WASHINGTON, DC, US — On Sept. 29, US Agriculture Secretary Tom Vilsack announced $3 billion in investments aimed directly at “urgent challenges facing agriculture today,” as part of his work as co-chair of the President’s Supply Chain Disruptions Task Force.

Of that total, $500 million was specified to be distributed by the Commodity Credit Corp. in ways relieve near-term obstacles related to the marketing and distribution of commodities from increased transportation challenges, scarcity and the rising costs of materials.

“American agriculture currently faces unprecedented challenges on multiple fronts,” Vilsack said. “The coronavirus pandemic has impacted every stage of our food supply chain, from commodity production through processing and delivery. Farmers, ranchers and forest landowners increasingly experience the impacts of climate change as severe storms, floods, drought and wildfire events damage their operations and impact their livelihoods. We know these challenges will continue into 2022, and others may emerge. Through this comprehensive set of investments, USDA will take action to prevent the spread of African swine fever, assist producers grappling with drought and market disruptions, and help school nutrition professionals obtain nutritious food for students. Tackling these challenges head-on better positions USDA to respond in the future as new challenges emerge.”

Rail activity

US railroads originated 2,496,209 carloads and intermodal containers and trailers in September, down 2% from September 2020, the Association of American Railroads said on Oct. 6 in an update to monthly rail volume in the United States. 

US carload volume in the ninth months of 2021 totaled 1,167,682, up 4%, or 47,858 carloads, over September 2020. Improvements were recorded for 15 of 20 carload commodity groups. That list included coal, up 40,954 carloads, or 14%; crushed stone, sand and gravel, up 11,107 carloads, or 13%; and primary metal products, up 8,675 carloads, or 22.4%.

Among the groups notching a decline from September 2020 were grain, down 17,312 carloads, or 15%; motor vehicles and parts, down 22,486 carloads, or 28%; and petroleum and petroleum products, down 1,616 carloads, or 3%.

But while carloads overall improved, intermodal volume in September totaled 1,328,527 containers and trailers, down 7%, or 95,317 units, from the same month a year earlier. AAR’s president said that’s partly a result of logjams at warehouses and severe capacity shortage in trucking that awaits most containers and trailers as they come off the rails. 

“Rail intermodal volume is clearly not what it has been and could be,” said John T. Gray, senior vice president of the AAR. “Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows. Unfortunately, due to limited availability of downstream truck and warehouse capacity, that’s not happening right now with predictable impacts on rail intermodal volume.” 

Railroads were doing their part to ease pinch points where possible, Mr. Gray said.

“There is no single solution to this problem, but railroads are bringing intermodal yard capacity back online to increase storage availability as well as working with customers and truckers to accelerate container pickup among other efforts,” he said.

Cumulative rail volume for the first nine months of 2021 was 9,009,639 carloads, up 8%, or 658,222 carloads, from the same period in 2020; and 10,812,108 intermodal units, up 10%, or 976,362 containers and trailers, from last year, the AAR said. Taken together, US carloads and units in the first 39 weeks of 2021 totaled 19,821,747, up 9% from the like period last year.

The AAR’s Oct. 6 release also featured weekly North American carload and intermodal volume figures for the week ended Oct. 2 in 10 carload categories: chemicals, coal, food and farm products excluding grain, forest products, grain, metallic ores and metals, motor vehicles and parts, nonmetallic minerals, petroleum and products, and other. 

US rail traffic in the week was 515,849 carloads and intermodal units, down 0.5% compared with the same week in 2020. The total comprised 241,910 carloads, up 4% from the same week in 2020 and 273,939 containers and trailers, down 4% compared to 2020. Grain was one of four carload groups to post a decline compared with the same week last year, the others being motor vehicles, petroleum and other. Grain carloads in the week totaled 26,007, down 2% from the same week last year, bringing the 2021 total to 892,929 carloads for a weekly average of 22,893, up 8% from the same period in 2020. 

Canadian railroads, including US operations of Canadian Pacific and CN, reported 81,835 carloads in the week, up 1%, and 70,024 intermodal units, down 9% compared with the same week in 2020, the AAR said. For the first 39 weeks of 2021, Canadian railroads reported cumulative rail traffic volume of 5,782,686 carloads, containers and trailers, up 5%. Canadian grain carloads in the week totaled 9,453, down 7% from the same week in 2020, bringing the total for the year to 343,696 carloads, or 8,813 per week on average, up 0.1% from last year.

Mexican railroads, including US operations of GMXT, reported 16,697 carloads for the week, down 6% compared with the same week last year, and 12,725 intermodal units, down 26%. Cumulative volume on Mexican railroads for the first 39 weeks of 2021 was 1,421,858 carloads and intermodal containers and trailers, up 5% from the same point last year. Mexican grain carloads in the week totaled 1,298, down 19% from a year earlier; the cumulative grain carloads for the year reached 82,137, which equates to a weekly average of 2,106, down 8% from last year.

Rail volume for the week on 12 reporting US, Canadian and Mexican railroads were 340,442 carloads, up 3% compared with the same week last year, and 356,688 intermodal units, down 6% compared with last year. Taken together, weekly rail traffic in North America was 697,130 carloads and intermodal units, down 2%, bringing the continental cumulative for the first 39 weeks of 2021 to 27,026,291 carloads and intermodal units, up 8% compared with 2020. Grain carloads in the three countries during the week totaled 36,758, down 4% from the week a year earlier, bringing the cumulative 2021 total to 1,318,662 for a weekly average of 33,812, a 5% increase from the same period in 2020.

Rail prices

The US Department of Agriculture, in its Oct. 7 Grain Transportation Report, said the average October shuttle railcar bids/offers in the week ended Sept. 30 were $270 per car above tariff in the secondary market. That was $538 lower than the previous week and down $711 from the same week in 2020. There were no non-shuttle bids/offers in the week, the GTR said.

Meanwhile, grain traders and buyers indicated to Milling & Baking News that by Oct. 6, single rail cars for the current quarter were being sold as low as $50 per car over tariff in the secondary market, a drastic decline from as high as $400 a week earlier. Ideas among traders were that shippers in the gut slot of harvest as they took in corn, soybeans, sorghum, millet and other crops found it unfeasible to load supplies simultaneously and needed to sell their freight. Some grain traders took advantage of the discounts, locking in cars for November and December after confirming that customers in the country were keen to restart wheat loading as soon as fall crops were stowed.

Barge activity

US barged grain movements totaled 492,522 tons in the week ended Oct. 2, a 163% increase over the previous week, but 3% lower than the same period last year, the US Army Corps of Engineers said 

In the same week, 295 grain barges moved down river, an increase of 183 barges from the previous week. There were 637 grain barges unloaded in the New Orleans Region, 63% more than the previous week.

Ocean freight activity

For the week ended Sept. 30, 26 oceangoing grain vessels were loaded in the Gulf, 40% fewer than the same period last year, the Agricultural Marketing Service said. In the 10 days starting Oct. 1, 53 vessels were expected to be loaded — 4% fewer than the same period last year. 

 As of Sept. 30, the rate for shipping one tonne of grain from the US Gulf to Japan was $84.25, up 2% from the previous week. The rate from the Pacific Northwest to Japan was $46.50 per tonne, 2% more than the previous week.

Trucking activity

The US Department of Transportation, via the Federal Highway Administration, recently awarded $5 million in “quick release” 

emergency relief funds to assist the Louisiana Department of Transportation and Development in repairing roads and bridges damaged by Hurricane Ida, the USDA’s weekly grain transportation report said.

FHWA’s quick-release ER funds program provides funding for highways and bridges damaged by natural disasters or catastrophic events. In the case of Ida, the funds are intended to restore the most essential transportation links disrupted by the hurricane. The repairs will stabilize damaged roadway embankments, replace destroyed signage, and repair and rebuild damaged roads and bridges, including removal of bridge scour, which are large depressions in the sediment around bridge foundations left by fast moving water.

Additional, subsequent funds could come available to continue less urgent road and bridge repairs.

 Fuel prices

For the week ended Oct. 4, the US average diesel fuel price increased by 7.1¢ from the previous week to $3.477 per gallon, $1.090 above the same week last year. At $3.43 per gallon, Midwest diesel prices are the highest since December 2014.         

The average on-highway diesel fuel price per gallon by region in the week ended Oct. 4