The prolonged low water levels of the Mississippi River are significantly impacting the barge transport of grain, limiting capacity and thereby reducing farmer profits, especially in the soy and grain markets.
Barge companies are now forced to limit cargas, impacting approximately 60% of U.S. grain exports. A 17% drop in grain transport was reported in a recent USDA report.
Transportation costs for barge shipments have sharply increased, with freight rates in St. Louis higher by 8% compared to last year and up 57% from the three-year average.
Farmers can't easily pass on transportation cost increases to consumers, as their exports are priced against international markets; any price increases can lead to a loss of competitiveness.
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