Harvest Shipping Faces Logistics Challenges
While most of the problems resulting from Hurricane Ida’s impacts in the Lower Mississippi region have either been overcome or are being addressed, this year’s soybean and corn harvests are still facing logistics issues.
The Coast Guard continues to respond to impacts to the waterways and assess the environmental threats across southeast Louisiana post-Hurricane Ida. In partnership with the Corps of Engineers and the Navy Supervisor of Salvage and Diving, the Coast Guard is continuing efforts to reopen waterways affected by Hurricane Ida in the areas of Bayou Lafourche, Houma Navigation Canal and portions of the Gulf Intracoastal Waterway.
Obstructions to the affected waterways are being identified and removed to restore the area to pre-storm conditions. To date, 85 obstructions, mostly fishing vessels, crew vessels, houseboats and offshore supply vessels, have been identified in the Bayou Lafourche channel. As of September 19, the Corps deemed all obstructions on the Houma Navigation Canal removed. The Coast Guard continues to coordinate operations with the Corps to identify and remove waterway obstructions throughout the region.
Of the 408 damaged or offline aids to navigation, 366 aids to navigation have been fully restored or have temporary corrections, which is nearly 90 percent of those identified, the Coast Guard said.
The Coast Guard is working with the Corps to mitigate severe shoaling and obstructions in the Gulf Intracoastal Waterway, which was closed from Mile 18-20 and from Mile 21-33 due to shoaling. The Corps of Engineers is conducting dredging operations. The Port Allen alternate route is open for marine traffic.
Lower Miss Open For Business
Eight of the nine grain elevators in the Lower Mississippi and Gulf region have reopened, according to Ken Eriksen, senior vice president – agribusiness for IHS Markit. Most power has been restored, and the Port of New Orleans is back to normal – or as near normal as the unbalanced world logistics system allows.
In the aftermath of Ida, which scattered dozens of barges, some barge operators moved equipment down from the Upper Mississippi. Some of those barges are being used to store grain awaiting further blending, including some grain that may have been water-damaged during the storm. “It’s just a question of waiting for the right blending opportunities,” Eriksen said.
But some grain blenders will have to wait for harvest grain, because existing stocks of corn, soybeans and wheat in the bins are collectively at their lowest level since the mid-1990s.
Collecting harvest grain loads means moving barges back up north. Operators would prefer to send barges loaded with fertilizer or other cargoes rather than empties, but fertilizer prices have skyrocketed due to many factors, including a rise in the price of natural gas feedstocks. A short ton of urea fertilizer is selling for as much as $550, versus $250 a year ago.
In addition, there is still some damaged equipment from Ida, possibly as many as several hundred barges, according to Eriksen.
Barge rates are at or close to 1,000 percent of tariff as the entire logistics system remains stressed around the world.
One stressor is the collapse of a loading boom of a crane at the West Coast port of Grays Harbor, Wash., operated by Ag Processing Inc., on September 1. The crane could take months to repair, Bloomberg reported. The port was credited by some news organizations with handling as much as 20 percent of U.S. soybean exports.
Despite these challenges, China is on pace to meet its Phase One commitments according to the trade deal the Chinese government negotiated with the last administration. From January through August, the U.S. had exported almost $18 billion worth of ag products to China alone.
China continues to purchase U.S. soybeans and meal, recently buying another 1 million tons of soybeans.
Since 2016, rail freight rates on corn, soybeans and wheat, including fuel surcharges, have gone up 13 percent, 11 percent and 7 percent, respectively, according to the American Farm Bureau.