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FARM SCENE: Barges wait for river to recede; some farmers face higher costs

By Josh L. Dickey, Associated Press, 5/2/2001 00:57

MINNEAPOLIS (AP) With the flooding Upper Mississippi River still unsafe for barges, much of last year's harvest grain north of St. Louis is piling up.

While the grain can wait, some farmers may face additional trouble and expense both in selling their grain and making sure they have fertilizer for spring planting. Barge traffic is expected to start moving in mid-May, as much as two months later than usual.

''The river is one part of the complete pie for the farmer,'' said Mark Sackmaster, senior corn merchandiser for Cenex-Harvest States, a farmer-owned cooperative in Inver Grove Heights.

''You take that out of the equation and he winds up moving his grain into other arenas that aren't quite as aggressive as the river would get,'' Sackmaster said, including shipping by rail or truck to the Great Lakes or West Coast.

Many farmers would still be holding grain even if the river were moving, Sackmaster said, because futures (selling the grain at roughly $1.80 a bushel to be delivered in summer 2002) are more lucrative than the $1.50 a bushel that corn fetches right now. But those futures prices could drop unless the supply gets moving.

''Nobody will buy (grain) from us up here if they know the guy selling it can't deliver,'' said Jerry Fruin, a transportation economist at the University of Minnesota. ''So we're also stuck with the holding cost until we're ready to move it out.''

That cost is marginal, and farmers are more intent on spring planting than marketing this time of year anyway, Sackmaster said. But the effects could be felt many months down the line, including reduced export business.

Spring planting also might be delayed as farmers wait for anhydrous ammonia that often moves up the river from the Gulf of Mexico.

Suppliers in Minnesota say they stockpiled enough fertilizer to fulfill orders at prices locked in last year for farmers who need to apply it before planting during the first weeks in May. But once that's gone, trucks and trains considerably more expensive and less efficient than barges would have to be relied upon to replenish the supply.

That could drive fertilizer prices, already inflated because of the ballooning price of natural gas, even higher. Farmers that haven't locked in pre-plant fertilizer prices are last in line to receive the diminishing supply, and could pay soaring prices once it becomes available.

While farmers can make do without pre-plant fertilizer, their yields could drop without the starter fertilizer that goes in at the same time seeds are planted, said Chuck Schwartau, a University of Minnesota extension educator. Much of that starter fertilizer also needs to move up the Mississippi from the Gulf of Mexico.

Farmers who are scrambling to plant their fields might also be faced with the extra burden of marketing their grain once the river gets moving again.

Mississippi barge operators keeping busy from St. Louis south, where the river is open are anxious to begin moving commodities to the head of the river's shipping corridor, where some business is already being lost to alternative markets via trucks and trains, said Russ Eichman, executive director of the Upper Mississippi Waterway Association, a barge-operator trade association.

While confident that eight months worth of shipping about 17 million tons of commodities in a normal season can be moved up and down the river in six months, Eichman said the swollen river is still affecting shippers.

''It's not going to get going with the snap of a finger once the waters recede,'' Eichman said. ''Everything takes a little time.''

-- Anonymous, May 02, 2001