Upper Mississippi Grain Transport
Randy Schnepf

Issue

The Upper Mississippi River-Illinois Waterway (UMR-IWW) navigation system provides an important export outlet for the agricultural bounty of the upper Midwestern states of Minnesota, Iowa, Wisconsin, Illinois, and Missouri. The waterway is also an important means for shipping other bulk commodities central to the regional economy. After several decades of strong growth, however, both total and agricultural barge freight on the UMR-IWW has leveled off since the early 1980s. There is disagreement over the cause for this lack of growth in barge demand and the policy response to deal with it.

Commercial navigability on the UMR-IWW is dependent on a system of locks and dams built, maintained, and operated by the U.S. Army Corps of Engineers. The UMR-IWW navigation system extends from Minneapolis, MN, to the mouth of the Ohio River. It contains nearly 1,200 miles of at least 9-foot deep channels, 37 lock and dam locations (with 43 locks), and thousands of channel training structures.

During 1990 to 2002, nearly 74.3 million metric tons (mmt) of freight moved annually on the UMR-IWW. Of this total, agricultural products comprised 54% (40.1 mmt). Corn and soybeans contributed the bulk of average annual agricultural trade -- a combined 34 mmt (or 1.342 billion bushels) -- during this period. However, these figures are little changed from the early 1980s when total freight averaged 71.0 mmt and agricultural freight averaged 40.8 mmt.

Shipping and agricultural interests argue that stagnant UMR-IWW barge traffic is due to delays associated with aging infrastructure and limited lock capacity; that delays are increasingly forcing grain shippers to switch to alternate transportation modes to ensure timely arrival at down-river processing plants or Gulf ports; that the declining efficiency of the UMR-IWW is hurting both U.S. competitiveness in international markets and U.S. farm incomes at home; and that investment is needed to modernize and expand the capacity of the locks.

Other interest groups contend that growth in domestic demand (particularly from livestock and ethanol production), as well as international market conditions have changed substantially since the period of rapid growth in barge demand experienced during the 1960s and 1970s. Changes in the shape and origin of international demand and supply, an increasing number of bilateral and multilateral trade agreements, and trade disputes related to U.S. production and use of biotech crops have resulted in the emergence of new trade routes for agricultural commodities that have drawn exportable supplies of corn and soybeans away from the UMR-IWW system.

Recent trade patterns, coupled with USDA's long-run market outlook, suggest that U.S. corn and soybean exports may increasingly turn to overland trade routes to access growing Asian markets (via the Pacific Northwest), as well as to nearby markets in Mexico and Canada. In addition, expected strong competition from South American producers, particularly in global soybean and product markets, may lead to a refocusing of U.S. exports away from Atlantic-rim markets and towards Canadian, Mexican, and possibly Asian markets where geography offers some competitive advantages. If these expectations are realized, then growth in future barge demand from the agricultural sector may be well below levels anticipated by proponents of large-scale investments in the UMR-IWW.

In 1993, the Corps began a multiyear feasibility study to assess the viability of navigation efficiency improvements for the UMR-IWW system. In April 2004, the Corps announced its preliminary recommendation for integrated investments in navigation and ecosystem restoration. The navigation improvements component of the Corps' recommendation is estimated to cost $2.4 billion. The plan includes building seven new 1,200 ft. locks and possibly five lock extensions, as well as implementing helper boats and moorings while the new locks are designed and constructed. The Corps is expected to release its final recommendations in November 2004.

Role of Congress

Congress is responsible for authorizing Corps projects, often as part of a Water Resources Development Act, which is the typical legislative vehicle for authorizing Corps projects. (See CRS Issue Brief IB10120.) Following authorization, the project would be contingent on Congress remaining involved in the UMR-IWW project through the annual appropriations process for the Energy and Water Development Appropriations Act.

CRS Products

CRS Report RL32470(pdf), Upper Mississippi River - Illinois Waterway Navigation Expansion: An Agricultural Transportation Environmental Context

CRS Report RL32401(pdf), Agriculture as a Source of Barge Demand on the Upper Mississippi and Illinois Rivers: Background and Issues

CRS Issue Brief IB10120, Army Corps of Engineers Civil Works Program: Issues for Congress

CRS Contact: Randy Schnepf (7-4277)

Page last updated July 22, 2004.

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