This article has been reprinted from the March 28 USDA Grain Transportation Report.
In 2018, fourth quarter transportation costs for shipping corn and soybeans from Minneapolis, MN through the Gulf, were unchanged from the previous quarter but were up from last year.
Pacific Northwest (PNW) transportation costs increased from the third quarter and last year.
Due primarily to higher rates for each mode of transportation, PNW transportation costs for shipping grain increased.
Trucking rates rose due, in part, to higher diesel prices and increasing demand for grain.
Barge rates for shipping grain decreased, as demand for barge services declined.
Ocean rates increased due to rising long haul coal trade, which boosted demand for minor bulk trade (see Grain Transportation Report (GTR), 2/14/2019).
Rail rates were up slightly from quarter to quarter and year to year.
Total landed costs for shipping corn through the Gulf and PNW to Japan were up from the previous quarter and last year for each route.
Landed costs for shipping soybeans through the PNW, however, were mostly down for each route (see tables 1, 2).
Fourth quarter farm values were higher for corn compared to the previous quarter and the past year.
Soybean farm values were down for the same period. U.S. Gulf Costs: Fourth quarter transportation costs for shipping corn and soybeans from Minneapolis through the Gulf to Japan were unchanged from quarter to quarter (table 1).
U.S. Gulf ocean rates increased 7 percent from the previous quarter, while trucking rates increased 15 percent for the same period.
Fourth quarter barge rates for shipping grain to the Gulf decreased 13 percent from the previous quarter.
An increase in ocean freight rates caused a 3 percent increase in year-to-year transportation costs for shipping corn and soybeans through the Gulf
Fourth quarter total landed costs for shipping corn and soybeans through the Gulf totaled $222 per metric ton (mt) for corn and $404 per mt for soybeans.
Quarter-to-quarter landed costs for shipping through the Gulf increased 2 percent for corn, due to higher farm values, while lower barge rates caused a slight decrease in the costs for soybeans.
Compared to last year, landed costs for shipping grain from the Gulf increased 7 percent for corn and decreased 4 percent for soybeans (see table 1).
Transportation costs from the Gulf to Japan represented 42 percent of the total landed costs for corn and 23 percent for soybeans during the fourth quarter, above the previous quarter and last year.
This is below the previous quarter and last year
Pacific Northwest Costs: Quarter-to-quarter transportation costs for shipping corn and soybeans, from Minneapolis through the PNW to Japan, increased 6 percent and 5 percent, respectively (see table 2).
Rates for shipping grain to the PNW were higher for each mode during the fourth quarter.
From quarter to quarter, rail rates for shipping corn and soybeans to the PNW increased 4 and 2 percent, respectively.
Year-to-year transportation costs for shipping grain to the PNW increased 2 percent for corn and 1 percent for soybeans because of higher rail and ocean rates.
Quarter-to-quarter total landed costs for shipping grain from the PNW to Japan increased 4 percent for corn but remained unchanged for soybeans.
Total fourth quarter landed costs ranged from $220/mt to $408/mt (see table 2).
Year-to-year PNW total landed costs increased 7 percent for corn but decreased 4 percent for soybeans.
Transportation costs for shipping grain to the PNW represented 41 percent of the landed cost for corn and 24 percent for soybeans, both above the third quarter and last year.
According to USDA’s Federal Grain Inspection Service, fourth quarter export inspections of corn jumped 82 percent from the previous year (see GTR 02/07/19).
Total fourth quarter inspections of corn to Japan reached 3.1 mmt, up 138 percent from 2017.
At the same time, corn shipments rebounded to Asia and South America.
Soybean inspections totaled only 13.6 mmt during the fourth quarter, down 47 percent from the previous year.
Shipments of soybeans destined to Japan reached .649 mmt, up 14 percent from 2017.
According to USDA’s World Agricultural Supply and Demand Estimates report in March, the forecast for 2018/19 corn exports is down 3 percent from February and the past marketing year.
Lower price competiveness and higher expected exports for South America moved the forecast for corn exports down during the 4 th quarter.
The forecast for 2018/19 soybean exports is unchanged from February and 12 percent below 2017/18.