Streams flowing slow and shallow

For the week ending November 12, barged grain movement in the United States was down one-third from last year at this time. Oceangoing grain cargoes from US Gulf Coast ports are down roughly 40 percent compared to 2021.

Upstream sources (in this context literal as well as figurative) are not nearly as sparse. It has been a spotty and in some places tough harvest, but the late-season forecast for US corn production is down eight percent from 2021 and soybeans are down less than four percent.

This year’s drought across the vast Missouri, Mississippi, and Ohio rivers watersheds certainly constrained this season’s US agricultural production. The secondary impact on riverine freight has been the worst since at least 1988. Bloomberg recently put these slow flows in global perspective:

This year has seen rivers across the US, Europe and China shrinking amid scarce rains and high heat. The vaunted Colorado River, caught in the Southwest’s worst drought in 1,200 years, has dwindled to the point where its major hydroelectric dams are in danger of shutting down, threatening the booming desert cities that rely on it. In Argentina, the Parana River fell to its lowest levels in 77 years, crimping crop exports down the waterway, while Europe’s Rhine and Danube almost saw traffic halt. And even as a powerful monsoon season flooded Pakistan, drought in China dropped the Yangtze River low enough that glittering Shanghai had to turn off lights to save power.

From mid-October to mid-November river levels across the interior United States were historically low. For most of thirty days, the water level at Memphis was eight to more than ten feet below median. The Mississippi River is highly engineered. But it has required constant dredging to keep a reduced number of lighter-loaded barges moving downstream

Over the last several days lower Mississippi River water levels have recovered slightly. This morning the river gage at Memphis is one-foot below median, compared to over eight-feet negative just last week. The number of grain barges unloaded at New Orleans is up over one-third compared to the first week in November. Slowly we turn…

It will, however, take considerable time — and continued precipitation — to decongest the long queues of barges that have accumulated during the low drafts and slow flows of the last several weeks (see map below). Earlier this month industry insiders pointed to several queues of “over 100 vessels towing over 2,000 barges waiting to pass through different points along the river.” Starting tomorrow, November 19, managed discharges on the Missouri River will begin to be reduced. The extended forecast for precipitation across several critical watersheds is especially uncertain.

Downstream demand for grain is persistent… even insistent. Upstream production can vary dramatically by season and region, but this year global harvests have not significantly reduced overall food availability. Midstream distribution has, however, been disrupted and constrained (not just in the United States). Distribution constraints increase costs (more). In just the last week, the barge freight rate for some portions of the interior United States has been close to 150 percent higher than the three-year-average. Increased costs are reflected in increased consumer-facing prices which can seriously constrain affordability. (Please see the Global Food Security Index.)

In the case of the Greater Mississippi River watershed, recent distribution constraints have had mostly natural causes. Accidental and intentional impediments have also occurred, but these have had mostly incidental rather than systemic impacts. Right now there is a fair chance that natural and supply chain flows will recover enough to feed those able to buy (and pay those growing, processing, and transporting). But it is worth noting how we have been operating so close-to-the-edge of several impervious impediments.