Low river levels cause concern

ANKENY, Iowa — While baseball fans are eying a World Series title and football fans hope for a Super Bowl victory for their favorite teams, Midwest farmers are facing a reoccurrence of a not-so-positive event — diminished water levels on the Mississippi River that could hinder movement of grain during prime shipping season on one of the country’s major inland waterways.

“We are experiencing a three-peat of the low water conditions that we had in 2022 and 2023,” said Mike Steenhoek, the executive director of the Soy Transportation Coalition, based in Iowa.

The STC is made up of the American Soybean Association, the United Soybean Board and 13 state soybean boards that represent some 85% of total U.S. soybean production.

Low rainfall levels throughout the Midwest in the late summer and early autumn have caused water levels on the upper and lower Mississippi, as well as the Illinois, Missouri and Ohio rivers, to drop.

“Since about mid-July, there’s been a real scarcity of precipitation throughout the Midwest and the whole land area that feeds into the Mississippi River watershed. That includes the Ohio River, the Illinois River and the Missouri River,” Steenhoek said.

“We are slightly above where we were at this time last year, but that’s not a consolation prize because 2023 was a low water event.”

Steenhoek said the low river levels come at an especially important time for river shipping.

“This is the real critical period. November is really the high month for grain shipments, but there are significant volumes moving in October, November, December and early January,” he said.

“When our harvest in the Midwest comes online, we really need to have that supply chain well positioned to accommodate it. Unfortunately, that is not happening right now.”

One of the negative impacts of the low water levels is pressure on barge freight rates, and Steenhoek said those costs could be an additional pain for farmers already facing low commodity prices and high input costs.

“When your supply chain is not operating at full throttle, the metaphor I use quite frequently is that you are attaching a garden hose to a fire hydrant,” he said.

“You have this big volume of soybeans and corn coming online, but you don’t have a transportation system that can fully absorb it. You have these inefficiencies that are created and what that does is it puts upward pressure on barge freight rates.

“What usually happens in agriculture is when there is a transportation cost increase, those costs are not usually passed on to the customer. It is not absorbed by the shipper.

“It is usually passed on to the farmer in the form of a more negative basis. It’s one more thing when a lot of things are encroaching on a farmer’s wallet right now.”

Steenhoek said barge operators are coping with the lower water levels by limiting the amount of grain loaded onto each barge and by limiting the number of barges in a single tow.

Tows on the lower Mississippi tend to be larger than tows on the Mississippi River above St. Louis, due to the lock system on the upper section of the river.

“Barge companies right now are having to respond by limiting the tonnage that they put in an individual barge due to the channel being more shallow,” Steenhoek said.

“There’s a concern that if you load to capacity, you will experience a grounding or, at a minimum, scrape the bottom of the shipping channel. Then, because the channel is more narrow because of less water, your barges are having to resort to attaching fewer barges together.”

While rain is the obvious answer to what will solve the problem and bring river levels up, Steenhoek said adding resiliency to the supply chain and also being proactive about river maintenance can help minimize the negative effects.

“It’s going to be precipitation that is going to pull us out of this dilemma. But there are things that can be done to help mitigate the consequences, like proactively dredging instead of being reactive in dredging, not waiting for the problem to fully materialize before you are dispatching dredging vessels to attend to a particular area in which you are having sediment build up,” he said.

“It’s not going to fully overcome the challenge, but it’s certainly a way to help take some of the pain and discomfort away.”