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Rail expected to absorb diverted freight off rivers

Illinois Correspondent

PEORIA, Ill. — With 15 confirmed deaths in Missouri and nine in Illinois as of press time Sunday – and thousands more residents displaced – the human element of the late-2015 flood of the lower Mississippi River tops the list of concerns in its wake.
The rare, historic late December flood’s impacts on agriculture cannot be underestimated, either, from disruptions to barge traffic, terminals and grain elevators to its upward impact on commodity prices.
As of Jan. 3, St. Louis area residents were shifting into cleanup mode, returning to their southeastern Missouri homes and salvaging what remained. The Mississippi River receded between 3-4 inches from its record 48.86-foot crest at Cape Girardeau, according to the St. Louis Post-Dispatch.
However, 81 miles of the Mississippi River remained closed in two segments, closing off key barge transportation channels for soybeans and grain heading for the Gulf of Mexico for export. In addition, 50 miles of the Illinois River remained closed, the U.S. Coast Guard reported.
“While the high-water levels near St. Louis and throughout the Mississippi River are expected to relax in the near future due to drier weather in the forecast, the consequences to barge transportation and grain exports will nonetheless remain, even with ideal weather,” said Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), in an email.
“All of the water from this region is flowing to the lower Mississippi River, which accounts for 58 percent of U.S. soybean exports and 67 percent of U.S. corn exports – by far, the leading export region for both commodities. It will take three to four weeks for the water in the upper Mississippi and Ohio river regions to be expelled from the lower Mississippi River into the Gulf of Mexico.”
Steenhoek noted 80 percent of U.S. soybean exports occur between the months of September and February. “Prior to the South American harvest, which occurs in February, March and April, the U.S. is the leading supplier of soybeans on the global marketplace. As a result, any disruption of service during this critical time frame is of concern,” he said.
Fortunately, an improved U.S. freight railroad system is well positioned to accommodate commodities diverted from barge to other transportation modes, according to Steenhoek. He credits Class 1 railroads with improving their networks by investing heavily in more railcars and focusing more on agricultural commodity movements, resulting in more capacity than is currently in demand.
“In addition, many farmers are electing to store a sizable percentage of their 2015 harvest in order for a more opportune time to sell. As a result, railroads have available capacity to absorb additional volumes,” he said.
The shutdown of the “Big River” from widespread floods spurred a surge in commodity prices, with cash premiums for soybeans in the U.S. barge market jumping as high as 70 cents per bushel last week, Reuters reported. In addition, surcharges for corn jumped by almost a third, according to the news agency.
As far away as Louisiana and southern Mississippi, cash bids for soybeans rose by 10 cents per bushel and corn bids, by 5 cents, in an effort by elevators to secure local crops. The surge in prices resulted in long lines at some Illinois and Missouri grain elevators with farmers looking to sell their bumper crop, while other river-accessible elevators located in the southwestern edge of Illinois were closed due to flooding.
Also closed were terminals in Sauget and Rockwood, along with two flour mills in southwestern Illinois.
The Army Corps of Engineers had feared as many as 19 federal levees on the Mississippi River and its tributaries would be breached by the floodwaters. There was a levee breach Saturday night in southern Illinois that occurred near the agricultural hamlet of Olive Branch. Residents there were issued voluntary evacuation orders after the Len Small Levee west of the Horseshoe Lake Conservation Area was topped, according to the Alexander County Emergency Management Agency.
St. Louis received 5.91 inches of rain from Dec. 26-28, according to data, fueling the lower Mississippi River flood that is being recognized as the worst since 2011 and, possibly, the Great Mississippi River Flood of 1993 that destroyed up to 100,000 structures.
The total costs resulting from the flood, both human and economic, will continue to be calculated in the coming weeks and months.