This article has been reprinted from the Aug. 15 USDA Grain Transportation Report.
Compared to the previous quarter, the transportation costs of shipping bulk grains (corn, soybeans and wheat) to Mexico remained relatively stable during the second quarter of 2019.
The transportation costs of shipping grains to Mexico, through both water and land routes, fluctuated within a 1 percent range.
While the costs of shipping seaborne corn and soybeans fell 1 percent, the costs of shipping seaborne wheat and all grains by the land route rose 1 percent (see table).
The changes in landed costs were mixed, as costs for corn increased while those for soybeans and wheat decreased.
Along the water route, barge rates fell by 11 percent due to reduced demand from persistent flooding and navigation disruptions during the quarter (see April 4, 2019 and June 27, 2019 Grain Transportation Reports (GTR)).
Compared to quarter 1, truck rates for waterborne corn and soybeans increased 25 percent while remaining relatively unchanged for seaborne wheat and grains transported through the land route, during the second quarter.
Rail tariff rates also remained relatively stable during the quarter.
Although significant effort was put forth and considerable progress was made in restoring services, railroads were affected by inclement weather and flood conditions during the quarter (June 27, 2019 GTR).
Compared to the previous quarter, there was an increase in the farm value of corn, which pushed up landed costs during the second quarter.
During this same period, the farm value for soybeans and wheat decreased, resulting in lower landed costs.
Year-to-year landed costs were down for all grains shipped through the water route, as well as for soybeans and wheat transported through the land route.
However, the landed cost for corn transported through the land route increased from last year.
The landed costs for the water route ranged from $193 to $356 per metric ton (mt) (see table and figure 1), and $241 to $391 per mt (see table and figure 2) for the land route.
The transportation share of the landed costs fell for corn, was unchanged for soybeans, and increased for wheat.
The transportation share of the landed costs ranged from 13 to 27 percent for the water route and 25 to 40 percent for the land route (see table).
More corn and wheat, but less soybeans, were inspected for export to Mexico during the second quarter of 2019, compared to the previous quarter (USDA’s grain inspection data).
However, less corn and soybeans were inspected for export to Mexico, compared to the same period last year.
During the second quarter of 2019, 3.39 million metric tons (mmt) of corn, .87 mmt of wheat, and 1.03 mmt of soybeans were inspected for export to Mexico.
In contrast, inspections of corn, wheat and soybeans for export to Mexico were 3.06 mmt, .70 mmt and 1.13 mmt, respectively, during the first quarter of 2019.
During the second quarter of 2019, total inspections of corn and wheat for export to Mexico were higher than in the first quarter by 11 and 24 percent, respectively.
However, soybeans inspected for export to Mexico were lower by 8 percent, compared to the first quarter.
Compared to the same period last year, wheat inspected for export to Mexico was 51 percent more during the second quarter, while inspections of corn and soybeans were 14 and 12 percent lower, respectively.
Lower transportation costs help boost the competitiveness of U.S. grain exports to Mexico.