Farm exports set a record for the first half of 2011, according to the U.S. Department of Agriculture release this morning, and Lee Nelson has been up since 4 a.m. trying to do his part.
Nelson heads Upper River Services, which is the local harbor operator for the St. Paul Port Authority and services barges moving in and out of the Twin Cities. “Our season is barely getting going,” he said. “Here we are May 12 and we barely started May 6,” he noted.
While Minnesota escaped the massive Mississippi River flooding inundating Memphis and moving to New Orleans, the impact of the near-record surge is still being felt here.
Normally, the shipping season kicks off in March, but this year they did not begin moving barges to Savage, which is among the largest grain terminals on the Mississippi River, until last Friday, Nelson said.
The flooding has kept Nelson and other barge operators scrambling.
Portions of the upper Mississippi between St. Louis and the Twin Cities were closed to traffic until May 7. While they have customers wanting delivery of grain for export, they have not been able to move the quantities they would like. Just finding empty barges has been a challenge.
Some barges were able to get into town but were loaded with commodities and could not be unloaded,” he explained.
Challenges will remain, Nelson said. Two months of abnormally high water “moves the [river] bottom around,” he explained. “We’ll wind up with shoaling yet to be discovered, where the bottom is too close to the top.”
Mark Davidson, public affairs officer for the Army Corps of Engineers’ St. Paul District, said the agency resumed dredging this morning after a two-week hiatus. “You’ll see more dredging activity in coming weeks,” he said.
There had been concern that delayed shipments of fertilizer might affect Minnesota farmers, but the wet spring also has delayed planting, Nelson added.
The late start presents a challenge for Minnesota grain exports, but it should be temporary, Nelson believes. “We’re definitely having difficulty moving the volume we should be moving.”
Does he think they can catch up? In part, that depends on global demand and grain supplies, he said. “We’re filling the hole as much and fast as we can.”
Dick Lambert, who works in ports and waterways for the Minnesota Department of Transportation, points to the importance of the river to Minnesota’s economy. “First of all, it’s a system from here to New Orleans,” he said. “Anything that happens anyplace on the system will impact the whole system.”
“We ship a lot of grain out of Minnesota for export — primarily corn and soybeans this time of year,” Lambert said. “If there’s a market for corn or soybeans and the price is right, we’re going to be shipping. If the river is flooded, that’s interrupted.”
Shipping grain south by rail is not an easy alternative, he said, because many of the rail lines run along the Mississippi river valley, and they’re “just as apt to get interrupted by floodwaters.” He also noted that diverting rail capacity on short notice to carry grain south is not practical because much of the rolling stock is being used to ship commodities east and west.
Cargill spokesman Mark Klein said the impact of transport has not been felt in the markets, pointing to a recent U.S. Department of Agriculture report showing that stocks of grain were higher than the market expected, depressing prices.
The market is more concerned, he said, with the delayed start to the growing season. He also said that the Pacific Northwest has also become a major destination for grain exports to Asia.