Barge Movement Expected to Be Heavy

June 20, 2001

USDA, in an update of the grain transportation situation, said Tuesday significant increases in barge movements that began in June could extend into August. Grain traffic at Locks and Dam (L&D) 15 at Rock Island, IL, began in early March and increased almost weekly until navigation restrictions were implemented in April due to flooding conditions.

Grain and soybean production is projected to be down 2.34% from last year. The 2001-02 outlook for U.S. wheat calls for smaller crops, reduced use, declining stocks, and higher prices. Wheat production is projected to be down 12% from last year. Winter wheat production is forecast at 14% below last year's estimates.

U.S. corn exports are projected to increase due to reduced competition from foreign exporters. The season average soybean farm prices for 2001-02 are projected to decline to $3.90-$4.50 per bushel. In the second quarter of 2001, average ocean freight rates for two key grain routes from the United States to Japan were down slightly from the same quarter in 2000.

While waiting for the Surface Transportation Board to issue new rules governing major railroad mergers major railroads entered into alliances to provide expanded and improved service. Year-to-date, western railroads have originated 4.8% fewer railcars than during the same period in 2000. In the East, grain cars increased 8.2% compared to last year for the first 18 weeks of 2001. Due to improved cycle times, Norfolk Southern expects its grain-hauling capacity to remain the same and service to be adequate. It reports a decrease in cycle time on 50-car unit trains.

In fuel markets, diesel prices remain volatile. While the benchmark indicator trended downward to $28.88 in May from $30.33 a year ago, the lower prices do not correspond to price data for diesel at the pump.

The information is included in the report, "Grain Transportation Prospects," and is available on the Internet at www.ams.usda.gov/tmd/mta/index.htm. For more information, contact Karla Martin, USDA-AMS-TMP-MTA, Room 1209-S, 1400 Independence Avenue, SW, Washington, DC 20250, tel. 202-690-1303, fax 202-690-3616, or e-mail Karla.Martin@usda.gov. The next issue of grain transportation prospects will be published in August.