Billions Of Dollars At Risk As Farmers Brace For Mississippi Shutdown
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ST. LOUIS (KMOX) - You can count soybean farmers among those disappointed that the Corps of Engineers will not release more Missouri River water to help keep barges rolling on the Mississippi.
New United Soybean Board Chairman Jim Stillman says that if the river has to be shut down, the economic impact on farmers and others in the industry would be “huge.”
“This is an important time for a lot of barge traffic to come up and down the river,” Stillman said. “Crops are trying to be exported out of the country and also to bring fertilizers up for next spring.”
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80 percent of all U.S. soybean exports occur between September and March and Soy Transportation Coalition Executive Director Mike Steenhoek says the low water levels are forcing shippers to shift to rail.
“Any kind of supply disruption during this critical time of the year is very similar to having a supply chain disruption for retailers prior to the Christmas season,” he said.
“Rail, while very efficient and quite reliable, is a higher cost mode of transportation than barge,” Steenhoek said, adding that it will add costs for everyone from farmers to consumers.
He estimates a complete shutdown of the river would cost inland waterway shippers and their customers $7 billion.
To worsen the situation, Steenhoek said it could take years for the American soybean industry to recovery from such a shutdown. That’s because overseas customers buy U.S. products in large part due to the market’s reliability, a trust that would be compromised by a commercial stoppage.
“If your operations depend on a predictable flow of grain and soybeans from the United States and all of a sudden that bet does not occur then people are going to start hedging their bets,” Steenhoek said.
Barge operators say they are already lightening loads because of the low water levels. Forecasters say the river may have to be closed to shipping by the end of the month.