Contributions by FreightWaves Market Analyst Alexandria Quevedo
Even though it’s October, reminders of the devastating March floods in the western Corn Belt haven’t faded. Roads are still closed, farms drowned, and the volume of grain carloads leaving the region is still trying to play catch up.
The rainy spring destroyed billions of dollars of corn and soybean fields that were already planted and continues to harm this year’s harvest. Many Midwestern farmers had to plant later in the spring due to the flooding, and parts of the region were slammed by unusually heavy snow early this fall, leading to possible crop losses in central and eastern portions of North Dakota.
Some farmland has been underwater since mid-March due to several additional bouts of heavy rainfall throughout the spring and summer. This has made it difficult for Hamburg, Iowa farmer Mike Woltemath to move forward.
“I have some fields I haven’t been able to inspect yet as to see what damage happened from the flood,” Woltemath told AgWeb on October 21. Woltemath described the flooding as “horrible and depressing.”
The most recent corn projections from the U.S. Department of Agriculture (USDA) suggest a drop in production, at 19.8 million bushels in October. As a response, the USDA raised the price received by 20 cents. Corn farmers in the southern portion of the U.S. have had a better, more productive year than Midwestern farmers. Corn carried by rail accounts for about 49% of grain moved on rail, and about 5% of total carloads are grain, according to the Association of American Railroads.
The latest data from FreightWaves SONAR, in the chart above, shows that grain carloads (RTOGR.USA) have been down year-over-year since the harvest began, and will likely stay below last year’s levels through the rest of the season. Railroads moving corn from the Midwest are feeling more strain from low production in comparison to eastern railroads, which are moving corn from the more productive South. Farmers are eyeing 2020 and hoping that it will outperform this year’s harvest. Grain carloads are heavily dependent on harvest yields and location; therefore, if yields are down, so are carloads.
The National Weather Service still has Flood Warnings in place for portions of the Missouri and Mississippi rivers, as seen in the FreightWaves SONAR Critical Events map below. Besides rail, the persistent flooding continues to slow down road transportation, too. It seems like crews have been endlessly repairing roads and bridges in the Midwest. But the state departments of transportation in both Iowa and Nebraska have made progress, opening some routes. They have been focusing on interstates – mainly I-29 in this case – and state roads.
“We have been able to get in some of these areas to make some repairs, but we do have some significant damage on a couple of those [interstate] ramps,” said Scott Suhr, the Iowa Department of Transportation’s district transportation planner for southwestern Iowa. “Those ramps will remain closed until the water recedes and we can get in there to do our inspection.”
Seven major roads have been impacted in counties bordering the Missouri River. It’s been difficult to keep up with repairs because many areas have been hit by repeated rounds of rainfall. Crews would open a road, only to close it again days or weeks later.
“Unfortunately, we’ve had to close roads three or four different times in parts of western Iowa,” added Schur.
In Nebraska, crews have finished 58 of 85 repair projects relating to the floods. Initially 27 bridges were off limits, but now only three of them remain closed. As in Iowa, work in Nebraska has been concentrated on interstates and state highways.
Because local road repairs are farther down the list of government projects, some Nebraska farmers like John Tyson have spent thousands of dollars to fix their own roads.
“Rented a scraper to move dirt. You got to buy another Bobcat so you have a way to move trees,” said Tyson.
There is a positive note – USDA Secretary Sonny Perdue said some farmers who applied for and have been approved for disaster aid will get their checks soon. One Iowa farmer whose bins busted in the floods said his potential payment won’t make him whole. However, he appreciates the assistance. The USDA is working with states and block grants to cover damage to non-traditional items such as timber and animal facilities.