Request for contacting Congress about Mississippi River
In total, it is projected that approximately 300 million bushels of grains and oilseeds worth $2.3 billion would be delayed in reaching intended markets during the two-month period of December 2012 through January 2013 if Mississippi River navigation is disrupted. Unfortunately, the impact already is being felt, as average freight rates for Panamax vessels needed to ship grains and minerals to foreign buyers on Nov. 30 declined for the fourth straight day – reflecting reduced cargoes available for export to Asia and other foreign markets. Reduced supplies in export positions would pressure farm prices and erode the United States’ ability and reputation as a reliable supplier of agricultural products to serve foreign buyers, which is integrally important to U.S. and global economic growth, domestic jobs and global food security.
Equally important is the role that the Mississippi River plays as an integral transportation artery for fertilizer and other critical farm inputs needed to maintain the United States’ abundant and efficient agricultural production. For instance, fertilizer terminals from Cairo, IL, northbound that are dependent upon sourcing product via barges will be shut down completely if navigation is impeded. That potentially would disrupt delivery of more than 500,000 tons of fertilizer, which constitutes 30 to 60 percent of the fertilizer needed by U.S. farmers for spring planting. Farmers also could experience increases in fertilizer prices reflecting higher transportation costs.
Losing access to efficient, low-cost barge transportation also would affect U.S. farmers and agribusinesses adversely through increased transportation costs. Barges provide a competitive alternative that discipline the rates charged by other modes, particularly rail. In addition, it would be neither feasible nor cost-effective to divert agricultural commodities to truck and rail, given capacity and routing constraints. A single dry-bulk barge – the type typically used to transport grains, oilseeds and fertilizer – can haul 1,750 tons of product, compared to 110 tons in a bulk rail car and 25 tons in a truck trailer. The impact of Mississippi River navigation disruptions on prices paid to farmers could be significant; one need look only to the precipitous decline in basis levels – the difference between futures and cash market prices – following Hurricane Katrina in 2005 to see the devastating impacts that disruptions in inland waterway and port transportation can have on producers reliant on marketing their commodities to barge-loading facilities.
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