By Mary Hightower
Bins and barges play a key role for beans and basis.
The moment a pod is plucked from the soybean plant, its role as a market commodity begins. In a typical scenario, harvested soybeans would go to an elevator, be checked for quality and moisture content, then be dried or loaded onto gulf-bound barges for export.
However, as commodity prices flag, especially near harvest time, farmers who have built bins are able to store their soybeans and other commodities and sell them when prices improve.
Not everyone has bins though, or enough bins to store all of their commodities. For those without lots of storage, their crops can wind up on a barge.
The barges that ply the Mississippi River are essentially a group of large rectangular flat boats onto which grain and other commodities are loaded. These large flat barges are “towed” actually pushed by powerful flat-hulled vessel with a square front. The flat hulls are important for river transport because of the low water levels compared to the open ocean where keeled boats operate.
Despite their flat bottoms, these boats do displace water and sit deeper in the river when loaded. This depth is called “draft.” When water levels in the Mississippi drop below a certain level, the U.S. Coast Guard can place restrictions on shipping including reducing the number of barges in a tow and reducing the draft to prevent the barges from grounding on the river bottom and snarling traffic.
Problems occur at harvest time as the demand for barges increases, but restrictions mean fewer barges can make the trip. That adds up to higher shipping costs.
“Lower Mississippi River barge freight has been increasing since early July — for seven out of the last eight weeks per USDA’s Agricultural Marketing Service,” Stiles said. “By my rough estimate, the freight increase over the last eight weeks is equivalent to 19 cents per bushel.
“With draft and tow restrictions, we’d expect to see freight costs continue higher,” he said. “This will add pressure to grain basis” as commodities back up at the elevators.
“The lower Mississippi typically loads barges to about 1,700 tons,” Stiles said. “Each one of those would be about 56,000 to 57,000 bushels of soybeans,” he said. “Removing four to five from a tow is equal to 228,000 to 285,000 bushels.”
The storage issue
According to the National Agricultural Statistics Service, Arkansas had 235 million bushels of on-farm storage in 2024.
Even so “there isn’t enough on-farm storage in the state to hold the entire crop until market conditions improve,” Stiles said. “Given current estimates from NASS, the state's combined production of corn, soybeans and rice is expected to reach 491 million bushels in 2025.
Source : uada.edu