A newly constructed barge terminal for loading and unloading on the Missouri River in western Iowa should provide a new marketing option for Midwest corn and soybean producers. The facility's ability to ship millions of bushels of row crops downstream toward the Mississippi River could also increase the prices grain buyers will pay for their grain.
The Port of Blencoe, operated by NEW Cooperative Inc. officially opened earlier this month in Blencoe, Iowa, between Omaha, Nebraska, and Sioux City, Iowa. The port will be served roughly seventeen times a year by about six barges and a single towboat.
Access to river barges means farmers will get paid higher prices for their crops by shrinking the local basis, the difference between the local cash market and the futures price. Allendale broker Mike Lung said just in the last month, the cash price "skyrocketed" in Manona County leading up to the port opening.
Instead of a basis near 35 to 40 cents under, "this port could potentially see that normalize near 25 to 30 cents under the Board price in years where we are well supplied," Lung told Agri-Pulse.
This new port is 36 miles north of the next port at Blair, Neb. Until 2004, barges also docked at the Big Soo Terminal in Sioux City, 45 miles north of Blencoe. The Sioux City port averaged roughly 160 barges per year but hasn't since then, according to the Sioux City Journal.
Iowa Secretary of Agriculture Mike Naig said the Blencoe port will provide more direct international access to western Iowa farmers that they did not have before.
“It’s a doorway to global trade, I call it an on-ramp to the superhighway to the Gulf of Mexico,” Naig told Agri-Pulse.
Frank Huseman, operations manager for NEW Cooperative Inc. said developing the facility was a three-year process. The cooperative saw the barge terminal construction as an opportunity to reduce transportation costs of bringing fertilizer and other crop protection products upriver from New Orleans.
“We have the ability to bring roughly 120,000 tons up or about 80 barges coming upstream,” he told Agri-Pulse.
Before, any fertilizer the NEW Cooperative purchased heading up the Mississippi River had to be dropped off in Dubuque, Iowa on the eastern side of the state and then trucked to certain retail facilities.
Huseman said the company will be able to ship roughly four million bushels of corn or soybeans back downstream each year, and they hope to increase loads in the future. According to the Iowa Corn Growers Association, 2.06 billion bushels of corn were exported from the state in 2019.
Several of the counties in western Iowa along the Missouri River average 177 to 203 bushels per acre for grain production each year, according to USDA’s National Agricultural Statistics Service.
Mike Steenhoek, executive director of the Soy Transportation Coalition, assisted NEW Cooperative with the planning and constructing phases of the project.
Steenhoek noted the facility is expected to annually accommodate 240,000 tons of soybeans, corn, dried distillers grains, dry fertilizers, ag lime, scrap metal, and rock.
“One of the motivating factors toward this facility is you have a strong export program and a lot of international demand for soybeans, but yet (NEW Cooperative) has had limited ability to capitalize on that,” Steenhoek told Agri-Pulse.
Steenhoek noted western Iowa soybean farmers often experience some of the widest and most negative basis levels in the state. The basis is normally wider the farther a farm is from its market.
For the last 25 years, Larry Buss, a farmer from Missouri Valley, Iowa, has hauled his corn and soybeans to a Cargill terminal at Blair, just north of Omaha, or to a Bunge terminal south of Council Bluffs, Iowa, because prices were better. He said he hopes the new port will provide more competitive basis prices in western Iowa and eastern Nebraska.
He said he expects the basis to be closer to what it is at the Mississippi River ports in eastern Iowa.
Buss said there really hasn’t been any barge traffic going north of Blair, Neb., until now. He hopes the port will be a catalyst to show other entities to invest in more ports on the Missouri River.
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Steenhoek said that building a barge terminal on the Missouri River comes with risks because of rising and falling water levels on the river. The Army Corps of Engineers regulates the amount of water released from upstream.
“With the Missouri River, the potential is even greater because they don’t have an inventory of locks and dams that can help regulate the water level like we see on the Mississippi and other rivers,” he said.
The Army Corps of Engineers regulates flows from upstream reservoirs to address a series of needs, including maintaining sufficient water in the lakes to protect wildlife and maintain recreation usage.
Huseman said the cooperative went into this project understanding that they would have to address variations in water levels, including the possibility of excessively high Mississippi River levels. In the past, barges have sometimes made it down the Missouri River only to be unable to get into the Mississippi because the water levels were too high.
“Any time you are dealing with this type of a facility, you have to be aware it’s a little different ballgame that you are dealing with,” he said. Huseman said the facility is designed to operate in low water levels as well as high. If water levels are too low or too high, they can transport products by rail or truck if necessary.
Steenhoek said the Missouri River should be an engine of economic growth for industries and communities in western Iowa, eastern Nebraska, eastern Kansas, southern South Dakota, and Missouri.
“The river is more reliable than a lot of people think and that is one of the messages we are going to continue to convey throughout this year,” Steenhoek said.
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