Harvest Season Could Be Subdued For Barges
Ken Eriksen, senior vice president of Informa Economics IEG’s Client Advisory and Development Group, cautions that this year’s barge harvest season will be “very short” and won’t see the typical barge freight rate spikes of a normal harvest season.
“There’s lots of [barge] capacity, and not much grain volume moving this year,” Eriksen told The Waterways Journal. “Barged frac sand and steel movements are also down, thanks in part to the tariff situation.”
Both corn and soybeans are about three weeks behind their normal harvest times, thanks to the wet weather and flooding earlier this year, which delayed plantings across a wide swath of the corn and soybean belt. At the time Eriksen spoke to WJ, he estimated that about 30 percent of the corn crop was in, and close to 50 percent of the soybean crop.
Eriksen estimated this year’s corn crop at about 1.815 billion bushels, and soybeans at 1.6 billion bushels. “Those are real low numbers” compared to past year’s. He said the volume for all barged grains, including wheat, is down about 700 million bushels from a year ago.
As the soybean harvest season picks up, barges could “see a good ramp-up of soy movements.” But due to the ongoing trade and export uncertainties, farmers still have a record amount of stored grain—about 900 million bushels of stored soybeans alone as of September 11, Eriksen said. “Farmers may have as much grain stored as at any time over the past 20 years.”
As part of the recent trade talks, China recently committed to buying as much as 14 million tons of American soybeans, but that is still a small fraction of past volumes to China.
Mark Fletcher, owner and CEO of Ceres Barge Line and Ceres Consulting, discounted the Chinese purchases. He said yields were down for soybeans this year by 10 to 15 percent, and for corn close to 10 percent.
The displacement of soybean demand toward the center Gulf helped barge traffic somewhat, he said, as soybeans that would have left the Pacific Northwest for China were routed instead for the center Gulf to go to Europe or South America.
The real story, he said, isn’t just the tariffs, but long-term demand destruction due to the devastation of China’s swine herd by African swine fever. “We’re probably not going to see much of a pop in demand for barge traffic through the end of the month,” he said.
During this harvest season, he told The Waterways Journal, “the only thing moving by barge is grain that needs to find a home or doesn’t have storage. The signals the market is sending are telling farmers to keep their grain stored until January.”