Dumping grain at elevatorAs water levels on the Mississippi River continue to fall, more record lows are being recorded. Navigation and transportation on the river are being challenged in ways not seen since 1988. Memphis, Tennessee, is the latest site of another record-low water level. According to the National Weather Service, levels reached a low of -10.75 feet on October 17th, and have since broken their record by hitting -10.81 feet.

The American Commercial Barge Lines (ACBL) says the industry reduced Lower Mississippi River drafts to 9’ on October 17, reflecting a 24% to 30% reduction in tons per barge compared to “normal” conditions. However, shippers must pay the same per barge regardless of how full it is. Dead freight is the amount of money paid by the shipper who is unable to load a full barge.

Due to this, the cash basis for farmers has weakened at river terminals, and it’s leaving growers in a difficult position of deciding if it’s worth the lower sales price to sell their grain or should store it after harvest.

Read more on drought’s impact on shipping here.