Barge Situation for Grains and Oilseeds

Transcription

1 Barge Situation for Grains and Oilseeds This section looks at key barge factors that are impacting movements of grains and oilseeds. The information in this section is based on information from the Army Corps of Engineers Lock Performance Monitoring System, Waterborne Commerce of the United States and Vessel Operator Characteristics, and Informa s annual Barge Fleet Profile report. Grain barge loadings demonstrate a shift in loadings by waterway. The trend of relatively less grain loading on the upper Mississippi and Illinois Rivers has emerged since the early 2000s. About 60% of annual grain barge loadings originated on the upper Mississippi and Illinois Rivers, and has trended lower to about 40% in This trend is particularly evident for soybean loadings with increased loadings on the lower Ohio and lower Mississippi Rivers. This shift in loadings has occurred during the time of the ethanol build out across the Corn Belt and within proximity of the navigable river system, especially in Iowa where corn became deficit. Once the corn ethanol mandate is achieved corn surpluses are expected to return along the upper Mississippi River. But with issues of crumbling lock infrastructure, increased crop production lower along the Mississippi River, deeper draft barge equipment being used, and a widening barge freight spread, will the upper Mississippi River gain a competitive edge with the lower Mississippi River, during a time when the Panama Canal expansion effort will be completed and will likely expand the draw area for river navigation. 1

2 U.S. Inland River System Minneapolis Mississippi River UPPER MISSISSIPPI SYSTEM Missouri River Illinois River St. Louis Chicago OHIO RIVER SYSTEM Jeffersonville Rockport Louisville Ohio River Kanawha River Allegheny River Pittsburgh Monongahela River Arkansas River White River Cairo LOWER MISSISSIPPI SYSTEM Mississippi River Green River Cumberland River Tennessee River Guntersville Quachita River Yazoo River Tombigbee River Black Warrior Apalachicola River Red River Houston New Orleans Gulf Intracoastal Waterway Gulf Intracoastal Waterway 2

3 100% Share of Grain and Soybean Loadings by River Segment Share of Volume 90% 25% 23% 80% 70% 60% 30% 50% 19% 40% 13% 30% 19% 16% 10% 9% Upper Mississippi River (MSP to Missouri River) Illinois Waterway Mid-Mississippi River (Missouri River to Ohio River) Ohio River Lower Mississippi River (Ohio River to Baton Rouge) McClellan-Kerr Arkansas River Baton Rouge to New Orleans New Orleans to Mouth of Passes 0% Year Source: Army Corps of Engineers and Informa 3

4 100% Share of Soybean Barge Loadings by River Segment Share of Volume 90% 24% 80% 70% 60% 28% 50% 9% 40% 30% 16% 12% 15% 15% Upper Mississippi River (MSP to Missouri River) Illinois Waterway Mid-Mississippi River (Missouri River to Ohio River) Ohio River Lower Mississippi River (Ohio River to Baton Rouge) McClellan-Kerr Arkansas River Baton Rouge to New Orleans 10% 30% New Orleans to Mouth of Passes 0% Year Source: Army Corps of Engineers and Informa 4

5 Since 2001, the average tons loaded per barge for grains and soybeans by river segment: o Upper Mississippi River 1,554 tons; o Lower Mississippi River approximately 1,700 tons; o Illinois Waterway 1,552 tons; o Ohio River 1,561 tons; and o Arkansas River 1,406 tons (average since 2003). Since 2011, the average tons loaded per barge for grains and oilseeds by river segment: o Upper Mississippi River 1,538 tons; o Lower Mississippi River approximately 1,700 tons; o Illinois Waterway 1,544 tons; o Ohio River 1,699 tons; and o Arkansas River 1,397 tons. The number of total grain and oilseed barge loadings has decreased since the 2001/02 highs on the Upper Mississippi and Illinois Waterway while on the Ohio River 2009/10 was the high with just under 5,000 total barge loadings. Around 85% of the covered hopper barge fleet is able to handle loads that draft 12 feet to 14 feet compared with 15% that is limited to 9 feet to 10 feet. As a result, in most cases a covered hopper barge will be able to take advantage of deeper drafts if the river allows. 5

6 100% Covered Barge Fleet by Draft Characteristics 90% 80% Share of Covered Barge Fleet 70% 60% 50% 40% 30% 10% 0% 81% 82% 10% 9% 9% 9% 84% 9% 7% 80% 78% 76% 9% 11% 12% 11% 11% 12% 68% 65% 66% 71% 18% 15% 16% 14% 16% 16% 17% 19% Source: Informa Economics, Inc. ( The barge freight rate differentials between key river locations and Peoria, IL on the Illinois River have been widening. The spreads at locations downriver from Peoria have widened from a range of - 10 cents to - 15 cents per soybean bushel from the mid- 1990s to the mid- 2000s from Memphis 6

7 for example. Since 2004 the barge freight spread between Memphis with Peoria has widened further to more than - 30 cents per soybean bushel and has maintained a greater than 25% freight advantage since Barge Freight Rate Differential with Peoria, IL for Soybean Movements to New Orleans, LA by Select River Segments $0.30 St. Louis Memphis Mt. Vernon Dubuque $0.20 Difference ($ per bushel) $0.10 $0.00 -$0.10 -$0.20 -$0.30 -$ Year Source: USDA and Informa 7

8 Commodities Moved Tons On the demand side, commodity volumes moved on the inland waterways during 2010 totaled million tons, an increase of 9% from The economic recession led to a dramatic drop in commodity flows during 2009, but movements during 2010 showed a decent rebound. Only farm products displayed a positive annual increase in movements, led by higher corn and soybean moves. Farm products were up 7.5 million tons or 11% to 74.7 million tons. The increase follows the poor navigation conditions of 2008 that directly impacted corn moves. Movements of soybeans were record high in 2009 at 21.8 million tons. For 2009, Informa estimates waterborne commerce to have expanded 15% to 587 million tons. The estimates were developed through specific commodity and trend analysis. Average Distance The average distance commodities were hauled during 2009 increased to 481 miles, up from 456 miles in 2008, which is about 30 miles above the 5- year average. Food and farm products were hauled the greatest distance in 2009, with an average of 972 miles, which was the highest distance for this group since Chemical movements averaged 604 miles, nearly unchanged from the 602 miles in 2008, but about average for the past five years. 8

9 Average Distance Food and Farm Product Moved by Barge (miles) 1,200 1, Miles Year Ton- Miles Commodity ton- miles for all internal movements during 2009 totaled 245 billon ton- miles, down 6% from Food and farm products totaled 72.6 billion ton- miles during 2009, an increase of 17% on higher volumes and longer distances moved. 9

10 Total Grain and Oilseed Barge Loadings on the Upper Mississippi River 30,000 25,000 Barges 20,000 15,000 10,000 5, / / / / / / / / / /10 Crop Year 10

11 Total Grain and Oilseed Barge Loadings on the Illinois Waterway 10,000 9,000 8,000 7,000 Barges 6,000 5,000 4,000 3,000 2,000 1, / / / / / / / / / /10 Crop Year 11

12 6,000 Ohio River Total Grain and Oilseed Barge Loadings on the Ohio River 5,000 Barges 4,000 3,000 2,000 1, / / / / / / / / / /10 Crop Year Farm to Market: A Soybean s Journey can be accessed at or Funded by the Soybean Checkoff 12