This article has been reprinted from the June 6 USDA Grain Transportation Report.
The first quarter of 2019 shows transportation costs for shipping corn and soybeans, from Minneapolis, MN through the Gulf and the Pacific Northwest (PNW) to Japan, decreased compared to the same period in 2018.
Year-to-year transportation costs for shipping corn and soybeans were down slightly for each route (see tables 1 and 2).
A large drop in first quarter trucking rates, coupled with lower ocean freight rates, caused the decrease in the cost of shipping from each region.
Ocean rates decreased as shipping activity slowed during the holiday seasons and the demand for coal became stagnant (April 25, 2019 Grain Transportation Report (GTR)).
Year-to-year landed costs were up slightly for corn but were down for shipping soybeans from Minnesota to Japan.
U.S. Gulf Costs: During the first quarter, transportation costs for shipping grain from Minneapolis to Japan through the Gulf decreased 2 percent for corn and 3 percent for soybeans, compared to the same period last year (see table 1).
The decrease in costs was caused primarily by lower trucking and ocean rates.
Year-to-year trucking rates for moving grain from Minnesota to local grain elevators dropped 37 percent, to one of the lowest on record.
Trucking rates decreased partly due to lower diesel prices.
First quarter transportation costs for shipping corn and soybeans accounted for 46 and 26 percent, respectively, of the landed costs in the Gulf.
That reflects a cost decrease for corn and a slight increase in cost for soybeans, compared to last year (see table 1).
First quarter total landed costs for shipping corn and soybeans through the Gulf to Japan ranged from about $252 to $422 per metric ton (mt) (See Figure).
Compared to last year, this is a 3 percent increase for corn and a 9 percent decrease for soybeans.
Increased farm values led to the increase in corn landed costs, while lower farm values caused soybean landed costs to decrease (See Table 1).
The rail and ocean shares of the landed costs remained unchanged from last year for each grain.
Barge’s share of total landed costs for corn and soybeans increased slightly from last year.
First quarter Gulf exports of corn decreased 5 percent from last year and represented 61 percent of total corn exports.
First quarter Gulf soybean exports decreased 2 percent from last year, representing 58 percent of total first quarter exports of soybeans (April 18, 2019, GTR).
Pacific Northwest Costs: Quarter-to-quarter transportation costs, for shipping grain from Minneapolis through the PNW to Japan, decreased 8 percent for corn and 7 percent for soybeans (see table 2).
Quarter-to-quarter rates were down for trucking and ocean. Rail rates shipping grain to the PNW remained unchanged from quarter to quarter.
Lower trucking and ocean rates also pushed year-to-year transportation costs for shipping grain from the PNW to Japan down 5 percent for both corn and soybeans.
First quarter transportation costs for grain shipped through the PNW accounted for 38 percent of the total landed costs for corn and 22 percent for soybeans, a slight decrease from the previous quarter for each.
These total landed costs were also below last year for corn but above last year for soybeans.
First quarter total landed costs for shipping grain from the PNW to Japan ranged from about $218 to $400 per mt (See Figure), down from quarter to quarter for corn and soybeans.
Year-to-year landed costs increased 2 percent for corn but dropped 9 percent for soybeans.
This is due mainly to lower trucking rates and farm values (see table 2).
First quarter PNW corn exports totaled 2.8 mmt, down 38 percent from last year, and accounting for 25 percent of total corn exports (April 18, 2019, GTR).
First quarter PNW soybean exports reached 3.3 mmt, down 3 percent from last year, and accounting for about 27 percent of total soybean exports during the first quarter.