With the Mississippi River near record low levels, disruptions to river barge traffic are hampering fertilizer deliveries to newly harvested fields in the US Corn Belt.
While the bulk of nitrogen, phosphorus, and potassium-based fertilizers is applied to fields in the spring, farmers also apply the fertilizers after the fall harvest to replenish soil nutrients. Some 61% of US corn has been harvested as of this week, as shown by this Gro Portal display.
Restrictions on barge capacities heighten the risk of localized supply outages at key fertilizer distribution hubs throughout the Corn Belt. That could force some farmers to reduce their post-harvest fall applications and could increase upriver fertilizer prices relative to prices downriver at New Orleans.
Fertilizer wholesalers and retailers traditionally begin purchasing inventory for fall use during the third quarter after spring planting, but they will also buy just-in-time volumes as the fall application window nears. A significant portion of these volumes load in New Orleans, Louisiana, (Nola) — a major trading hub for imported and domestically produced fertilizers — and transit upriver.
Grain shipments moving south on the Mississippi River have also been affected, as transportation costs have surged and grain export volumes have dropped by double-digits compared with previous years. That has placed US corn exports at a competitive disadvantage to other origins, especially Brazil, as Gro wrote about here.
Below-average rainfall and persistent drought conditions along the Mississippi River, as shown by this Gro Portal display, have parched the major trade flow artery. That has forced barge operators to reduce barge drafts — the height of the waterline on the barge hull — resulting in cuts to volume capacities of as much as 30% per barge compared to normal river conditions, according to industry estimates.
The ongoing logistics problems on the Mississippi River further squeeze US farmer profit margins. That could translate to cutbacks in input expenditures for spring applications, which in turn could reduce crop yields.
Gro’s Global Fertilizer Impact Monitor is the first tool to quantify the potential impact of reduced nitrogen fertilizer applications on crop production worldwide in a fully transparent way. The monitor — which Gro built with support from the Bill & Melinda Gates Foundation and in partnership with the International Fertilizer Association and CRU Group — is free for anyone to use and can be found here.