Transportation Troubles for Agriculture, Times Three
November 2, 2022 Ask most folks that do business within the agricultural marketplace what one issue has kept them awake at night in 2022 and the chances are good that transportation will top many lists. The year started out with myriad issues and questions regarding the movement of products around the world – and things haven’t gotten much better as the year wraps up.
Take barge traffic, for example. In late October, the U.S. Army Corps of Engineers reported that water levels on the Mississippi River had hit an all-time low, minus 10.77 feet. This has kept many large barges from traveling down the waterway at all, and those that have shipped are carrying less than maximum loads to do so.
For agriculture, the Mississippi River represents an important transportation path, for everything from dry fertilizer shipments to soybeans for export around the globe. According to market watchers, this situation has prompted many in agriculture to look to other waterways for shipments, from Puget Sound to Texas to the Great Lakes.
In addition to water woes, agriculture is also keeping a close eye on the nation’s railroad carriers. Earlier this year, the carriers and many of their labor unions agreed to a new working contract for employees. Most of the union members voted in favor of these agreements. However, one union representing maintenance engineers did not. This sets the stage for a potential strike by this group come November 19 if no new agreement is hammered out in time.
According to Kevin “K.J.” Johnson, President of the Illinois Fertilizer & Chemical Association, it has sent a letter to the Biden Administration asking for some intervention to avoid a strike. “We signed a letter with a lot of national and state groups asking the administration to please get involved in this to defer a strike,” said Johnson. “Because we know this won’t just affect the ag input industry, it will affect every sector of the economy.”
Finally, at the end of October, drone attacks on shipping in the Black Sea caused Russia to rescind its agreement to allow grain ships to leave the Ukraine. For a few days, this caused global grain prices to spike and had many countries dependent upon Ukrainian grain concerned.
Loading ...Luckily, on November 2, a National Public Radio report said that Turkey had announced that Russian officials had reaffirmed their commitment to the Ukrainian grain shipment deal. Regardless, the transportation troubles that have defined much of 2022 remain.
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