Corn and Soybean Transportation Landed Costs Up From 2017

This article has been reprinted from the June 14 USDA Grain Transportation Report.

First quarter 2018 transportation costs for shipping corn and soybeans from Minneapolis, MN, through the Gulf and the Pacific Northwest (PNW) to Japan, increased from last year.

Year-to-year transportation costs for shipping corn and soybeans were up moderately for each route during the first quarter (see tables 1 and 2).

Higher trucking, barge, and ocean rates caused the increase in the cost of shipping from the Gulf, while higher trucking and ocean rates pushed year-to-year PNW transportation costs higher (see table 1).

Ocean rates increased as demand for grain and other minor bulk products rose during the latter part of the quarter (April 19 2018 Grain Transportation Report (GTR)).

Total landed costs for shipping grain from Minnesota to Japan increased from year to year as well.

U.S. Gulf Costs: Year-to-year transportation costs for shipping grain from Minneapolis to Japan from the Gulf increased 13 percent for corn and 15 percent for soybeans (see table 1).

Higher year-to-year costs for shipping grain from the Gulf were caused primarily by increasing trucking, barge and ocean rates.

Year-to - year trucking rates for moving grain from Minnesota to local grain elevators increased 25 percent—the third highest rate on record.

Trucking rates increased due in part to higher year-to-year diesel prices.

During the first quarter of 2018, farm values for corn and soybeans shipped from the Gulf to Japan decreased slightly from year to year.

The decrease, however, did not significantly affect total landed costs. Transportation costs for shipping corn and soybeans accounted for 48 and 25 percent of the landed costs in the Gulf, which is above the level of landed costs for the same time last year (see table 1).

Rail’s share of the landed costs was the same from last year for each grain. However, the barge and ocean share of total landed costs for each grain increased from last year.

First quarter Gulf exports of corn decreased 32 percent from last year, accounting for 54 percent of total corn exports. First quarter Gulf soybean exports decreased 16 percent from last year, but accounted for 57 percent of total first quarter exports of soybeans (April 12, 2018 GTR).

Pacific Northwest Costs: Total transportation costs from Minneapolis, MN, via the PNW to Japan, decreased 1 percent for corn and soybeans from quarter to quarter (see table 2).

Quarter-to-quarter rates were down slightly for trucking and ocean shipping.

Due to higher trucking and ocean rates, year-to-year transportation costs for shipping grain from the PNW to Japan increased 7 percent for corn and 9 percent for soybeans.

Compared to last year, PNW rail rates were unchanged for corn and soybeans.

First quarter total landed costs in the PNW increased 4 percent for corn and 3 percent for soybeans from quarter to quarter, due to higher farm values.

Higher transportation costs pushed year-to-year landed costs up 2 percent for corn and 1 percent for soybeans (see table 2).

First quarter transportation costs for grain shipped through the PNW accounted for 41 percent of the total landed costs for corn and 21 percent for soybeans, which is a slight decrease from the previous quarter for each Total first quarter corn exports in the PNW reached a record 4.5 mmt, up 24 percent from last year and accounting for about 33 percent of total corn exports (April 12, 2018 GTR).

PNW soybean exports increased 10 percent from last year as demand from Asia remained steady.

Soybean exports through the PNW accounted for approximately 27 percent of total soybean exports during the first quarter