By Andi Anderson
For the fourth consecutive year, historically low water levels on the Mississippi River are hurting U.S. farmers by raising transportation costs and limiting access to global markets.
Nearly half of all U.S. corn, soybean, and wheat exports move along this river system, making it one of the nation’s most critical trade corridors.
In a new Market Intel report, American Farm Bureau Federation Economist Daniel Munch warned that the drought-driven decline is putting significant pressure on farm income.
“Over the past five years, an average of 65 million metric tons of bulk agricultural product traveled by barge to terminals near New Orleans, where shipments were loaded onto ocean vessels bound for global customers,” Munch wrote.
The problem is that low water forces barges to carry lighter loads, reduces tow sizes, and drives up per-ton costs. With harvest underway, this adds further strain on prices and risks eroding the U.S. cost advantage in global grain markets.
Barges traditionally save shippers an estimated $7–9 billion annually compared to rail or truck, with one 15-barge tow carrying as much as 200 rail cars or over 1,000 trucks.
As of late September, the Army Corps of Engineers reported the Mississippi River at St. Louis had dropped 22 feet in less than two months, while Memphis gauges fell to -5.5 feet. The U.S. Coast Guard imposed new draft and tow restrictions, slowing shipments further. USDA data shows grain movements southbound plunged 79% in just over a month, from 2.4 million short tons to 502,000.
While barge rates remain below record highs from earlier droughts, they are still well above normal. Munch noted that local buyers often lower bids to offset rising barge costs, weakening the basis and reducing farmer returns. “If river stages continue to fall through October, rates are likely to climb closer to previous drought-year highs,” he said.
With Brazil and Argentina ready to fill export gaps, U.S. farmers risk losing sales abroad while facing steeper discounts at home. Unless rains arrive, low river levels could extend financial stress deep into the harvest season.
Photo Credit:gettyimages-giovanni1232
Categories: Michigan, Business, General, Weather