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Mike Howell (00:00):
The dirt with me, Mike Howell, an eKonomics podcast where I present the down and dirty agronomic science to help grow crops and bottom lines. Inspired by eKonomics.com, farming’s go-to informational resource, I’m here to break down the latest crop nutrition, research, news, and issues helping farmers make better business decisions through actionable insights. Let’s dig in.
(00:38)
Welcome back to The Dirt, everyone. Glad you’re tuning in again this week. We’ve been starting a discussion talking about drought and the importance of the drought and how that’s affecting our crops. We got to thinking a little bit and the drought’s also affecting some other things. The Mississippi River is at low levels and it’s getting harder and harder to get barges up and down the Mississippi River, and that’s basically due to a lack of rain. We wanted to talk a little bit about the Mississippi River today, go through the importance of the river and what the river’s used for. To help me do that, we’ve got Cody Melle with us today. Cody, if you will, introduce yourself to our listeners and tell them what you do.
Speaker 3 (01:13):
Hey Mike, thanks for having me. Like Mike said, my name’s Cody Melle. I’m a Nutrien salesman, National Account Sales Manager at Nutrien. I’ve been in the industry for 11 years. I sell nitrogen, phosphate, potash up along the Mississippi River, deep south Delta, mid-south, right around in that area. So the Mississippi River is very impactful to my region and the customer’s in it.
Mike Howell (01:37):
Thank you, Cody. I was born and raised in Mississippi. I grew up about 20 miles from the Mississippi River near Vicksburg there and as long as I’ve been around, I’ve been talked about the importance of the river. We studied it in school. I’ve been to the military park over there at Vicksburg many times, and the theme of that is whoever controlled the river was going to control the war back during those days. That river is vital for the economy of the United States. People just don’t understand how much cargo goes up and down the river. Cody, do you have any information you want to share with us about why the river is so important?
Speaker 3 (02:10):
Yeah, Mike and I’m from Olive Branch, Mississippi, right by Memphis, Tennessee. Same with me, I was taught that in school. The Mississippi River is very important to basically the whole globe. It’s one of the world’s largest major river systems in size. When you include the Missouri River and the Ohio River and all of its tributaries, it becomes one of the most important commercial waterways in the world and one of North America’s great migration routes for wildlife, fish, birds. We’ve got plenty of things that the Mississippi River is important to, not just from agricultural standpoint. One of the things that I wanted to touch on with the Mississippi River is current present day it serves as daily drinking water for 62 cities across the United States serving 18 million people. That is a critical piece, not to mention what we’re going to be using it for, moving barges up and down the river with fertilizers, but it’s a major impact to multiple industries and communities and people that live along the Mississippi River basin.
Mike Howell (03:17):
Cody, you mentioned the wildlife and the fish, and I love to go fishing and catch those big catfish out of the river and anytime I can find where they’re loading grain on the river, that seems to be a good spot to go catch big catfish there. I’ve spent a good bit of time on that river and love to go duck hunting every now and then too. I’m not a fanatic about it like some people, but that’s the Mississippi River Delta. There is the best place in the world to go duck hunting when they’re flying through there. We understand the importance of that, but let’s focus in a little bit and talk more about agriculture and what commodities are going up and down the river as related to agriculture.
Speaker 3 (03:49):
Sure. Let’s start with you have nitrogen products, whether it be urea, UAN, ammonium sulphate. You’ve got phosphates such as MAP, DAP, triple, you got potash. And then not to mention, 60% of all the grain that we export out of the US is shipped down the Mississippi River, going through the port of New Orleans and the port of South Louisiana. When you measure that in tonnage, the port of South Louisiana is one of the largest volume ports in the United States, representing about 500 million tonnes of ship goods per year. The Mississippi River is significant to the national trade throughout our country. Not just agriculture commodities, you have petrochemical, iron ore, steel, rubber, paper, oils. You have all kinds of different commodities that are being traded up and down the river on a daily basis.
Mike Howell (04:48):
Cody, you mentioned the South Louisiana port and the port at New Orleans, but those are just two major ports. I know there’s a lot of ports up and down the river. What are some of the other important river ports?
Speaker 3 (04:59):
The Mississippi River flows through 10 states, but really there’s eight major river hotspots that I would call it that are greatly affected by the Mississippi River and that starts down in New Orleans, commonly referenced as Nola when you’re talking about fertilizer pricing. And then you have Memphis, St. Louis, Catoosa, Oklahoma, Mount Vernon, Indiana, Cincinnati, Ohio, Pekin, Illinois, East Dubuque, Iowa and Minneapolis, St. Paul, Minnesota.
Mike Howell (05:30):
All the way from north to south, up and down the river. We’ve got major ports that are handling these agricultural commodities. Cody, you mentioned how much goes up and down the river, but there’s other ways to transport things, and I know you deal with transportation a good bit, moving product around. Why can’t we just put all this stuff on the rail or put it on a truck and move it by truck?
Speaker 3 (05:50):
The thing about it is it’s timing. It’s obviously in this kind of environment, everybody wants something just in time like an Amazon delivery at your doorstep and we can move barges with significant volumes into these locations and you can’t do that by rail or truck to really get that just in time inventories at the right levels for the growers to be able to go in there and get their products when they need it. Not that rail and truck isn’t important, but when you’re talking about the river, the volume and the amount of tonnes that we can move on the river system becomes a challenge when we’re limited.
Mike Howell (06:26):
That’s right. We’re looking at huge volumes going up and down the river, but another aspect of that is probably going to be cost. Common sense tells me that anytime we can move larger volumes at a time, we’re going to be able to move it more economically. Is there a huge cost difference if we can put it on the water versus a truck or the rail?
Speaker 3 (06:44):
When you’re taking by rail and by truck, you don’t have the significant volumes that you can go with by barge. And when barges are going through the river system, we do have delays, we do have 29 locks that you have to go through to get to point A to point B. But at the end of the day, you are cost savings, you’re getting more volume at one particular time and you’re able to recharge quicker, whereas you have to rely on rail and secondary railroads and truck and traffic and things of that nature that just cut into those times otherwise, and the significant volume that you can move by barge really tends to help from an economic standpoint.
Mike Howell (07:31):
Cody, you’re talking about the big volumes. I don’t know if many of our listeners understand how many tonnes of fertilizer we can put on a barge. Kind of give us a comparison there, how much a barge load is versus a truckload?
Speaker 3 (07:43):
So a typical dry barge is about 1500 tonne increments and you can move several barges at one time. That would be for dry products, it’s 1500 tonnes versus a rail car for dry products is anywhere from a 100 to 110 tonnes and by truck you’re looking at about 25 tonnes on average.
Mike Howell (08:04):
So really no comparison moving it by water versus moving it overground. Just tremendous amounts of product we can move over the water. The problem here is we have to have water in the river to be able to float the barges and move them up and down the river. And here a couple of weeks ago I was hearing talk about the port at Memphis may actually have closed down for a period of time because of low water. What can you tell us about the river stages and some of these ports that may potentially have to close down?
Speaker 3 (08:29):
Currently Memphis is at negative 5.86 feet, that was as of today. And we are projecting by the middle of July for that to maybe even drop a little bit. When you look at that, the low water stage of Memphis is -5. We have been having difficulties unloading for a couple weeks now, being at that low water stage, continue to wait for the rains and that will definitely come, but in the meantime, we’ve really got to get significant rains on the crops that we see out there. If we have good rainfall in the month of July, we’re going to see these crops. They’re going to be fully ready to take on pretty much all the rain that we can give them here in the month of July to replenish the soil moisture levels that we’ve seen drop here as of late. What we really are concerned about would be what that looks like as we move into fall and as we get down to harvest and we’re talking about getting these crops out of the ground and moving them towards the ports for export and things like that.
(09:35)
We’ve got to make a good crop. We got to get timely rains to make that good crop, but we also have to have supplemental water to get these river levels back up and we can go from a low water situation to a high water situation overnight depending on how it floods into the tributaries and things of that nature. So we’ve really got to make sure that we’re getting timely rains to keep these crops great in good condition and we also need to make sure that the river gets the water it needs so we don’t have any situations of loading or unloading. When it comes to grain, going to storage and taking your grain to the elevator, we can get full pretty quick and barges will be hard to get if the river levels stay where they’re at today.
Mike Howell (10:20):
Cody, you’re talking about the low water levels and I think it’s important to point out if you’re looking at Memphis and the river stay there at Memphis and you watch the weather and Memphis may get a two inch rain come through today, that’s really not going to affect the river right there at Memphis. That water’s all going to flow in and move south. It may cause an increase a little further south than that, but to increase the river stage at Memphis, we’ve got to get a big rain up in the Midwest and that’s just not happening right now. If you look at the drought monitor, that’s probably the worst hit area right now.
Speaker 3 (10:49):
No doubt and like I mentioned, these crops are looking for some rain, so they’re going to locally evaporate pretty much anything we get. That’s two to three inches is going to be taken right into the replenishing of the soil moisture levels.
Mike Howell (11:01):
We’re going to have to see a change in this weather pattern and for our listeners that listen to us pretty regular, we have Eric Snodgrass come on and talk about our weather forecast and it’s probably about time that we try to get Eric back on again and see if we can get some relief to this drought.
Speaker 3 (11:15):
I talked to Eric yesterday and he’s got a couple of different ideas of how it’ll work. Obviously we need to have timely rains now and it’ll be interesting to see as we look at the forecast. Over the next month, the relief may come to the crops, but maybe not to the river, but I’d think it would be timely to have him back on because he’ll definitely let you know.
Mike Howell (11:37):
Cody, with these water levels where they are now, it’s really early in the year, typically the end of the summer, August, September timeframe, we deal with some low water issues and we’re used to that, but I don’t know that I’ve ever seen ports start having to close down in June and looking at low water levels this early in the year.
Speaker 3 (11:55):
It’s few and far between that it’s been this early in the year that we’ve seen low water issues. Last year around October is when we saw low water situations start on the lower and we made national headlines. We had barges stacked up, couldn’t get past certain areas. Barges were hitting sandbars. They had to take tugboats and move them around to get them even off of sand barges. They had to dredge the river in multiple locations to get product on and off barges. But that was more of a typical timeframe to see that October to December as opposed to here in June. Typically they don’t have those problems.
Mike Howell (12:34):
Cody, one thing that we constantly talk about this time of year is retailers getting ready for summer fill and refilling their fertilizer warehouses after the spring. How is this low river going to affect fertilizer fill this summer?
Speaker 3 (12:47):
I think it will have some logistical challenges. I would advise folks to go talk to their local fertilizer dealers about their fall needs to ensure that they’re prepared if this continues. There are multiple outlets to get product from one point to another, whether it be train or barge or truck. But this is a significant impact that we’re monitoring close. But my suggestion would be go talk to your local guys there and let them know what you need. That way they can get out in front of it and make sure that it’s there when you’re ready for it.
Mike Howell (13:18):
Cody, I understand nobody really wants to make a move on fertilizer right now, hoping that the price is going to keep coming down, but sometimes we have to look at the supply side and logistics and make sure we’re able to get it at all. Want to remind everybody not to wait too late on some of these commodities.
(13:33)
Cody, you also mentioned that grain moves down the river as well, and if this river is low now and assuming it’s getting lower every day, how’s that going to affect harvest time? Is there going to be enough storage to handle the crop this year or what can growers plan ahead and get ready for a low river?
Speaker 3 (13:50):
I would think that the growers that have some onsite storage are probably in the best position. Those that rely on getting to the elevators right off the combine could run into some storage issues if they can’t move barges up and down the river. But we typically somehow find a way to make sure everybody’s getting their grain to the port and exported, but there may be some constraints and some delays in getting some storage if we fill up here.
Mike Howell (14:14):
Okay, Cody. Well, we sure appreciate you taking the time out of your schedule to visit with us today and help us learn more about the Mississippi River and what all the river is used for. Do you have any closing comments that you want to leave our listeners with?
Speaker 3 (14:27):
I’ll say hopefully everybody wraps up a good planting season here and enjoys their summer and make sure that these crops get the moisture that they need to continue to produce good yields and then we get a good crop off and start this all over again.
Mike Howell (14:41):
Cody, we sure appreciate you being with us today. And listeners, if you’ve been tuning in for very long, you know that now is the time where we start talking about our famous person in agriculture.
(14:53)
Today we talked about the Mississippi River and all the barges moving up and down that river, and I would say that just about every one of those tugs pushing those barges is diesel powered. So today I thought we would spend a few minutes and talk about Mr. Rudolph diesel. Mr. Diesel was a German inventor and a mechanical engineer who was born in France. He’s famous for having invented the diesel engine. The diesel engine as well as diesel fuel were both named after him. When he was 14 years old, he declared that he wanted to be an engineer, and by the time he was 16, he had earned a scholarship at the Bavarian Polytechnic of Munich. He did not graduate with his class, however, because he contracted typhoid and was unable to graduate at that time.
(15:37)
Now, during his time at Polytech, one of his professors was Carl von Linde. He was an early inventor of modern refrigeration. And after graduating with honors Diesel worked with Linde on the construction of modern refrigeration and ice plants. Since he started attending the lectures of von Linde, Diesel worked on designing an internal combustion engine that could approach the maximum theoretical thermal efficiency of the Carnot Cycle. In 1892, after working on his idea for several years, he considered his theory to be completed and was given a German patent. In 1893, however, he found that he had some flaws in his theory and had to make some changes and filed for another patent. In the summer of 1893, diesel was awarded another patent, and that’s the patent that the diesel engine was constructed under. The diesel engine was meant to work on coal dust or vegetable oil and was intended to be more economically friendly and more power efficient than other engines of the time.
(16:40)
One of Mr. Diesel’s quotes was that the use of vegetable oils for engine fuels may seem insignificant today, but such oils may become over the course of time as important as petroleum and coal tar products of the present time. After diesel’s death, crude oil became more widely available and the engine was adapted to use just petrol as its source of fuel. However, in recent years with concerns about the environment, that’s beginning to shift back and you can see more and more diesel engines running on cleaner fuels and biodiesel.
(17:13)
A final interesting fact about Mr. Diesel, on the evening of September 29th, 1913, he boarded the Great Eastern Railway steamer, the SS Dresden, and he was on his way to a meeting of the consolidated diesel manufacturing company in London. He had dinner aboard the ship and then retired to his cabin about 10:00 PM and he left word to be called the next morning at 6:15. He was never seen alive again. The next morning they found his cabin empty. His bed had not been slept in, his night shirt was still neatly laid out, and his watch had been placed close to the bed so that it could be seen. They later found his hat and his overcoat neatly folded underneath the afterdeck railing.
(18:00)
Mr. Diesel contributed quite a lot to agriculture with his diesel engine. Most tractors were powered by diesel engines. A lot of our trucks and tugs that run up and down the rivers to moving our commodities from place to place. All owe Mr. Diesel a big debt of gratitude.
(18:16)
Listeners, we really appreciate you tuning in again this week. For more information on this or any other topics that we cover here, you can visit our website, that’s nutrien-eKonomics.com, and we’d also like to encourage you to leave us some reviews there. Let us know if you’re enjoying the program and things that we could do to improve on your listening experience. Until next time, this has been Mike Howell with the Dirt.
