WJ Editorial: This Harvest, Farmers Face Transport Squeeze Play
When it comes to transport, U.S. ag exporters are getting squeezed from all directions this harvest season. In the United States, the International Longshoremen’s Association is threatening to shut down East and Gulf Coast ports if a new collective bargaining agreement isn’t reached with the U.S. Maritime Alliance (USMX), which represents port operators, by the end of September. The ILA leadership had a two-day meeting on September 5 where its wage scale committee proposed contract terms—and prepared its members for the possibility of a strike at East and Gulf Coast ports.
A strike wouldn’t close non-union bulk terminals in the Gulf, but if a strike takes place, changing vessel and cargo flows could affect Lower Mississippi River barge movements at the height of harvest season.
In August, the U.S. Department of Agriculture reported U.S. agricultural exports in fiscal year 2025 are forecast at $169.5 billion, down $4 billion from the revised forecast for FY2024. That’s due to lower prices, not lower volumes. The dollar value of soybean exports was projected to be down $1.5 billion to $22.9 billion, while corn exports were forecast to fall $900 million to $12.2 billion, as “lower unit values more than offset higher volumes in both crops.” In other words, farmers are sending the same or more volume than last year to the Gulf but getting less for it.
Meanwhile, in Canada, negotiations between Canadian rail unions and the two biggest Canadian rail operators are ongoing, with no word yet on a resolution. They’ve been talking since last year with no apparent break in the deadlock over working conditions. The Canadian government had to intervene at the last minute to force the parties to the table. The labor dispute has the potential to affect shipment of U.S. agricultural products into Canada.
To add to farmers’ woes, low water in the Lower Mississippi has driven barge rates up again. For the week ending August 27, barge rates originating in the mid-Mississippi area (between the Twin Cities and St. Louis) were $34.15 per ton, which is 9 percent higher than the same week last year and 42 percent higher than the three-year average, according to the USDA’s Grain Transportation Report. For freight originating in St. Louis, rates per ton were $24.62, 6 percent higher than the same week last year and 65 percent higher than the three-year average.
Mike Steenhoek, executive director of the Soy Transportation Coalition, said, “Unfortunately, recent and current rail challenges along with the retreating water levels on the Mississippi River are serving as an impediment to farmer profitability. This coincides with a projected large 2024 harvest.”
As always, barge companies are working closely with the Corps of Engineers, the Coast Guard and ports to coordinate dredging and minimize the challenges of low water. This low water season highlights once again the importance of barge transportation and the necessity of maintaining and improving lock and dam infrastructure, as well as making sure the Corps can provide dredging support for the middle and lower Mississippi and its ports.
