When it comes to harvest across the Midwest, one thing is key; the movement of grain is the most important issue we must deal with if we’re going to be successful during the harvest season. Either we’re talking about the moving of grain in your own farming operation, or we’re talking about the movement of grain from elevators out to the end users and to the ports for export. Right now, we’re in the midst of a perfect storm that is conspiring to throw a monkey wrench into the smooth operation we’ve come to expect in the harvest time. Not only could it be a logistics nightmare, but it could also very well affect the prices we get when we sell grain.
Of course, what we’re talking about has to do with barges and railroads. These are the two main means of transporting our grains to export in this country. Barges take the lion’s share of grain down the Mississippi to the ports on the gulf. Trains take a large amount of grain to the Pacific Northwest for export across the Pacific. Both are facing dilemmas that are going to slow down the movement of grain to the end users. However, the difference is that one is a natural occurrence and the other is a man-made problem.
Barges are having trouble getting down the Mississippi River and are having to change how they are loaded to successfully navigate the father of waterways. Dredging boats have had to come to the rescue of barges that are stuck in Memphis and along the Mississippi/Louisiana border. this morning, I talked with Jim McCormick of AgMarket.Net. He ran down the latest on the Mississippi River situation.
He talked about the logistics problems that this will cause for farmers and elevators in small communities.
When it comes to the railroads, we thought a strike had been averted when a temporary agreement was brokered by President Biden between the rail industry and the unions that are working on those railroads. However, the Brotherhood of Maintenance Way Employees has rejected the temporary agreement likening the chance for a strike to happen after all. McCormick talks about the latest developments in that situation.
I asked McCormick to give us the best estimate of what the short- and long-term impacts could be for farmers if the situation continues for very long. This not only includes the possibility of logistics issues at local elevators, but it also means it will affect the basis prices that are being paid to farmers who are bringing their grain to market. It also affects the goods coming up the river from the gulf, like fertilizers.
McCormick is feeling positive that a strike won?t happen because a shutdown of even just 24 hours would be so detrimental to the U.S. economy. As of now, the unions are putting off any strike until after the elections and McCormick feels a lame-duck Congress would still force the industry to keep working during negotiations, for the good of the economy.
