Transportation Tangle: Additional Reports
The following information is bonus material from Top Producer. It corresponds with the article "Transportation Tangle” by Charles Johnson. It can be found on page 22 of the Summer 2008 issue.
Damaged railroad bridges and undermined roads in flooded areas interrupt normal flows of both grain and fertilizer, says John Hester, owner of Nichols Ag, near Muscatine, Iowa. It tacks additional difficulties on an already-stressed transportation system.
"This year started with bad roads from ice. We really struggled with that on farm to market roads even before the flood. Then, after the flood some of the gravel roads are in pretty bad shape. No semis are allowed on some. We've had an adventure with transportation due to the flood, that's for sure,” Hester says.
"This close to the Mississippi River, farmers store the grain. We pick it up and deliver to the river terminals. The road problem and the extra miles we have to drive is exacerbating the fuel problem. We have a 200 bushel corn crop from 2007 to haul in and that takes more time, anyway. That was disrupted when we couldn't get barges up and down the river. It became quite an ordeal.”
In the end, farmers feel the transportation pinch.
‘There's no alternative but to charge fuel surcharges. People delivering to us are charging alternate route charges. It all goes down to the farmer somehow,” Hester says.
He thinks the area's farmers still have good opportunities for profit this year, however.
"We're cautiously optimistic farmers will do well in 2008 and 2009. They would have done better without the flood but there are still opportunities to do well if they're cautious. The guy that has good insurance coverage, who does a decent job of taking care of the farm, who sells when it's profitable rather than trying to hit the very top of the market, can still do pretty well,” Hester says.
"We still have a great opportunity. If's just difficult to see the opportunity when you look at the extra effort needed and the expense due to what I call gouging by some input suppliers, along with the other costs affected by fuel. Most farmers are pretty optimistic when you talk to them alone.”
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During the flood, ADM managed to reroute its transportation network to keep plants running.
"We had the flexibility to transfer the grain loading needed for export to the Illinois River,” says Royce Wilken, president of American River Transportation Co., ADM's barge subsidiary.
"It did cut our productivity 20% because we were restricted on tow sizes. Below St. Louis, we could only run 25 barges where we'd normally run 36. We had the same dollars in labor and cost of operating and had 15,000 tons less to spread it across.”
Wilken anticipates Mississippi River traffic resuming normal operations.
"We don't want to put any pressure on the levees, though. We wan to make sure they hold,” he says.
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On the whole, Iowa's highway bridges were not heavily damaged during the flood. Problems tended to be more on the roadway approaches to them, where rushing water overflowed, says Norm McDonald, Iowa Department of Transportation bridge engineer.
"At the high point of the flood, we had 51 road sections closed because most had bridge problems. The bridges themselves weren't usually the problem. That's typical for our bridge design. The bridges are a little higher than the roadway, so all the water will not be forced through the bridge but will flow around the bridge,” he says.
"A few county bridges have been lost but the state system came out pretty good. We have 125 miles of state roadways damaged and it may take a while to get that replaced, at least where we'll have to do a full-blown replacement projects. The counties have a lot of damage on gravel roads and it's going to take a while to fix that. I would think most of the damage will be fixed by harvest time, though.”
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Initial post-flood reports by a few shortline railroads in Iowa put rail damage at $23 million with as many as six bridges lost, says Diane McCauley, Iowa Department of Transportation policy analyst.
"We're finding the railroads working through things slowly but steadily. Until bridges can be replaced, routes will be longer and costs higher but goods are moving,” she says.
"Ingenuity and cooperation will make things better. Things will not be great for a while but I don't think there'll be a huge impact once we get some heads together. It will be worked out. Things may not be as neat and tidy as in the past. There may be some changes. It's possible some areas that previously had access to two Class I railroads may just have one now.”
Iowans still harbor hope for 2008 crops.
"We're clearly behind where we were a year ago in production but there's still a lot of time left. If Mother Nature cooperates, we still stand a chance of a pretty decent crop,” says Craig Floss, Iowa Corn Growers Association chief executive officer.
"Highway destruction could make things tougher than usual. The washouts on the farm-to-market roads definitely hampers farmers ability to deliver grain.”
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Missouri reports considerably less infrastructure damage than Iowa.
Tim Kelley, Missouri Farm Service Agency executive director, just back from a visit to flooded areas, says, "I haven't seen a lot of infrastructure damage but I assume some of the county roads have culverts out. There are rail lines washed out, with the rails twisted, but they got to work on that pretty fast.”
He hears farmers from flooded areas voicing worries about delivering on grain contracts. "There are lots of concerns that they contracted at a high price, and now what? I don't the answer to that. The elevators and grain companies will determine how that turns out. I just hope they work it out in an agreeable way.”
