Record Water Levels Shut Down Miles Of Mississippi River
AUDIE CORNISH, HOST:
Here's another impact of the historic flooding on the Mississippi River. Farmers are having to find other ways to deliver corn and soybeans to export markets. The record water levels have shut down miles of the Mississippi, disrupting the barges which carry the corn and soybeans to ports in Louisiana. Mike Steenhoek is executive director of the Soy Transportation Coalition. He joins us now from Des Moines. Welcome to the program.
MIKE STEENHOEK: Good to be with you.
CORNISH: First, remind us; how would the season typically go this time of year? What's the process?
STEENHOEK: Well, for soybeans to find its way to a customer in Asia - China's our No. 1 customer - will involve a short truck movement to one of our major rivers, the Mississippi predominant. And then, that'll be about a 900- to a thousand-mile journey via barge. And you'll have all these barges latched together with a tow-boat pushing it from the back. And it'll go down to an export terminal in Southern Louisiana near New Orleans where it's, in turn, loaded onto an ocean vessel.
And then, it'll go through the Gulf of Mexico, through the Panama Canal and across the Pacific Ocean to our customers in Asia. And so the inland waterway system is a really important conduit to making sure that what U.S. soybean farmers are able to produce and U.S. farmers in general are able to produce can find its way onto the international marketplace.
CORNISH: And this is peak season, so I gather these high water levels are really a problem.
STEENHOEK: It is. And for soybeans, we're particularly vulnerable to that because we have strong competition from Southern Hemisphere countries, primarily Brazil and Argentina. The Southern Hemisphere has an inverse growing and harvest season, so when their harvest comes online for South America, it's March, April and May. All of a sudden, they will become the major supplier for the international marketplace.
So there's a real strong incentive for U.S. soybeans, if they're going to be exported, to work their way through the system and be delivered to our customers before the South American harvest comes online. So this is really peak time to make sure that we're shipping to our overseas customers.
CORNISH: As we mentioned earlier, farmers are trying to find other ways to deliver to these markets - putting things on trains and trucks. At what point to people panic?
STEENHOEK: Well, there's a lot of concern right now because there's a number of reasons why the profitability of the American farmer is under assault right now. So any kind of disruption, even if it's short-lived - and we hope this is short-lived, but it'll probably be with us for another three to four weeks - it really does raise significant concerns.
So we're hopeful that our freight rail industry can absorb some of this cargo that does need to be diverted, and we're hopeful, you know, that the forecast is quite favorable. So hopefully, water levels will decline rather rapidly.
But again, this water that's currently in St. Louis - it'll take three to four weeks to work its way through the southern part of the river to actually get expelled into the Gulf of Mexico. So the ripple effects, literally and figuratively, are going to be with us for a while.
CORNISH: Any sense yet how much profit could be lost?
STEENHOEK: Well, you know, as far as an aggregate figure, no. I mean, the problem right now is that farmers are really - the margins are exceedingly tight. U.S. agriculture is confronted with some pretty significant headwinds right now. Primarily, you know, our big customer in China - their economy's starting to relax. The U.S. current dollar has strengthened considerably against the Brazilian currency and the Argentine currency, so our exports are actually less competitive. So any additional cost due to a less-efficient transportation system can easily be the difference between a farmer being in the black versus being in the red.
CORNISH: That's Mike Steenhoek. He's executive director of the Soy Transportation Coalition. Thanks so much.
STEENHOEK: Thank you.
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