October 7, 2022
Shipments of US cash crops halted due to traffic backlog at Mississippi River
Low water levels at the southern stretches of the Mississippi River has resulted in a commercial barge traffic backlog, stopping shipments of US cash crops like corn and soybeans as well as other commodities on the important waterway, Reuters reported.
The supply chain backlog has happened as corn and soybean harvesting, the two biggest cash crops in the US, ramps up. At the same time, inflation is surging due to tight global supplies, high demand, and a lack of food and fuel.
According to shipping sources, a trouble spot near Lake Providence, Louisiana state, that has been largely closed since late last week, was backed up for miles with about 100 tow boats hauling 1,600 barges.
They said the flow of grain to US Gulf Coast export terminals, where about 60% of US corn, soybean, and wheat exports leave the country, has been hampered by the closure of at least two other lower Mississippi sections.
To make the shipping channel deeper and enable the passage of some cargo, the US Army Corps of Engineers are dredging the river. However, shippers worry that without significant rain, the traffic jam will last well into the busiest time of the year for grain exports. Ahead of winter, goods like road salt are also transported north.
Merritt Lane, president and chief executive of barge operator Canal Barge Company, said Mother Nature hasn't been very helpful, and there's not a lot of relief in sight in the weather forecast.
As a result of lower cargo loads per barge and the narrowing of the navigable channel due to low water levels, towing companies have reduced the number of barges per tow by almost 40%.
Due to uncertainty about their ability to source enough grain, many US Gulf exporters have withdrawn their bids for corn and soybeans loaded in October and November, endangering already slow export sales.
One exporter said they can't commit to new sales at this time.