WEBVTT - A Midwest Drought Is Creating a Supply Chain Crisis on the Mississippi River 0:00:10.560 --> 0:00:14.720 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:14.800 --> 0:00:18.400 I'm Joe Wisn't Thal and I'm Tracy Allow. Tracy. You know, 0:00:18.840 --> 0:00:22.759 we've covered so many different aspects of supply chains and 0:00:22.840 --> 0:00:24.479 logistics over the last couple of years. You know, I 0:00:24.480 --> 0:00:27.240 think our first like sort of like supply chain episode 0:00:27.320 --> 0:00:32.760 was late when we first started noticing that the cost 0:00:32.800 --> 0:00:34.680 of shipping goods from China to the U S. It 0:00:34.760 --> 0:00:37.960 was like, it seems a little high. Yeah, you're right. So, 0:00:38.400 --> 0:00:41.360 you know, the early days of the pandemic, there was 0:00:41.400 --> 0:00:45.879 all the shipping related chaos, and I guess lucky or unlucky, 0:00:46.000 --> 0:00:47.840 I don't know. Um I had a sort of front 0:00:47.880 --> 0:00:50.360 row seat to observe some of it in Asia because 0:00:50.400 --> 0:00:52.640 it became very very apparent that it was becoming not 0:00:52.720 --> 0:00:56.320 only more difficult but also more expensive to ship goods 0:00:56.760 --> 0:00:59.240 from China to the US. Right, so it's like, huh, 0:00:59.280 --> 0:01:01.080 what is going on with that? And then we looked 0:01:01.080 --> 0:01:03.640 at international shipping and we started pulling on the string 0:01:03.800 --> 0:01:05.920 that got us to ports, and that got us to 0:01:06.000 --> 0:01:08.800 truck that got us to everything else. We pulled the 0:01:08.880 --> 0:01:11.440 thread into what you always think, there's going to be 0:01:11.440 --> 0:01:14.280 nothing left and then like you find something around the corner, right, 0:01:14.720 --> 0:01:17.360 But there's one big area that we've talked about doing 0:01:17.360 --> 0:01:20.080 for a long time that we haven't talked about. Oh yes, yeah, 0:01:20.360 --> 0:01:24.040 well this is my point. There's always something new barges, right. 0:01:24.360 --> 0:01:28.479 So we you know, the inland waterways, rivers, the Mississippi 0:01:28.600 --> 0:01:31.440 River in particular, there's everybody is something we wanted to 0:01:31.440 --> 0:01:35.360 talk about and talk about. It's significance in the U. S. Economy, 0:01:35.440 --> 0:01:38.440 and you know how important is inland infrastructure, but we 0:01:38.520 --> 0:01:41.600 just haven't gotten around to it. However, now we actually 0:01:41.640 --> 0:01:43.280 have a very good reason to talk about it. It's 0:01:43.319 --> 0:01:46.800 the barge episode finally here. But we do have the 0:01:46.840 --> 0:01:50.000 perfect peg, which is that at the moment there is 0:01:50.040 --> 0:01:53.080 a massive drought in the Midwest and it is affecting 0:01:53.240 --> 0:01:56.160 water levels on the Mississippi, which is of course the 0:01:56.240 --> 0:02:00.840 most important inland waterway in the country. And I think 0:02:00.880 --> 0:02:03.040 you know, I was reading a Bloomberg article it said 0:02:03.520 --> 0:02:08.360 waters in Memphis fell to negative ten points seven nine 0:02:08.480 --> 0:02:12.720 ft recently, which is slightly lower than the previous low 0:02:13.400 --> 0:02:17.119 of ten points seven zero from nineteen Did you say 0:02:17.200 --> 0:02:21.360 negative there was negative water? Yeah, I'm not entirely sure 0:02:21.440 --> 0:02:24.799 how that works. It sounds bad, it sounds bad, it's bad. Yeah, Right, 0:02:24.880 --> 0:02:27.760 So there has been a very severe drought in the Midwest, 0:02:27.960 --> 0:02:30.240 and it seems like a double whammy, right because on 0:02:30.280 --> 0:02:33.320 the one hand, like if you depend on the Mississippi 0:02:33.440 --> 0:02:36.359 River or any of the inland waterways and the river's 0:02:36.400 --> 0:02:38.960 tributaries to move your grains or to move your goods, 0:02:39.040 --> 0:02:41.440 that's a problem we're going to get to why. But 0:02:41.560 --> 0:02:45.520 also it's just bad because it's bad for growing, yeah, exactly. 0:02:45.560 --> 0:02:48.679 So if you're a farmer, you probably struggled to actually 0:02:48.720 --> 0:02:52.000 grow your harvest this year, and now you're struggling to 0:02:52.440 --> 0:02:55.040 get it out to the market where you're actually selling 0:02:55.040 --> 0:02:57.880 it into. So, yeah, a double whammy. And also, you know, 0:02:58.040 --> 0:03:00.440 we're going to be speaking a lot about grains on 0:03:00.480 --> 0:03:03.880 this episode, but there are all types of goods and 0:03:03.960 --> 0:03:07.519 resources and commodities that actually move up and down these 0:03:07.560 --> 0:03:10.680 pathways on the water. Right. So we're gonna do this 0:03:10.760 --> 0:03:13.960 episode a little bit differently. We're gonna break it up 0:03:14.080 --> 0:03:18.000 into two different sections. But first let's start with someone 0:03:18.040 --> 0:03:20.040 who works in the grain business and talk about how 0:03:20.040 --> 0:03:22.440 it's affecting them. Let's do it. We have the perfect 0:03:22.480 --> 0:03:25.200 guest to talk about grains and the effects of the 0:03:25.680 --> 0:03:28.280 drought on the grain industry and on shipping grains. We're 0:03:28.280 --> 0:03:30.280 going to be speaking with Ben Shull. He is the 0:03:30.320 --> 0:03:34.600 president of Louis b Oster Burr and Associates, which works 0:03:34.639 --> 0:03:39.760 with specialty grain companies organic grains, non gmo grains, etcetera, 0:03:40.040 --> 0:03:43.800 to move their goods overseas or to sell their goods 0:03:44.000 --> 0:03:47.400 much of its destination overseas, and of course his clients 0:03:47.440 --> 0:03:51.320 are highly dependent on the functioning of the Mississippi River 0:03:51.400 --> 0:03:54.240 and the barges there on. So Ben, thank you so 0:03:54.320 --> 0:03:56.640 much for joining us. Ben, what do you just sort 0:03:56.640 --> 0:03:58.440 of tell us, like, what do you do? What's your 0:03:58.560 --> 0:04:02.000 role within the grain ecosystem. I am the president of 0:04:02.000 --> 0:04:06.800 a specially grain company called Ostburne Associates. We buy especially 0:04:06.880 --> 0:04:10.280 grains non GMOs and the like in export um to 0:04:10.360 --> 0:04:14.080 Japan throughout the river system in the United States. Also 0:04:14.120 --> 0:04:16.200 come from a family farm, so I have a little 0:04:16.200 --> 0:04:19.159 bit of a farm background, and we are involved in 0:04:19.200 --> 0:04:24.799 production agriculture in central Illinois, in the production of specialty grains. 0:04:24.839 --> 0:04:26.800 So as a jumping off point, you know, we talked 0:04:26.839 --> 0:04:29.760 a little bit about this in the intro. How bad 0:04:30.000 --> 0:04:32.320 things actually are on the Mississippi at the moment. But 0:04:32.360 --> 0:04:36.039 give us your sense of how things are at the 0:04:36.080 --> 0:04:39.200 moment and how they stack up against history. Well, this 0:04:39.279 --> 0:04:41.599 is certainly I've been doing this for about sixteen years, 0:04:41.640 --> 0:04:43.880 certainly the worst I've ever seen. As I talked to 0:04:43.920 --> 0:04:46.120 some of the other veterans and people with a little 0:04:46.120 --> 0:04:49.800 more experience shipping on the river, it seems to be 0:04:50.120 --> 0:04:53.120 about as bad as we've had since the nineteen eighties. 0:04:53.120 --> 0:04:56.599 A lot of people are siting, uh, matching some of 0:04:56.600 --> 0:04:59.599 those records. Two thousand twelve was a dry year. We 0:04:59.680 --> 0:05:02.320 had some low, low water we had to contend with. 0:05:02.440 --> 0:05:05.400 But this is a lot really new compared to what 0:05:05.440 --> 0:05:08.120 we've been dealing with in the recent history, which is 0:05:08.200 --> 0:05:12.080 high water. That's interesting. So it's a double whammy. So 0:05:12.200 --> 0:05:16.040 if you're producing grains in the Midwest, you're contending with 0:05:16.480 --> 0:05:19.599 a imagine drought is extremely bad just for the growing 0:05:19.640 --> 0:05:23.880 of grains, and then the actual logistics. Yeah, so we're 0:05:23.960 --> 0:05:26.479 kind of beholden to the weather all year round, especially 0:05:26.560 --> 0:05:30.080 if your main market is the export market, which for 0:05:30.240 --> 0:05:33.920 most would be on the river and river tributary terminals. 0:05:34.240 --> 0:05:37.039 We are usually pretty consistent on the river with river 0:05:37.120 --> 0:05:39.160 levels but you know, we usually have to deal with 0:05:39.160 --> 0:05:42.160 low water in the fall, high water in the spring, 0:05:42.800 --> 0:05:44.760 and it's just something that we usually have to keep 0:05:44.760 --> 0:05:47.719 an eye on. Very rarely does it get parabolic in 0:05:47.760 --> 0:05:51.400 a situation like we're in today. Can you talk to 0:05:51.480 --> 0:05:53.839 us a little bit about the life cycle of a 0:05:53.920 --> 0:05:57.240 harvest or I guess the supply chain of you know, 0:05:57.600 --> 0:06:00.839 particular grain is grown in a few on a farm 0:06:01.000 --> 0:06:03.839 and then it goes down the river and it ends 0:06:03.920 --> 0:06:07.520 up in an export market like Japan or elsewhere. Like, 0:06:07.560 --> 0:06:11.600 how does that process normally work and where are these 0:06:11.640 --> 0:06:15.839 sticking points now? Typically farmers will want to get in 0:06:15.839 --> 0:06:18.359 the field and plant their crops in April May. If 0:06:18.480 --> 0:06:21.440 those are the ideal times to get in you would 0:06:21.440 --> 0:06:25.240 typically begin harvest in that scenario September, which would last 0:06:25.440 --> 0:06:29.520 through October and into the beginning of November. Now, for export, 0:06:30.040 --> 0:06:32.800 soybeans are usually the first thing to leave the United States, 0:06:32.800 --> 0:06:35.280 and a typical harvest, which is where we're at right now, 0:06:36.120 --> 0:06:40.839 soybeans move about of exports will happen between September and February. 0:06:41.600 --> 0:06:46.359 A half to might move by barge. That's where we 0:06:46.400 --> 0:06:49.359 are today. Corn usually follows maybe at the turn of 0:06:49.360 --> 0:06:52.719 the calendar year. That's when our big export program for 0:06:52.839 --> 0:06:56.240 corn will happen. So right now it's pretty much all 0:06:56.360 --> 0:06:58.640 hands on deck in terms of the shipping to get 0:06:58.640 --> 0:07:02.160 the soybeans out. Are big buyers, obviously China. We want 0:07:02.200 --> 0:07:05.640 to get those out and in overseas as fast as 0:07:05.720 --> 0:07:08.680 possible because we will have a South American crop come 0:07:08.680 --> 0:07:12.720 online somewhere January and February where we will no longer 0:07:12.760 --> 0:07:15.920 be as competitive to the market. When you ship something, 0:07:16.200 --> 0:07:18.920 depending on where you ship from. I will use St. 0:07:18.960 --> 0:07:22.240 Louis because it is the biggest origin port out of 0:07:22.240 --> 0:07:25.680 the Center Gulf. That might take in a normal scenario 0:07:26.240 --> 0:07:30.160 ten days to get to New Orleans, maybe another thirty 0:07:30.240 --> 0:07:32.400 to get to a place like Japan after it's loaded 0:07:32.400 --> 0:07:35.640 on a boat. Right now, what we're seeing is at 0:07:35.720 --> 0:07:38.200 least double the amount of time to get from a St. 0:07:38.200 --> 0:07:41.720 Louis to a New Orleans, but that varies day by day. 0:07:41.760 --> 0:07:44.640 There are land mines and pitfalls all over the place 0:07:44.640 --> 0:07:47.680 on the river. Right now, it's legitimately a day to 0:07:47.760 --> 0:07:51.360 day situation. So is the issue for farmers that the 0:07:51.480 --> 0:07:54.720 longer it takes to get the crops out and exported 0:07:54.760 --> 0:07:57.280 to market, the less competitive they are, or is the 0:07:57.360 --> 0:08:00.520 issue that if you wait too long the crops them 0:08:00.680 --> 0:08:05.440 start to spoil. We're both so this is where it's interesting. 0:08:05.600 --> 0:08:08.960 While the dry weather is actually a hindrance to shipping 0:08:09.000 --> 0:08:11.920 and moving the crop on the river, it is hugely 0:08:11.960 --> 0:08:14.640 beneficial for the farmer getting their crops out of the field. 0:08:15.040 --> 0:08:18.400 We are making very good pace on harvest because there's 0:08:18.440 --> 0:08:22.080 been no rain to stop the harvest progress. So they're 0:08:22.120 --> 0:08:25.400 coming off an extremely extremely fast paced in the West, 0:08:25.720 --> 0:08:28.200 even faster because they don't have as much of a 0:08:28.240 --> 0:08:30.559 crop because of the dryness and some of the drought 0:08:30.600 --> 0:08:34.920 issues out there. Where the bottleneck occurs is at the 0:08:34.960 --> 0:08:38.240 shipping point. Most farmers have built ample storage over the 0:08:38.320 --> 0:08:41.600 last few years, as in the last ten plenty of 0:08:41.640 --> 0:08:44.600 storage to store on farm, but the bottleneck becomes at 0:08:44.640 --> 0:08:48.959 the origin port. So now we cannot move as many 0:08:49.160 --> 0:08:54.679 barges because of reduced toes and barge is getting stuck 0:08:54.720 --> 0:08:57.360 all along the river segment, and that creates a backup 0:08:57.440 --> 0:09:01.439 at origin where it hurts the producer. Is a basis level, 0:09:01.559 --> 0:09:05.080 or the difference in cash prices versus the Chicago Board 0:09:05.080 --> 0:09:08.000 of Trade continue to drop off. So whereas a farmer 0:09:08.080 --> 0:09:11.840 might see something relatively equal to what you see quoted 0:09:11.880 --> 0:09:14.360 on the board. They might be getting a dollar less 0:09:14.440 --> 0:09:34.800 because the transportation costs and risks are so high. Can 0:09:34.840 --> 0:09:37.720 you talk a little bit more. You mentioned the logistical 0:09:38.000 --> 0:09:41.720 land mines. Right now, what actually happens in low water 0:09:42.000 --> 0:09:45.480 and how does it slow down the shipment of these 0:09:45.480 --> 0:09:50.160 goods or the ground. So low water causes two problems 0:09:50.280 --> 0:09:53.920 channel depth and channel width of which you can take 0:09:54.000 --> 0:09:56.960 barges down. How this is being slowed down on the 0:09:57.040 --> 0:09:59.760 river currently you have a tugboat that will push a 0:09:59.800 --> 0:10:03.000 pa pack of barges from a St. Louis to New Orleans, 0:10:03.040 --> 0:10:06.360 and they might typically push forty barges. Well, right now 0:10:06.480 --> 0:10:09.360 the max is twenty five on the river. The amount 0:10:09.400 --> 0:10:11.760 of grain that we can actually put in a barge 0:10:12.280 --> 0:10:15.880 is being reduced. So right now everybody is a nine 0:10:15.880 --> 0:10:18.400 ft draft. We can only sink a barge nine ft 0:10:18.440 --> 0:10:24.360 down and ship it. That's that constitutes somewhere between less 0:10:24.360 --> 0:10:28.760 than normal. Uh. Some of the other issues longer turns 0:10:29.080 --> 0:10:32.080 where a lot of people are running daylight only hours 0:10:32.200 --> 0:10:35.160 right now, which means the primarily the reason for that 0:10:35.240 --> 0:10:37.920 is so they can dredge or dig out the bottom 0:10:37.920 --> 0:10:41.440 of the river at night, so it just continues to 0:10:41.480 --> 0:10:43.720 make longer turns down to the gulf and back. We 0:10:43.800 --> 0:10:46.640 have stoppages which are day to day. It could be 0:10:46.840 --> 0:10:51.559 five six blockages on any given river segment and uh, 0:10:51.640 --> 0:10:53.680 all of that really you put all that together and 0:10:53.679 --> 0:10:57.120 what that means for shippers uh, and grain dealers and 0:10:57.280 --> 0:11:00.840 and people that move product on the rivers high shipping costs. 0:11:02.120 --> 0:11:05.560 So what are farmers actually doing to offset some of 0:11:05.600 --> 0:11:09.319 these issues? Like have they potentially built up I mean, 0:11:09.360 --> 0:11:11.800 I guess if you were prepping ahead of time for 0:11:11.920 --> 0:11:14.400 climate change in major drought, maybe you would build up 0:11:15.040 --> 0:11:18.600 your storage capacity for instance, so that you could store 0:11:18.679 --> 0:11:20.400 a lot of your grains if you can't move them. 0:11:20.400 --> 0:11:22.960 Are there things that farmers can do to offset some 0:11:23.040 --> 0:11:27.160 of these challenges? Well, farmers, you can always price ahead. 0:11:27.200 --> 0:11:31.360 You can price before the issue gets here. This issue 0:11:31.400 --> 0:11:35.120 really started well early in the year, but it really 0:11:35.120 --> 0:11:38.520 came to a head in September and October, So you're 0:11:39.240 --> 0:11:42.040 their issue. There are ways to mitigate that risk by 0:11:42.040 --> 0:11:45.440 pricing ahead, taking some of that risk off your off 0:11:45.480 --> 0:11:48.840 your table. You also have a huge build up in 0:11:48.920 --> 0:11:52.080 storage on farm so a lot of these producers can 0:11:52.120 --> 0:11:56.280 tuck away the grain until there's more beneficial river system, 0:11:56.760 --> 0:11:59.320 a better chance and a better opportunity to sell better 0:11:59.400 --> 0:12:01.960 values once we get some of these issues sorted out. 0:12:02.120 --> 0:12:06.400 Do farmers have any alternative ways of shipping goods? Is 0:12:06.400 --> 0:12:09.760 there any rail or trucking nearby or do any of 0:12:09.760 --> 0:12:12.560 them have that option when they can't get a spot 0:12:12.600 --> 0:12:16.640 on a barge. Absolutely, farmers by and large have their 0:12:16.640 --> 0:12:19.680 own trucks. They can move their own product. Uh, there 0:12:19.679 --> 0:12:25.280 are railhouses. Rail even before these river issues was pretty taxed, 0:12:25.320 --> 0:12:29.160 and they've had their own issues and performance and otherwise 0:12:29.200 --> 0:12:32.480 in certain markets in certain parts of the US. So 0:12:33.160 --> 0:12:35.080 I don't know that rail is in a position to 0:12:35.160 --> 0:12:38.760 really help out the river market. And we already have 0:12:38.920 --> 0:12:42.800 a huge demand pull by rail to move corn and 0:12:42.840 --> 0:12:45.319 beans and other products to the West where we had 0:12:45.320 --> 0:12:48.920 a substantial drought, into the Southeast where there's good demand 0:12:49.000 --> 0:12:53.120 for for rail in product, and it really isn't economically 0:12:53.160 --> 0:12:57.440 feasible to truck your grain to the New Orleans, which 0:12:57.440 --> 0:12:59.400 at the end of the day, for export is where 0:12:59.440 --> 0:13:02.080 all this what it needs to be. It's really a 0:13:02.120 --> 0:13:05.400 sit in wait. Look for other markets like a railhouse. 0:13:05.559 --> 0:13:09.840 Look for other markets like ethanol and feeders, and just 0:13:10.320 --> 0:13:13.280 if you need to move grain, find something else other 0:13:13.320 --> 0:13:15.719 than the river at this point to find a home 0:13:15.800 --> 0:13:18.200 because the values will be much better to the producer. 0:13:18.800 --> 0:13:20.760 So this is one thing I was wondering. Actually, you know, 0:13:20.800 --> 0:13:24.120 we're talking about moving things like soybeans down the river 0:13:24.240 --> 0:13:27.320 so that they can get exported to markets like China 0:13:27.440 --> 0:13:32.080 and elsewhere. How much of the grains that are moving 0:13:32.400 --> 0:13:35.560 through the Mississippi, How how much of that goes to 0:13:35.640 --> 0:13:39.680 the US versus the rest of the world. So if 0:13:39.720 --> 0:13:43.400 you're talking about it, let's just take corn for instance, 0:13:43.440 --> 0:13:49.000 because I deal in corn mostly but probably oh my gosh, 0:13:49.040 --> 0:13:51.600 that's all I hear in my house. My I mean, 0:13:51.880 --> 0:13:54.600 my kids have never cared one iota what I do. 0:13:54.640 --> 0:13:57.440 But since that came out, they've done so much for 0:13:57.480 --> 0:14:00.439 the corn industry. Let me tell you, uh, I would say, 0:14:02.000 --> 0:14:04.559 of like the corn in the United States goes for export, 0:14:04.880 --> 0:14:08.160 the majority of that gets used in house for between ethan, 0:14:08.200 --> 0:14:14.040 all uh, feed of animals and just other domestic food products. 0:14:14.960 --> 0:14:18.440 Beans are much more heavy export, probably closer to half 0:14:18.520 --> 0:14:20.720 or something like that. So that's why there's such a 0:14:20.720 --> 0:14:22.320 big on It's not only is it our time to 0:14:22.440 --> 0:14:25.080 ship beans and to get them out. It's our window, 0:14:25.240 --> 0:14:27.720 the place where we're the most competitive, where we are 0:14:27.760 --> 0:14:31.600 typically cheaper than Brazil and our competition in Argentina. That's 0:14:31.600 --> 0:14:33.480 why it's such a high priority to get those out 0:14:33.560 --> 0:14:36.600 now because they will be coming online with bigger crops. 0:14:36.720 --> 0:14:40.960 Is are especially Brazil continues to increase acreage year over year. 0:14:41.520 --> 0:14:43.760 They are becoming more of a force and a bigger 0:14:43.760 --> 0:14:47.480 player in the grain and especially soybean UH competition force 0:14:47.520 --> 0:14:50.480 in the world. Do farmers have to make a decision 0:14:51.200 --> 0:14:54.360 about Wait, this might be like a new normal that 0:14:54.520 --> 0:14:57.200 if you know, because droughts can last a long time. Obviously, 0:14:57.240 --> 0:14:59.680 the drought in the Southwest has happened for several years 0:14:59.680 --> 0:15:02.640 and there like crisis of water levels there. Do farmers 0:15:02.680 --> 0:15:04.680 have to make a bet so to speak, on whether 0:15:04.720 --> 0:15:08.520 the drought is going to persist and constrained waterways is 0:15:08.560 --> 0:15:10.240 a new normal and there has to be a different 0:15:10.240 --> 0:15:14.240 way of exporting their goods. I don't know that they 0:15:14.280 --> 0:15:18.720 need to sit there and worry about drought into the future. 0:15:18.760 --> 0:15:21.840 And as it relates to the river system, they could 0:15:21.920 --> 0:15:27.360 certainly look at diversifying some of their in use. Buyers 0:15:27.680 --> 0:15:30.160 maybe do a little eth and all. Do some river 0:15:30.400 --> 0:15:35.840 feeder maybe diversify it. But my my experience in weather 0:15:36.360 --> 0:15:39.880 and river conditions and rain is much like the economy, 0:15:39.920 --> 0:15:42.720 just like a drought in a recession. The best part 0:15:42.760 --> 0:15:45.920 about them is they will end at some point. What 0:15:46.000 --> 0:15:49.240 would be most helpful for farmers at the moment? Would 0:15:49.240 --> 0:15:52.320 it be like more coordination on the river or better 0:15:52.440 --> 0:15:56.760 dredging capacity? What would people like to see here? There's 0:15:56.880 --> 0:15:59.440 no magic bullet right now for the river. The thing 0:15:59.480 --> 0:16:02.520 that we need is heavy rain, a flash flood type 0:16:02.520 --> 0:16:07.440 event north of St. Louis. The biggest problem with this 0:16:07.480 --> 0:16:10.000 event that we have right now isn't so much the 0:16:10.040 --> 0:16:12.640 low water, it's where the low water is located. The 0:16:12.640 --> 0:16:16.680 biggest problems are Memphis South. So if you had a 0:16:16.680 --> 0:16:19.200 flooding on the Illinois, some of the bigger companies and 0:16:19.280 --> 0:16:22.080 a d M or a Cargill could shift their operations 0:16:22.120 --> 0:16:25.880 to really push product out of the lower Mississippi or 0:16:25.880 --> 0:16:30.360 the Ohio River and kind of ore that opportunity. The 0:16:30.440 --> 0:16:33.600 problem we have right now is where this biggest issue 0:16:33.600 --> 0:16:37.800 is located, and that's Memphis South, which affects every signal 0:16:37.960 --> 0:16:41.960 river segment. So there is no magic bullet what we need, 0:16:42.040 --> 0:16:44.600 or heavy rains, a flash flood type event, like I said, 0:16:44.640 --> 0:16:49.800 that would just run off into the rivers, the tributaries, 0:16:49.840 --> 0:16:52.480 in the in the in the main rivers to provide 0:16:52.560 --> 0:16:55.960 us a little relief. The other would be a kind 0:16:55.960 --> 0:16:58.800 of just soaking rain and start knocking back this drought 0:16:58.920 --> 0:17:02.880 where we have soil moisture and every rain adds to it. 0:17:02.960 --> 0:17:05.600 That is obviously a longer process. It will be slower 0:17:05.640 --> 0:17:10.119 to bring the river levels back up, but absent of 0:17:10.200 --> 0:17:12.880 widespread rain, dredging is just a kind of a band 0:17:12.880 --> 0:17:14.919 aid on a bullet hole at this point. It's just 0:17:15.040 --> 0:17:18.439 keeping us going. Just the one last question for me, 0:17:18.840 --> 0:17:22.400 more out of curiosity. But you mentioned that normally the 0:17:22.480 --> 0:17:26.239 problem that you face is actually too high water. Can 0:17:26.280 --> 0:17:30.480 you talk about some of the challenges that that poses. Yeah, 0:17:30.600 --> 0:17:34.240 so high water. The one experience that I had that 0:17:34.320 --> 0:17:35.879 was probably the worst would have been the spring of 0:17:35.960 --> 0:17:41.000 nineteen where it just continually rained, and more than rain, 0:17:41.200 --> 0:17:44.320 it didn't it didn't ever get warm in the spring, 0:17:44.480 --> 0:17:46.200 and there wasn't a whole lot of sun to dry 0:17:46.280 --> 0:17:51.159 up the soils, and we were pretty much non operational 0:17:51.240 --> 0:17:56.760 on the river, especially the Illinois River, until from spring 0:17:56.800 --> 0:18:00.440 to June where there was a complete backlog at origin, 0:18:00.920 --> 0:18:04.000 a lot like what we have here, but just nothing 0:18:04.119 --> 0:18:07.320 was moving. We're actually trying to move in this situation. 0:18:07.359 --> 0:18:09.920 With high water there, you can get to a point 0:18:09.960 --> 0:18:13.639 where you can't load anything physically because the water is 0:18:13.640 --> 0:18:16.800 so high that barges sit above spouts and product that 0:18:16.800 --> 0:18:19.280 you're trying to load on the barge. Neither or fun, 0:18:19.760 --> 0:18:22.000 but high water comes with its own set of challenges 0:18:22.400 --> 0:18:25.480 just like low water, and high water has definitely been 0:18:25.840 --> 0:18:31.600 the more prominent of the two in recent years. Ben, 0:18:31.680 --> 0:18:34.439 Thank you so much for joining us. This was extremely helpful. 0:18:34.560 --> 0:18:37.560 So appreciate you coming out on ad lots. Oh, it's 0:18:37.560 --> 0:18:40.680 an honor and it's appreciate you guys having me. Yeah, absolutely, yeah, 0:18:40.680 --> 0:18:44.240 thanks man. That was really good. Well, Joe, that was 0:18:44.320 --> 0:18:47.360 fascinating and there is a lot to dissect there. But 0:18:47.560 --> 0:18:50.400 just before we do, we're gonna bring in two other 0:18:50.480 --> 0:18:53.560 guests to people who have actually been on the show before, 0:18:54.160 --> 0:18:57.199 kind of talking about barges, but this time we're really 0:18:57.240 --> 0:18:59.520 going to get into it. We're gonna be speaking with 0:18:59.640 --> 0:19:04.399 Mercy Group CEO Anton Posner and President Margot Brock In 0:19:04.480 --> 0:19:24.280 just a few minutes after the break. So we're back 0:19:24.320 --> 0:19:27.560 and we are continuing our discussion of the Great Mississippi 0:19:27.600 --> 0:19:29.919 Drought and what it actually means for the economy, for 0:19:30.040 --> 0:19:32.719 transport and logistics. We are going to be speaking with 0:19:32.840 --> 0:19:37.159 Mercury Group CEO Anton Posner and President Margot Brock. Anton 0:19:37.200 --> 0:19:39.440 and Margot, thanks so much for coming back on our thoughts. 0:19:40.640 --> 0:19:43.120 Pleasure to be here, Thanks for having us. Yeah, great 0:19:43.119 --> 0:19:46.520 to be back. So I remember the last time we spoke, 0:19:47.040 --> 0:19:50.159 we did touch on barges briefly, and so Joe and I, 0:19:50.280 --> 0:19:52.159 you know, when we were prepping for this episode, we 0:19:52.200 --> 0:19:56.200 thought who do we need to call to talk about barges, 0:19:56.359 --> 0:19:59.919 and it was, of course Mercury Group. Just to begin with, 0:20:00.119 --> 0:20:03.800 give us a sense of your connection to the barge business. 0:20:04.520 --> 0:20:08.160 The river. River business is a huge part of Mercury 0:20:08.200 --> 0:20:12.960 Group business and has been since our inception. Of course, 0:20:13.080 --> 0:20:17.240 millions of tons move of commodities and cargoes move on 0:20:17.240 --> 0:20:22.199 the river system every every year, northbound, southbound, east and 0:20:22.320 --> 0:20:26.680 west throughout the Mississippi River High river system, so it's 0:20:26.680 --> 0:20:29.960 been a big part of our business, primarily moving import 0:20:30.040 --> 0:20:35.040 commodities via coming in via New Orleans and mobile commodities 0:20:35.080 --> 0:20:38.600 like steel and aluminum and lead and zinc and on 0:20:39.000 --> 0:20:43.600 raw materials for the steel and metals metals industry. UM. 0:20:43.800 --> 0:20:47.720 So it's such a significant part of the North American 0:20:47.840 --> 0:20:53.280 and American transportation UH system and a big huge part 0:20:53.280 --> 0:20:56.760 of the Mercury Rickery Groups business that we manage for 0:20:56.760 --> 0:20:59.119 for our clients. Can you talk about like you know, 0:20:59.160 --> 0:21:02.760 we've talked a lot out about logistics and shipping and 0:21:02.920 --> 0:21:06.439 ports and trucks and dredging on the show several times, 0:21:06.880 --> 0:21:09.800 but just like how significant I do feel as though 0:21:09.880 --> 0:21:14.240 inland waterways specifically do not get that much attention. I 0:21:14.280 --> 0:21:17.280 guess maybe outside when they're in crisis, But how significant 0:21:17.320 --> 0:21:19.960 are they? To what degree do people need to appreciate 0:21:20.000 --> 0:21:25.560 the importance of our inland infrastructure. That's a great question 0:21:25.640 --> 0:21:29.679 because I think it is such an unknown in this 0:21:29.800 --> 0:21:34.800 country for people don't understand how extensive the river system 0:21:34.920 --> 0:21:37.480 is and how much of the US gets fed in 0:21:37.680 --> 0:21:42.040 and out of materials on the river system. And you know, 0:21:42.080 --> 0:21:45.240 Anton and I are East Coast based people, so I 0:21:45.280 --> 0:21:48.200 didn't grow up on the Mississippi. I didn't see barges 0:21:48.680 --> 0:21:51.640 moving on the Mississippi, and I didn't know they existed 0:21:51.680 --> 0:21:55.800 growing up, and even Anton and I, who went to 0:21:56.240 --> 0:22:00.919 merchant Marine merchant Marine school, we are came out as 0:22:01.000 --> 0:22:04.919 licensed third mate. Even in college, we didn't talk about it. 0:22:04.960 --> 0:22:08.480 We talked about ocean freight and and bigger, bigger scale. 0:22:09.080 --> 0:22:13.520 The river system is tremendous, and the amount of commerce 0:22:13.880 --> 0:22:19.160 that runs inbound, it really runs the gamut. There's barges 0:22:19.200 --> 0:22:24.760 that move liquids. There's an incredible, incredible fleet of barges 0:22:24.800 --> 0:22:29.399 that move dry materials. Inland. It can be you know, 0:22:29.480 --> 0:22:34.680 some interestingly enough, we at one point removing organic soybeans 0:22:35.080 --> 0:22:38.919 into Middle America because although we make soybeans here in 0:22:38.920 --> 0:22:41.639 the US, we don't have a great organic crop and 0:22:41.680 --> 0:22:46.320 you have to feed your organic meat organic food. So 0:22:46.520 --> 0:22:50.440 to have organic cows, we need organic feedstock for them. 0:22:50.520 --> 0:22:55.760 We send raw materials into production facilities. So you know, 0:22:55.800 --> 0:22:59.639 when we're looking at what has happened in this market 0:22:59.680 --> 0:23:04.000 that we're all living of reduced availability of so many 0:23:04.080 --> 0:23:07.640 items that we think of that come from China in containers, 0:23:08.320 --> 0:23:11.200 you know, and the chips for our cars and Christmas 0:23:11.240 --> 0:23:13.560 gifts on our shelves. That's one part of the market. 0:23:13.600 --> 0:23:17.000 But there's a lot of raw materials that feed up 0:23:17.040 --> 0:23:21.879 into the US that aren't able to reach these production 0:23:22.040 --> 0:23:25.359 facilities if the river is not working, and that's the 0:23:25.440 --> 0:23:29.520 next great shortage that happens when we can't get materials 0:23:29.600 --> 0:23:34.920 up to the production facilities. And then on the export side, 0:23:35.320 --> 0:23:39.600 we'll have discussed grain already for this podcast. Export grain 0:23:39.680 --> 0:23:42.840 is a huge part of the US is grain market. 0:23:43.280 --> 0:23:48.080 So although we feed plenty of our of ourselves domestically 0:23:48.119 --> 0:23:51.520 with what we produce, it's a really big global market 0:23:51.560 --> 0:23:54.680 for US grain. And right now is the green season. 0:23:54.800 --> 0:23:58.240