Peter Meyer, Platts head of Grain and Oilseed Analytics. "The first is that barge freight goes way up, as we are seeing, it's just skyrocketing. The second one is that supplies get backed up upriver and this could not happen at a worse time now that we are in the middle of harvest."