Grain Transport Woes
By Mary Kennedy
OMAHA (DTN) — The start of the spring grain shipping season will be delayed as news reports that close to 90% or more of four of the five Great Lakes are ice covered for the first time since 1994. This comes on top of a winter filled with grain-movement problems.
At the Twin Ports of Duluth/Superior, the U.S. Coast Guard icebreaker Alder began operations March 4. The Duluth Shipping News reported, "She got away from the dock with little trouble, which was very surprising to everyone watching. She slowed down when she got to the middle of the harbor and turned up the harbor toward the Port Terminal. It has been very, very slow as she is backing and ramming her way down the Superior channel. They saw ice between 2 to 5 feet thick, with it getting thicker as they moved down the Superior channel."
See more at: http://duluthshippingnews.com
In addition to problems at the Great Lakes, there is already speculation that spring river transport season in the upper Mississippi River will be delayed. The Ingram Marine Group website reported these conditions as of March 6: "Lock and Dam 8, Upper Mississippi River mile 679.2, excessively thick ice conditions at Lake Pepin and down river indicate that navigation will not begin on the Upper Mississippi River in the near future. Given these conditions, Lock and Dam 8 will reopen one week later than previously scheduled, at 0001 hrs on Monday, 17 March 2014."
River transport of grain has been affected by the extreme cold this winter, especially the Illinois River which was 100% closed last month due to severe ice conditions. The March 6 USDA Grain Transportation report stated, "As most of the country east of the Rocky Mountains experiences unseasonably cold temperatures, ice accumulations continue to slow barge operations in the Midwest. Illinois River grain movements for the first nine weeks of the year were 1.1 million tons, 39% lower than the three-year average."
Repair work at Locks and Dam 26 near St. Louis is also slowing barges. "Repair work at the 1,200-foot main chamber at Melvin Price Locks and Dam has slowed Mississippi River traffic at that site. During the repairs, the 600-foot auxiliary chamber at Melvin Price will be operating to meet navigation needs. The U.S. Army Corps of Engineers and the barge industry are working together to maintain the flow of barge traffic through the affected area," USDA reported.
River transport problems may start to ease next week as the weather changes. But don’t expect an immediate swing into spring. "While the weather will be milder next week, temperatures are expected to still remain below normal in the Midwest for mid-March," said DTN Senior Ag Meteorologist Bryce Anderson.
Rail transport of grain has had its own issues this winter. BNSF published a podcast on its website March 6 updating customers on car placements and service delays. John Miller, group vice president of agricultural products said, "Every day during the month of February, cold weather delays were in place for North Dakota and Minnesota." … Miller pointed out that average days delayed increased to 19.4 days from 17.9 the week prior. The average number of cars behind reached 13,680, Miller said, up from 11,698 the prior week.
North Dakota was behind 6,673 cars and 20.8 days; Montana was behind 2,910 cars and 20.5 days; South Dakota was behind 1,398 cars and 19 days; and Minnesota was behind 1,378 cars and 20.5 days, Miller said.
Shuttle turnarounds remained unchanged at 2.2 per month versus the norm of 3 per month, Miller said. Also hampering transportation in the northwest was an avalanche that closed tracks near Glacier Park in Montana, stopping traffic to and from the Pacific Northwest. According to the BNSF website as of March 7, the northern region of the BNSF was still experiencing "operational impact" due to the avalanche.
While tracks have been cleared, the BNSF reported, "Customers may experience delays of 24 to 36 hours on shipments moving through this corridor."
BSNF service announcements and podcasts can be accessed here: http://goo.gl/…
U.S. farmers are becoming concerned as planting season approaches. Load restrictions will soon come into place, making it harder to haul grain that is owed on contract. Some producers have been unable to deliver grain this winter due to severe weather and/or elevators waiting for rail cars.
Producers in western North Dakota have reported that load restrictions are being strictly enforced due to the oil traffic also affecting roads there. The North Dakota DOT issued this reminder on Feb. 13 on their website, "The North Dakota Department of Transportation normally places load restrictions on some state highways from March to May, depending on weather. However, load limits have been put into effect as early as mid-February some years. Restrictions are lifted when roadbeds have stabilized enough to carry normal traffic. The proposed 2014 restriction map is located on the Internet." These maps can be viewed at http://www.dot.nd.gov/…. Minnesota and other northern states also provide load restriction maps on their department of transportation websites.
In Canada, the rail situation remains grave. Farmers are still waiting to deliver crops they contracted last fall, elevators remain plugged as they wait for cars, and vessels continue to sit in the West Coast port waiting for grain to load. A Canadian farmer said in a message last week after reading how many cars the BNSF was behind in placing at elevators and said he wished Canada rail was "only that far behind."
"Canadian railways were further hampered by the cold temperatures across the prairies over the past two weeks," said DTN Canada Grains Analyst Cliff Jamieson. "Both railways claim they are doing their best given the circumstances, while their plan involves a move back up to 13,000 cars a week or three times the normal limit when the weather cooperates.
"The University of Saskatchewan has indicated total damages due to the shipping backlog could exceed $4 billion, while the federal government seeks ways in which to build accountability into the shipping agreements between grain companies and the two railroads."
Bloomberg News reported the number of delayed rail cars has exceeded 60,000, and the Canada railways’ focus on movement to the West Coast is negatively affected U.S. markets, Jamieson said.
"U.S. markets continue to reflect the impact of the delayed shipments from Canada," he wrote, "with the May/July oat spread trading at a bullish 76-cent inverse in Thursday morning’s trade (May over the July) while the May/July spring wheat inverse is slowly growing with Thursday morning’s spread trading at a 2 1/2 cent inverse.
Mary Kennedy can be reached at email@example.com
© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.