USDA takes additional steps to ease grain transport on Mississippi River
The U.S. Department of Agriculture has announced new steps to improve barge transportation on the Mississippi River.
The barge transport system was severely disrupted by recent hurricanes in the Gulf and, with harvest approaching, threatens capacity constraints for upcoming grain shipments.
“It is critically important to have barges available during peak grain harvest season, and our goal is to quickly unload barges so they can be reloaded with newly harvested grains,” said U.S. Agriculture Secretary Mike Johanns in a statement Wednesday.
USDA will accept proposals on a competitive basis from industry to help unload barges carrying grain commodities. The agency has about $7.6 million in funding for the effort. USDA will not accept offers in excess of $30 per ton.
For barges to qualify, they must have been loaded and shipped to the New Orleans area before Aug. 29, when Hurricane Katrina made landfall. Barges must be unloaded by Dec. 1, unless USDA issues an extension of that deadline.
USDA said there are no restrictions on the actual offload location, final destination or disposition of the agricultural commodities. However, there must not be a “negative market impact,” the agency said.
“This offer of economic assistance is only available to unload barges of agricultural commodities in order to facilitate barge availability,” USDA said.
USDA had provided freight differential incentives to move 294,770 metric tons of corn, wheat and soybeans through Great Lakes and Pacific Northwest ports. USDA incentives also promoted the movement of 209,238 tons of damaged corn out of New Orleans and the storage of about 42 million bushels of corn and wheat in alternative facilities, relieving the pressure placed on commercial markets because of the transportation stress.
For more information about bid requirements, contact James Goff of the USDA Farm Service Agency’s Warehouse and Inventory Division, in Washington at (202)720-5396, or by e-mail at James.Goff@wdc.usda.gov.
U.S. lawmakers and grain industry officials praised the USDA for its recent actions to improve barge transportation in the Lower Mississippi River.
Thirty-three states rely on the Mississippi River and its tributaries to move agricultural commodities to port facilities for export. “This means that producers in more than half of the U.S. are feeling the impact of the hurricanes and their residual effects,” said House Agriculture Committee Chairman Bob Goodlatte, R-Va., said in a statement. “I am pleased that USDA is ramping up their efforts to help our producers as they harvest this year’s crop.”
Prior to hurricanes Katrina and Rita, grain shippers already experienced a capacity crunch on the Mississippi River. River transport suffered from low water levels, limited barge availability, and rising freight rates and fuel costs.
“As we look ahead, I project that the industry may return to more normal operations at the Gulf around the end of this year,” testified Timothy Gallagher, senior vice president and general manager for Bunge North America’s Grain Division, before the House Agriculture Committee on Oct. 26. “However, I would point out that we likely will see little change until the harvest is complete.”
