This article has been reprinted from the June 27 USDA Grain Transportation Report.
Portions of the Midwest have dealt with bouts of severe weather, record rainfall, and flood conditions since midMarch, with few respites from the disruptions.
Water levels on the Mississippi River and its tributaries have risen to near-record highs, slowing barge grain traffic and resulting in closures along portions of the river system.
Railroad operations have been affected by flooding and washouts, but crews continue to make substantial progress restoring service.
This article describes some of the effects of the Midwest flooding on grain transportation, such as reduced and slowed shipments, and includes a summary of current river and rail operations.
It also briefly examines other impacts on agriculture, such as delayed crop progress and a reduction in next year’s corn crop, before concluding with an outlook on transportation and weather.
A Look at Impacts on Barge and Rail Transportation Barge: River levels on the Mississippi River have increased throughout the year, slowing barge traffic considerably.
Figure 1 shows 2019 river levels at St. Louis are well above-average and have been, at times, above 1993 levels.
The flood in 1993 brought the Mississippi River to many record levels, including a 49.6-foot reading at St. Louis on August 1 of that year.
This year, barge traffic was stopped at St. Louis on May 23, when the river gauge exceeded 38 feet.
River closures occur at certain gauges, set by the U.S. Coast Guard, U.S. Army Corps of Engineers, and River Industry representatives.
At the “Extreme High Water” stage of 38 feet and rising, the Mississippi River at St. Louis is closed until the gauge is below 38 feet.
On June 21-22, St. Louis was reopened when levels dropped close to the 38-foot threshold. However, by June 23, river levels rose enough to close the river again.
On June 26, river levels began to drop close to the 38-foot level, and barges were allowed through St. Louis with no restrictions for northbound vessels and unrestricted daytime southbound traffic.
However, during nighttime hours, southbound tows are limited to 6 barges.
Barge movements are restricted to daylight-only hours on the Mississippi River at Memphis, Vicksburg, and Baton Rouge.
Due to extreme flooding, the Arkansas River is closed.
So far this year, 14,191 barges of grain have been unloaded at ports on the lower Mississippi River, 17 percent below the 3-year average.
Year-to-date rail deliveries of grain to Lower Mississippi River Ports were 22,780 carloads, 117 percent higher than the 3-year average, indicating grain shippers have been substituting rail service for barge service.
Year-to-date tonnages of down-bound grain on the Upper Mississippi River (as measured by movements at Mississippi River Locks 27) were 4.0 million tons, 67 percent less than the 3-year average.
However, some Mississippi River barge tonnage losses have been softened by increases in Ohio River tonnages.
Year-to-date tonnages of down-bound grain on the Ohio River (as measured by movements at Olmsted Locks and Dam) were 5.9 million tons, 27 percent higher than the 3-year average.
Rail: Railroads also have dealt with poor weather and flood conditions for the past few months.
Despite these challenges, carriers continue to make considerable progress in restoring service.
As of June 24, two segments remain out of service for Union Pacific Railroad (UP), which said in a recent report, “up to eight subdivisions [were] impacted by flooding” and “water was eight feet above the rail” in spots.
This is a notable recovery from the last week in May. BNSF Railway (BNSF) has resumed operations in two subdivisions, with a third expected to be restored within the week. However, two remain out of service:
(1) the Napier Subdivision in Iowa and Missouri, and (2) the River Subdivision, extending south from St. Louis.
On June 17, Kansas City Southern Railway (KCS) restored service to the Roodhouse Subdivision (an east-west route near Louisiana, MO).
Earlier this week, KCS also quickly resumed service through the Heavener Subdivision (a north-south route between Neosho and Noel, MO).
As of June 15, grain carloads across all U.S. Class I railroads were 3 percent lower than the prior 3-year average over the past 4 weeks (GTR Figure 3).
Additionally, the Surface Transportation Board's data on rail performance illustrate the flooding impact, especially in March and June, but show some potential signs of recovery in the latest week of data.
BNSF and UP appear to have been affected the most.
For those two railroads, grain train speeds in March averaged 7 percent below the prior 3-yr average. After some recovery, train speeds declined again at the end of May and early June.
BNSF and UP grain origin dwell times show a similar pattern, spiking significantly in March and June, up 164 percent and 97 percent, respectively, from the prior 3-year average.
This means, in addition to moving slower on their network, trains are experiencing delays getting underway from origination points. However, for the week ending June 19, average BNSF and UP grain origin dwell times fell 43 percent from the previous week, suggesting some recovery is underway.
A Look at Other Agricultural Impacts
Crop Progress: Despite acceleration in recent weeks, planting progress for corn and soybeans has lagged the normal pace, at times by a considerable margin.
For the week ending June 23, the percent of soybeans planted nationally was 85 percent complete, compared to five-year average of 97 percent.
Just three weeks ago, soybean plantings were 40 percentage points behind the five-year average.
Additionally, only 96 percent of the corn acreage had been planted through June 23.
Typically, nearly all U.S. corn is planted by the beginning of June. Similarly, the “percent emerged” data for corn and soybeans is well below historical figures.
Last week, only 55 percent of soybeans and 79 percent of corn had emerged, compared to their respective fiveyear averages of 84 and 97 percent.
Figure 2 shows the percent of soybeans emerged in recent weeks.
Since late May, the share of corn and soybeans emerged has lagged all respective time periods in the previous twenty years.
Later-emerging crops increases the risk of problems at harvest, which can impact yields and the derived demand for transportation
Upcoming Grain Production: USDA anticipates some effects on agricultural production in marketing year (MY) 2019/20 as a result of the flooding and planting issues, particularly for corn.
According to the latest (June) World Agricultural Supply and Demand Estimates (WASDE) report, USDA forecasts U.S. farmers will produce 13.68 billion bushels (bbu) of corn in MY2019/20, down 1.35 bbu (9 percent) from its previous projection in May.
If realized, this would be the lowest volume of corn production since MY2015/16, down 7 percent from the 3-year average. The report explains,
“Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects.”
This could translate into less transportation demand for domestic and export-destined corn movements, as USDA projects use for feed and exports to decline 3 percent from last year and 6 percent from its previous forecast.
In the June WASDE, USDA indicated little change to soybean production: “Although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season.”
The next WASDE will be released on July 11.
Transportation and Weather Outlook
Mississippi River barge traffic at St. Louis has resumed; the National Weather Service forecasts river levels are likely to continue to recede.
According to its June 21 Network Update, BNSF is working aggressively to fill washouts and re-surface track.
The railroad anticipates being able to reopen the River Subdivision by mid-July and restore service along the entire Napier Subdivision in late July. UP estimates re-opening its River and Sparta Subdivisions by the end of this week.
According to USDA’s Agricultural Weather Highlights from June 27, significant rainfall will mostly remain across the northern U.S. over the next several days, including the northern Plains and Midwest.
Mostly dry weather is expected to prevail in the southern Plains.