Record low Mississippi River levels send barge rates soaring during harvest

In October 2022, low water on the Mississippi River disrupted barge traffic at the height of the fall harvest and drove up the cost of moving grain by water. USDA's Agricultural Marketing Service reported the conditions in its Oct. 20 Grain Transportation Report.

Record lows

The river gauge at Memphis, Tennessee, fell to a record low of minus 10.76 feet on Oct. 18. USDA said water levels on the lower Mississippi had not been that low since 1988. Low water led to reduced flows, smaller tow sizes and grounded barges. Parts of the river closed at times for 12 to 36 hours.

On the Ohio River, which supplies much of the lower Mississippi's water, low levels also delayed barge traffic because of groundings and closures for dredging. USDA expected periodic closures and limits on tow sizes and drafts to continue at least through October.

Barge rates spike

For the week of Oct. 11, the St. Louis barge spot rate peaked at $105.85 a ton. It fell to $72.58 a ton the following week, as some grain shippers put off deliveries until later in the year, softening demand for barges.

Even after the drop, the spot rate was 130% higher than a year earlier and 260% above the three-year average.

The pressure had built for months. From early July to late September, the St. Louis spot rate rose from $12.93 to $49.88 a ton. USDA said higher fuel costs and a shortage of workers had also delayed barge shipments by one to two days through the year.

Fuel and rail

Diesel was rising again. The U.S. average reached $5.339 a gallon for the week ending Oct. 17, up 11.5 cents in a week and $1.668 higher than a year earlier.

Rail was not an easy substitute. USDA said high bids for shuttle railcars showed shippers were still worried about rail service in the coming months.

What it meant for carriers

With barge capacity limited, some shippers delayed deliveries. Iowa's governor signed a proclamation on Sept. 30 relaxing weight limits for trucks hauling grain, fertilizer and manure through Oct. 30. The waiver allowed vehicles up to 90,000 pounds gross on Iowa roads other than the interstates.

For agricultural truckers, the harvest coincided with river delays, strained rail service and diesel above $5 a gallon.