USDA Works to Relive Grain Movement Congestion

WASHINGTON - Nov 2/05 - SNS -- U.S. Agriculture Secretary Mike Johanns said the USDA will work to free up barges on the Mississippi River in an attempt to reduce stress on the grain transportation system caused by Hurricane Katrina.

"USDA, the U.S. Army Corps of Engineers and the U.S. Coast Guard have been working aggressively to help the transportation system return to normal as quickly as possible along the Mississippi following Hurricane Katrina," said Johanns. "It is critically important to have barges available during peak grain harvest season and our goal is to quickly unload barges so they can be reloaded with newly harvested grains."

USDA will be accepting proposals on a competitive basis from industry to help unload barges carrying grain commodities, with nearly $7.6 million in funding available for this effort. USDA will not consider offers in excess of $30 per ton, which reflects current barge freight rates.

In order for barges to qualify, they must have been loaded and shipped to the New Orleans area before Aug. 29, 2005, when Hurricane Katrina made landfall. Barges must be unloaded by Dec. 1, 2005, unless USDA issues an extension of that deadline.

The USDA said the goal of this action is to quickly move empty barges upstream to areas where grains are being harvested. There are no restrictions on the actual off-load location, final destination or disposition of the agricultural commodities; however, there must not be a negative market impact. This offer of economic assistance is only available to unload barges of agricultural commodities in order to facilitate barge availability.

Previously, USDA has provided freight differential incentives to move 294,770 metric tons (MT) of corn, wheat and soybeans through Great Lakes and Pacific Northwest ports. USDA incentives also promoted the movement of 209,238 MT of damaged corn out of New Orleans and the storage of nearly 42-million bushels of corn and wheat in alternative facilities, relieving the pressure placed on commercial markets because of the transportation stress.