So, let’s recap what we know so far. We know it has been a dry couple of years. We know that this year has been the worst we have seen in a while, but not supposed to be as bad as 1988 or even 2012. If that is the case, why are we seeing more concerns over the low rivers than in those prior years? In fact, we heard just two weeks ago on the Opening Market Podcast with Jim McCormick of AgMarket.Net, that the Mississippi River was lower at Memphis than it had been in the two bad droughts of 1988 & 2012.
Why? Because those were only one-year issues. Our drought has been running for over two years. Rain has been very sporadic, and that makes it difficult to replenish a river system. Mike Steenhoek, the Executive Director of the Soy Transportation Coalition says he is concerned about the low rivers during this harvest and exporting seasons.
Transport companies have had to implement contingency plans to keep goods flowing up and down the rivers.
Steenhoek adds that farmers are suffering disproportionately to consumers. While the costs are rising for consumers, the prices paid to farmers for their goods are dropping at the terminals. This means they are hit as producers when they sell and consumers when purchasing goods.
Barge rate increases are being felt. In St. Louis alone, the USDA says that rates have increased over forty percent in the last year. In Memphis, TN/Cairo, MO, the rates are more than eighty percent higher.
Recent rains have been welcomed. In Decorah, for example, they have gotten more than fourteen inches of rain since August. But that is just a small drop in the bucket. With the ground so parched, it is going to take a while for that water to reach the river systems.
