Water levels in the Mississippi River south of St. Louis have fallen as a result of drought.  This has resulted in a reduction in the loading of barges and a consequential increase in freight rates.  As of September 22nd the St. Louis barge rate for export grain at $49.88 per ton was 95% higher than the five-year average and 58% higher than during September 2021.

For each one-foot lower water level, a barge must relinquish between 150 to 200 tons of load.  Assuming a typical 15-barge tow, a one-foot drop in water level results in the need to reduce load by 75,000 bushels. In addition to lower loading, low water levels have narrowed channels reducing the number of tows transiting from St. Louis to New Orleans and delaying delivery.

On October 6th the Ingram Barge Company declared force majeure due to low water level downriver from Baton Rouge, LA. That will impact exports and have an effect on CME quotations for corn and soybeans. The situation is reminiscent of low levels in the Parana River affecting exports of corn and soybean meal from Argentina last year. The Mississippi situation is reminiscent of the 2012 when drought affecting the Great plains led to frequent cosures of waterways with losses estimated at $35 billion.

A report by Bloomberg on October 10th confirmed that slow traffic had resumed near Stack Island, MS. and also at  Memphis, TN. reducing the backup of 2,000 barges that existed on Friday 7th.