STC monitoring Ida’s impact on grain exports

September 2, 2021 | Bethany Baratta

Crippled by Hurricane Ida, the United States’ busiest conduit between soybean farmers and the rest of the world is shut down.

The hurricane made landfall at 11:55 am on Sunday, Aug. 29, as a Category 4 storm with maximum sustained winds of 150 mph. It weakened to a Category 3 storm as it approached New Orleans.

Effective on Aug. 28 at 10 p.m., the U.S. Coast Guard ordered no vessel movement on the lower Mississippi River from the Gulf of Mexico to river mile 303. For reference, Baton Rouge is at river mile 232; New Orleans is at river mile 100.

Soy Transportation Coalition (STC) Executive Director Mike Steenhoek said he’s monitoring the impacts the hurricane has on export terminals.  

The lower Mississippi River is the largest export region for U.S. soybeans and corn, accounting for 61% of soybean exports and 58% of corn shipments to global customers.

“Therefore, any lengthy disruption to export activity in this key region warrants our attention and concern,” Steenhoek said.

There’s a number of things that Steenhoek is monitoring currently, he said. The first: when will power be restored?

The 150 mph winds toppled a transmission tower, also forcing transmission lines into the Mississippi River and further complicating power restoration efforts.

It’s also unknown how the hurricane will impact shipping levels.

“When you have a violent storm arrive and it churns up the sediment at the bottom of the river, it can change the water level and shipping depth,” Steenhoek said. “One of the things they’re doing right now is assessing the extent by which the water level and shipping depth have changed.”

Once the Coast Guard grants permission for shipping to resume on the lower Mississippi, it’s expected that movement would be restricted to daylight hours. Draft restrictions—or how loaded a vessel can be loaded—might also be in place out of an abundance of caution, Steenhoek said.

It’s unknown how long the river closure to shipments might last, Steenhoek said. There are other opportunities to move the grain from the Midwest to global customers, like by rail or shipping through the Pacific Northwest, but there is a price impact to farmers, shippers, and customers.

“The area of the country (Midwest) that feeds into the Gulf is going to have a real strong crop this year and we still have pretty robust demand,” Steenhoek said.

But if the lower Mississippi River isn’t operating at full capacity when soybean and corn exports ramp up in October, there becomes bottlenecks in the system. He likens it to attaching a garden hose to a fire hydrant.

 “That’s when the industry becomes less profitable,” he said. “You have to start possibly diverting shipments elsewhere, and there’s usually a cost associated with that. That’s the real big concern that we have. So, we’re continuing to monitor it and hopefully we’ll see a pretty quick rebound.”

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