Keeping Mississippi River open vital to fertilizer shipments

The possibility of closing the Mississippi River between St. Louis and Cairo was brought to light in late fall due to low water levels and rock pinnacles at Grand Tower and Thebes that could impede barge traffic.

Action by the Army Corps of Engineers to remove rock pinnacles and release water from reservoirs, as well as recent precipitation, has kept southbound shipments of grain and northbound shipments of fertilizer moving thus far.

“We’re still being impacted because we’re moving wider barges, but we had a pretty good fall season,” Joe Dillier, Growmark director of plant food, said at the Illinois Agricultural Legislative Roundtable hosted by Illinois Farm Bureau. “Frankly, the fall season was wide open, so I think with the fall season being open and what we’ve been able to move, I think we’re going to be OK for spring, assuming that we’re not completely shut down in February. There’s no guarantee, but things are looking a lot better than they were.

“We’re shipping fertilizer products from the Gulf of Mexico north, moving it up into St. Louis, the Illinois River and the upper Mississippi (before freezes). There is product moving on the river all year long.”

The initial closing was projected for Dec. 10.

“The river has not closed. Right now, it looks like we’ll get through January, hopefully through February and then get into March and the close won’t be an issue,” Dillier said.

Although shipments continue, barges moving goods from New Orleans are not filled to capacity in order to traverse the shallower water.

“There is ammonia that is produced at large manufacturing facilities near New Orleans, and it is also an import point for a lot of products from overseas,” Dillier said.

Urea is shipped from the Middle East and phosphate from Florida to the Mississippi River.

“That river is a vitally important thing, and it’s vitally important to agriculture because of the grain that moves down it. Fertilizer is a prime input that moves up the river,” Dillier said.

“Growmark is big in Midwest. We’re big in Illinois and Iowa. We also cover the eastern Corn Belt in Indiana and Ohio and go all the way to the east coast. We use the Ohio River to go all the way out there. The river system is very big for us.

“Urea will probably be a product that I’m guessing that 90 percent of what we move we move on the river. Not necessarily the Mississippi River, but the stuff that moves in Illinois and the stuff that moves in Iowa, virtually 100 percent of that we move on the river.

“Now if you don’t have the river, we would find some alternatives and for some of these products that would be expensive. In this business it’s all about moving stuff around, finding the least-cost logistics, taking products from where they’re at, moving it to where it needs to be and doing it at a cost that hopefully allows some margin of profit.”

Dillier said if the river closed, the cost would be substantial to find alternative routes for shipping products.

“The cost would be substantial for ammonia and urea, maybe not as big for potash because a lot of that is transported by rail from western Canada,” he said. “But as we’ve learned in the last several weeks, we probably took the river too much for granted. It is a vital thing for us.”

Dillier noted the company’s appreciation to the government, agriculture groups and others for the coordinated efforts in keeping the river open

Fertilizer is a seasonal business, and any closure during these prime shipping months would have been very problematic.

“It’s not like gasoline or other fuel. People are using those every day,” Dillier said. “For us, it’s a seasonal product, so especially now that agriculture is a very hot area and we’re planting a lot of corn and soybean acres, we’re using a substantial amount of fertilizer to feed those crops.

“If we had shut the river on Dec. 10, there was the strong potential that come the spring season when that seasonal use happens, we would have had substantial shortages. At this point, it looks like we’re going to get through that. We’ll see how February goes, but it’s looking much better.”