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Market Matters Blog 12/14 13:01
DDG Prices Move Higher
So Long, Farewell, Upper Mississippi River 2018 Shipping Season
DTN DDG Weekly Update
DDG Prices Continue Higher
Impact of Infrastructure and Transportation Costs on Soybeans
Harvest 2018 Keeps Going and Going and Going
DDG Prices Stronger
DDG Prices Higher
Olmsted Locks and Dam a Welcome New Neighbor on Ohio River
Ag Groups Make Final Plea to FMSCA for Changes to HOS Rule
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DDG Prices Move Higher
OMAHA (DTN) -- Distillers dried grains average spot prices from the 40
locations DTN contacted were $8 per ton higher, at $161 per ton for the week
ended Dec. 13, versus one week ago.
DTN weekly DDG average prices have moved up $23 per ton the last three
weeks, in part due to tight supplies. The EIA reported Wednesday, Dec. 12, that
ethanol production was at 1.046 million barrels per day for the week ended Dec.
7, a three-week low and reversing down from the high rates reported last week,
and 3.9% lower than the corresponding week a year ago.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Dec. 13 was at 120.05%. The value of DDG relative to
soybean meal was at 52.03%. The cost per unit of protein for DDG was $5.96,
compared to the cost per unit of protein for soybean meal at $6.51. The DDG
value to cash corn is still above the two-year average, and the cost per unit
compared to soymeal moved higher again this past week, narrowing the spread
between the two.
Informa Economics noted in their weekly DDG price update that, "In the past
week, central Illinois estimated margins decreased 4 cents to negative 10
cents. Ethanol plant margins could remain depressed until the summer driving
season hits next spring. Merchandisers think that DDG prices could remain
elevated on limited supplies, despite some livestock operations trying to
cutback ration portions."
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 12/13/2018 12/6/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $185 $175 $10
Modified $93 $88 $5
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $180 $175 $5
Wet $87 $85 $2
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $165 $160 $5
Indiana Dry $160 $155 $5
Iowa Dry $160 $155 $5
Michigan Dry $155 $150 $5
Minnesota Dry $160 $155 $5
North Dakota Dry $170 $165 $5
New York Dry $165 $165 $0
South Dakota Dry $160 $155 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $165 $165 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $160 $147 $13
Iowa Dry $175 $160 $15
Michigan Dry $145 $145 $0
Minnesota Dry $175 $157 $18
Missouri Dry $180 $170 $10
Ohio Dry $158 $145 $13
South Dakota Dry $165 $160 $5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $144 $6
Wet $60 $55 $5
Illinois Dry $160 $155 $5
Nebraska Dry $150 $144 $6
Wet $60 $55 $5
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $155 $155 $0
Indiana Dry $150 $150 $0
Iowa Dry $160 $155 $5
Michigan Dry $150 $150 $0
Minnesota Dry $160 $160 $0
Nebraska Dry $175 $170 $5
New York Dry $160 $160 $0
North Dakota Dry $165 $155 $10
Ohio Dry $150 $150 $0
South Dakota Dry $165 $160 $5
Wisconsin Dry $145 $142 $3
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $155 $145 $10
Iowa Dry $150 $140 $10
Minnesota Dry $160 $145 $15
Nebraska Dry $155 $135 $20
Ohio Dry $155 $145 $10
South Dakota Dry $155 $145 $10
California $228 $220 $8
Western Milling, Goshen, California (559-302-1074)
California Dry $232 $230 $2
*Prices listed per ton.
Weekly Average $161 $154 $7
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 12/13/2018 $3.7550 $134.11
Soybean Meal 12/13/2018 $309.40
DDG Weekly Average Spot Price $161.00
DDG Value Relative to: 12/13 12/6
Corn 120.05% 115.91%
Soybean Meal 52.03% 49.68%
Cost Per Unit of Protein:
DDG $5.96 $5.70
Soybean Meal $6.51 $6.53
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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So Long, Farewell, Upper Mississippi River 2018 Shipping Season
The Upper Mississippi River (UMR) shipping season is officially over as tows
pushing barges, like flocks of geese, headed south for the winter. It's always
bittersweet for those of us living near the Mississippi River in downtown St.
Paul, Minnesota, when the last barge heads south for the winter. When I walk
along the river this time of year, it's so quiet and calm, as if it has gone to
sleep for the next five months.
However, during the winter season, the U.S. Army Corps of Engineers (USACE)
(Corps) doesn't slow down. They keep busy with repairs to various locks that
are closed until spring. Corps officials had asked to have all navigation
vessels move south of Lock and Dam 6, near Trempealeau, Wisconsin, no later
than midnight on Dec. 1, which required vessels near St. Paul, Minnesota, to
depart from there no later than Nov. 30. The last tow to depart from St. Paul,
Minnesota, was Motor Vessel Thomas E. Erickson, on Nov. 25, according to the
USACE, St. Paul District.
Corps engineers began preparations for several winter repairs at numerous
locks within the St. Paul District. According to the district website,
engineers were scheduled to begin repairs at Lock and Dam 6 on Dec. 2. The
locks include Lock and Dam 4, near Alma, Wisconsin; Lock and Dam 5, near
Minnesota City, Minnesota; Lock and Dam 5A, near Fountain City, Wisconsin; and
Lock and Dam 9, near Lynxville, Wisconsin, with repairs scheduled to begin Dec.
10.
The St. Paul District is where the "Mighty Mississippi River" starts its
long journey through the middle of the United States to the Gulf of Mexico. The
district borders follow the edges of four river basins -- the Mississippi
River, the Red River of the North, the Souris River and the Rainy River -- and
covers an area of approximately 139,000 square miles. This area includes most
of Minnesota, the western half of Wisconsin, the northeastern half of North
Dakota and small portions of northeastern South Dakota and northeastern Iowa.
The district also shares approximately 500 miles of border with three Canadian
provinces.
The St. Paul District is responsible for supporting inland navigation by
operating 13 locks and dams and by maintaining the nine-foot navigation channel.
For now, the river will hibernate until spring when the first tow makes its
way through Lake Pepin to signal the beginning of a new shipping season for the
UMR. Lake Pepin is a naturally occurring lake and the widest naturally
occurring part of the Mississippi River. It is located approximately 60 miles
(97 km) downstream from St. Paul, Minnesota. It is a widening of the river on
the border between Minnesota and Wisconsin.
On Wednesday, April 11, 2018, after cutting through ice on Lake Pepin, the
first tow of the season, Motor Vessel Michael Poindexter, pushing 12 barges,
locked through Lock and Dam 2, near Hastings, Minnesota, on its way to St.
Paul. Her journey there signaled the start of the 2018 navigation season in the
St. Paul District.
The last tow this year to depart the St. Paul District through Lock and Dam
10, the district's southernmost lock near Guttenberg, Iowa, was Motor Vessel
Titletown U.S.A. She locked through Lock 10, heading southbound Dec. 1,
officially closing the 2018 navigation season.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DTN DDG Weekly Update
OMAHA (DTN) -- Distillers dried grains average spot prices from the 40
locations DTN contacted were $8 per ton higher, at $154 per ton for the week
ended Dec. 6, versus one week ago. Prices have moved higher four weeks in a
row, in part due to an increase in cold weather demand and tighter supplies
that continue to pull DDG prices higher.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Dec. 6 was at 115.91%. The value of DDG relative to
soybean meal was at 49.68%. The cost per unit of protein for DDG was $5.70,
compared to the cost per unit of protein for soybean meal at $6.53. The DDG
value to cash corn is currently above the two-year average and the cost per
unit compared to soymeal moved higher this past week.
In their weekly price update, U.S. Grains Council said that, "This week,
merchandisers reported sales to Indonesia and Vietnam as those markets continue
to stand out as solid destinations for U.S. DDGS. DDGS at the U.S. Gulf are at
$215 per metric ton (MT) for December delivery and increasing into deferred
months. On average, 40-foot containers to southeast Asian destinations were up
$6/MT this week from last week."
The U.S. Census Bureau said Thursday that U.S. exports of DDGS totaled
1,018,097 mt in October, a little less than September, but up 1% from a year
ago. U.S. DDGS continue to find broad interest with Mexico, Vietnam, Indonesia
and Thailand listed as the top four destinations in October. The first 10
months of 2018 showed exports of U.S. DDGS up 9% from a year ago.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 12/6/2018 11/29/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $175 $160 $15
Modified $88 $82 $6
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $175 $165 $10
Wet $85 $80 $5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $160 $150 $10
Indiana Dry $155 $145 $10
Iowa Dry $155 $145 $10
Michigan Dry $150 $140 $10
Minnesota Dry $155 $145 $10
North Dakota Dry $165 $155 $10
New York Dry $165 $155 $10
South Dakota Dry $155 $145 $10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $165 $155 $10
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $147 $143 $4
Iowa Dry $160 $152 $8
Michigan Dry $145 $140 $5
Minnesota Dry $157 $147 $10
Missouri Dry $170 $167 $3
Ohio Dry $145 $142 $3
South Dakota Dry $160 $150 $10
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $144 $144 $0
Wet $55 $55 $0
Illinois Dry $155 $150 $5
Nebraska Dry $144 $144 $0
Wet $55 $55 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $155 $135 $20
Indiana Dry $150 $145 $5
Iowa Dry $155 $145 $10
Michigan Dry $150 $140 $10
Minnesota Dry $160 $145 $15
Nebraska Dry $170 $160 $10
New York Dry $160 $150 $10
North Dakota Dry $155 $150 $5
Ohio Dry $150 $145 $5
South Dakota Dry $160 $145 $15
Wisconsin Dry $142 $136 $6
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $139 $6
Iowa Dry $140 $135 $5
Minnesota Dry $145 $145 $0
Nebraska Dry $135 $135 $0
Ohio Dry $145 $140 $5
South Dakota Dry $145 $140 $5
California $220 $212 $8
Western Milling, Goshen, California (559-302-1074)
California Dry $230 $223 $7
*Prices listed per ton.
Weekly Average $154 $146 $8
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
***
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 12/6/2018 $3.7200 $132.86
Soybean Meal 12/6/2018 $310.00
DDG Weekly Average Spot Price $154.00
DDG Value Relative to: 12/6 11/29
Corn 115.91% 113.48%
Soybean Meal 49.68% 47.57%
Cost Per Unit of Protein:
DDG $5.70 $5.41
Soybean Meal $6.53 $6.46
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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DDG Prices Continue Higher
OMAHA (DTN) -- Distillers dried grains average spot prices from the 40
locations DTN contacted were $8 per ton higher, at $146 per ton for the week
ended Nov. 29, versus two weeks ago. Prices have moved higher three weeks in a
row, and merchandisers noted that slowdowns and plant closures has really
tightened supplies.
Informa Economics noted that, one of the main reasons for the quick jump
higher in DDG prices is struggling ethanol plant margins. "A 13-year low in
ethanol prices is putting the squeeze on financial health and throttling
production potential for the winter."
The EIA reported Wednesday that ethanol plant production increased modestly
by 6,000 barrels per day (bpd) to 1,048 million bpd during the week ended Nov.
23, 1.7% lower than the corresponding week a year ago.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Nov. 29 was at 113.48%. The value of DDG relative to
soybean meal was at 47.57%. The cost per unit of protein for DDG was $5.41,
compared to the cost per unit of protein for soybean meal at $6.46. On a
relative value, DDG prices are mostly in line with soymeal, but are slightly
higher than normal basis corn values.
"Higher prices could start to create more pushback in rations down the line,
but for now most traders are leaning bullish," noted Informa.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 11/29/2018 11/15/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $153 $7
Modified $82 $80 $2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $165 $150 $15
Wet $80 $75 $5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $145 $5
Indiana Dry $145 $135 $10
Iowa Dry $145 $135 $10
Michigan Dry $140 $140 $0
Minnesota Dry $145 $130 $15
North Dakota Dry $155 $135 $20
New York Dry $155 $145 $10
South Dakota Dry $145 $130 $15
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $145 $10
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $143 $138 $5
Iowa Dry $152 $148 $4
Michigan Dry $140 $137 $3
Minnesota Dry $147 $138 $9
Missouri Dry $167 $158 $9
Ohio Dry $142 $138 $4
South Dakota Dry $150 $140 $10
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $144 $144 $0
Wet $55 $55 $0
Illinois Dry $150 $148 $2
Nebraska Dry $144 $144 $0
Wet $55 $55 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $135 $135 $0
Indiana Dry $145 $135 $10
Iowa Dry $145 $135 $10
Michigan Dry $140 $135 $5
Minnesota Dry $145 $130 $15
Nebraska Dry $160 $145 $15
New York Dry $150 $150 $0
North Dakota Dry $150 $140 $10
Ohio Dry $145 $135 $10
South Dakota Dry $145 $135 $10
Wisconsin Dry $136 $130 $6
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $139 $140 -$1
Iowa Dry $135 $130 $5
Minnesota Dry $145 $130 $15
Nebraska Dry $135 $125 $10
Ohio Dry $140 $140 $0
South Dakota Dry $140 $125 $15
California $212 $192 $20
Western Milling, Goshen, California (559-302-1074)
California Dry $223 $206 $17
*Prices listed per ton.
Weekly Average $146 $138 $8
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
********
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 11/29/2018 $3.6025 $128.66
Soybean Meal 11/29/2018 $306.90
DDG Weekly Average Spot Price $146.00
DDG Value Relative to: 11/29 11/16
Corn 113.48% 105.14%
Soybean Meal 47.57% 45.19%
Cost Per Unit of Protein:
DDG $5.41 $5.11
Soybean Meal $6.46 $6.43
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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Impact of Infrastructure and Transportation Costs on Soybeans
Since the 1990s, the United States, the world's leading producer of
soybeans, has lost market share to Brazil, noted USDA in its most recent study,
"The Impact of Infrastructure and Transportation Costs on U.S. Soybean Market
Share: An Updated Analysis from 1992-2017."
"U.S. market share declined from 66% in 1992 to 40% in 2017. U.S.
competitiveness, relative to South America, declined during a period of strong
global growth in soybean demand, however, the United States remains the
second-largest exporter," noted USDA. "For the last 17 years, China, the
world's largest soybean importer, has been responsible for nearly all of the
growth in global soybean trade. In 2017, per-bushel total production costs in
the main producing areas of the U.S. Midwest averaged $9.29 per bushel;
compared with $7.52 per bushel in Argentina, $7.53 per bushel in the Brazilian
state of Mato Grosso and $8.01 per bushel in Parana." Although variable costs
in the United States are lower, fixed costs due to land values and capital
costs are much higher than in Mato Grosso and Parana.
"As the largest producer of soybeans in the world, one of the challenges for
the United States partially depends on competing countries' ability to improve
their infrastructure capacity and reduce their transportation costs," noted
USDA. "Differences in transportation costs can make South American soybean
exports more profitable than those of the United States, diverting trade from
the United States to Brazil or Argentina at key junctures of the most lucrative
marketing periods.
"Since 2013, Brazil has surpassed the U.S. in soybean exports, becoming the
top world soybean exporter", said USDA in the study. "The road ahead for U.S.
soybean competitiveness is uncertain. Brazil is intensifying its efforts to
increase production and improve transportation infrastructure, and it has
gained soybean market share. Brazil's freight rates may also be reduced in the
future because of improvements to its transportation infrastructure."
Here is a link to the entire USDA study and it is well worth the read:
http://www.dtn.com/ag/assets/SoybeanMarketShare19922017.pdf
WHAT U.S NEEDS TO DO IN ORDER TO REMAIN COMPETITIVE
It's no secret that the aging locks and dams on the U.S. river system are in
desperate need of repair and or replacement. Each time locks go down for repair
for any reason, commerce on the river is interrupted, causing extra costs for
exporters if shipments are late out of the Gulf waiting for late barges to
arrive. This is a story told over and over again, and so far, without a good
ending.
In a December 2016, the Soy Transportation Coalition (STC) released a study
funded by the soybean checkoff, "Farm to Market -- A Soybean's Journey." The
study offered a warning that future production increases, along with
infrastructure improvements by South American competitors, could suppress the
profitability of the U.S. soybean industry.
"Transportation infrastructure gives U.S. farmers a significant competitive
advantage over our international competitors, but without investment, we won't
enjoy that advantage for long," said Mark Seib, a soybean farmer from
Poseyville, Indiana, and director on the United Soybean Board. "We need to
focus on investing in our infrastructure now to position ourselves for a
competitive and profitable future."
"Great nations, as well as great industries, continue to invest in
themselves," explained Mike Steenhoek, executive director of the STC.
"Investing in infrastructure should not be an isolated incident. It needs to be
perpetual. By issuing this report, it is our hope that we will increase
attention and focus on the importance of investing in our economy and industry
to enable us to remain competitive in the 21st century." The entire study can
be found on the front page of the STC website.
In May 2018, the STC published another study called "Impact of Dredging the
Lower Mississippi River to 50 Feet." The study notes that improving the draft
of the lower Mississippi River from 45 feet to 50 feet would increase
reliability of river navigation and reduce the impact of low water events. The
current depth of 45 feet on the lower Mississippi River is typically dredged to
at least 47 feet to ensure the vessel does not hit the bottom of the riverbed.
If the proper conditions exist, a Neopanamax vessel can be loaded to 77,000
metric tons under 47-foot depth.
According to the study, the impact of a deeper-draft lower Mississippi River
will save $5 per metric ton in ocean freight as the average volume loaded
increases from 66,000 metric tons to 78,000 metric tons. "The barge river
elevator to export elevator will have an additional 13 cent per bushel margin
to buy volume. To prevent the volume from flowing to the river, other inland
facilities (crushers, unit train loaders, container loaders, etc.) will have to
pay up to keep and handle the soybeans."
What facilities will be willing to pay depends on how close the facilities
are to the river. "In short, an inland elevator will not pay more than the
transportation to the river," the study results noted. "Currently the draw area
is estimated to be 205 miles based on an average load of 66,000 metric tons.
Increasing to 78,000 metric tons per load will extend the draw area to 245
miles. From a basis standpoint, basis will improve 13 cents per bushel for 205
miles from the river and decline steadily until reaching zero at 246 miles. The
deeper draft of the lower Mississippi River will increase soybean revenues by
close to a half billion dollars annually." This entire study also touches on
the impact of corn exports, among other things. The 144-page study is worth
looking over and can also be found on the STC website.
In October 2018, the latest study done by the STC, with help from the
Illinois soybean checkoff program and also found on its website, is titled,
"Containerized Exports via the Inland Waterway System: An Opportunity for
Agriculture? The study provides clarity on the potential for soybeans, soybean
meal and other agricultural products to benefit from a new and innovative
approach moving containers for the hauling of global trade via the nation's
inland waterway system.
"The soybean industry continues to explore opportunities to develop new
international customers," said Steenhoek in an email to DTN. "The current trade
friction with China has added a sense of urgency in doing so. Containerized
shipping provides the potential to access diverse and localized customers that
are often unable or unwilling to purchase soybeans in large, bulk quantities."
The news release posted on the STC website highlights "an innovative concept
that has the potential to diversify our supply chain and allow local grain
handlers and perhaps even farmers to more directly participate in the
international market," according to Steenhoek.
"It should be the goal of the STC to explore opportunities to remove
logistical steps between the farmers growing soybeans and the ultimate
customers purchasing them," said Gerry Hayden, a soybean farmer from Calhoun,
Kentucky, and chairman of the STC. "Every step that is removed allows farmers
to realize a higher value for what is produced. We are therefore excited to
explore this new approach for transporting containers along our nation's inland
waterway system."
Steenhoek said that the research for this study highlighted this innovative
approach that can "provide a cost-effective, fast and secure transportation
option to our international customers. As we interact with our international
customers, we increasingly hear a desire for being able to source soybeans and
agricultural products more directly from more localized elevators and even
specific farmers.
"Our customers also routinely express a desire for greater quality
preservation and smaller shipping quantities that conform better with the scale
of their specific operations. Exploring this new model of containerized
shipping via the inland waterway system is a response to this growing customer
sentiment. We look forward to utilizing our research to further introduce
farmers and agricultural shippers to this innovative opportunity. Ultimately,
we hope to see this approach become a reality to the benefit of America's
farmers," concluded Steenhoek.
The Soy Transportation Coalition will be partnering with American Patriot
Holdings, LLC and Plaquemines Port Harbor and Terminal District in establishing
working groups among communities and regions along the inland waterway system
that are well positioned to benefit from this potentially new supply chain.
To inquire further about the working groups, contact Mike Steenhoek at
515-727-0665 or msteenhoek@soytransportation.org
Here is link to the Soy Transportation Coalition website where all of their
studies are located:
http://www.soytransportation.org/
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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Harvest 2018 Keeps Going and Going and Going
You've likely seen the TV commercials featuring the cute, pink toy rabbit,
wearing sunglasses and blue- and black-striped sandals forever beating a bass
drum. He is the Energizer Bunny and is the mascot for Energizer batteries,
which the company claims keep going and going and going. He could also be the
mascot for harvest 2018.
One month ago, I wrote a column about farmers in the Midwest who endured
late planting due to April snows, record-setting rainfall in early summer,
hailstorms, and then rain and snow delaying harvest through the entire fall.
It's been a tough year for farmers in nearly all corners of the Midwest. Loss
of crop yield and quality downgrades have cut into an already slim bottom line
for farmers this year.
I checked in with some of those farmers I had spoken to in early October to
see how their harvest was coming along now and what their quality looked like.
"We finished up two weeks ago right before we received an inch and a half of
rain," said Dave Newby of Bondurant, Iowa. "It was a struggle with breakdowns.
Corn yield was our best ever at a 227-bushel (bu) average despite tornado and
flood damage; easily our best corn crop despite about 7% damage from a EF-2
July tornado and some flooding issues. Soybeans made 63 bu despite 3 bu to 4 bu
shatter loss. Quality was good enough to avoid a big dock with just 2% to 3%
damage. We feel fortunate to have narrowly avoided a bigger problem." Newby
said now the main concern is having enough good days to finish the tillage,
which is only about 20% done.
Andy Weisser of Roscoe, South Dakota, said he finished up harvest on Nov. 2,
and it was pretty much what he expected.
"(The) main thing is it's not how much rain we got, but when we got it,"
Weisser said. "Yields improved 20 miles north and west of our farm (we don't
have any land in those areas.) Our corn averaged 101 bushels per acre (bpa),
which is 30 bpa to 40 bpa below average. The stalk health was poor, and I
learned a lot about changes I could do to improve if next year is dry like
this. Our soybeans averaged 30 bpa, which was 5 bpa to 10 bpa off average."
Weisser added, "Soil health history showed! We are on two tough, dry years
in a row, so I hope 2019 will give us a break. I guess this job isn't supposed
to be easy!"
Ryan Wagner of Wagner Farms near Roslyn, South Dakota, told me on Friday,
Nov. 16: "We are still working on corn here and have about a good week left.
It's been stop and go with the cold and snow, so it's hard to say at this point
if a week's worth of work will take a week or a month. Corn yields have been
very good outside of the hailed stuff with moisture still in that 18% to 20%
range. We finished up soybeans in that open window in late October with good
yields, but slightly disappointing relative to phenomenal corn yields we have
been seeing.
"I don't remember a year where there has been this little of fall fieldwork
completed. The first half of October was rainy, and we only had about a two- to
three-week window for tillage and fall fertilizer application. Then, the cold
and snow shut things down. We only got about half of the fall fertilizer
applied that we wanted to, and it looks like we are probably done for the
season unless we get a week of warm weather after Thanksgiving."
Wagner noted that the quality of some of the soybeans that sat through the
snow and rain is a little bit suspect, but not too bad. "Yesterday (Thursday)
and the first part of today (Friday) have been very nice. Sounds like some
rain/snow moving in later this afternoon and more snow again tomorrow
afternoon, then a high of 26 (degrees Fahrenheit) Saturday."
Mike Carlson of Red Oak, Iowa, told me on Saturday, Nov. 17: "This nightmare
harvest continues on for me. We are not done yet. Got about three days left.
Should get done Monday with any luck, but there hasn't been much of that this
fall. It's been a challenging harvest. Lots of mud and wet spots to deal with.
We've been stuck so many times that I lost track. We've had to deal with snow
twice. Like I figured, there are spots we couldn't get harvested because it's
too wet. It's been really cold lately, too, so we had to get winter fuel in
things also.
"I had the worst bean crop since the dry year of 2012. They were the
best-looking crummy beans I've ever seen. To look at them, they looked great,
but the beans were very tiny and poor quality. We also got docked on a small
portion of our beans for damage because of all the rain and snow.
The corn crop is very good, however. I would guess at this point it will be
one of my best corn crops. I don't really get how the corn can be so good and
the beans so bad."
Carlson said he can't wait for this harvest to be over. He told me on Sunday
that they just had their third snow event of harvest. "They had taken all the
snow out of the forecast on Friday, and we get 3 inches of snow on Saturday.
Just unbelievable. I hope I never see another harvest like this. It's been just
awful."
Dennis Bogaards of Pella, Iowa, said they finished harvest Tuesday, Nov. 13.
"We did have yield loss in our beans between 5 bpa and 10 bpa," Bogaards said.
"Damage in the beans was between 5% and 40%, depending on the variety. This was
a new problem for us. I have never seen damaged beans out of the field. It will
cause concerns for storage, and I really wonder about seed quality for next
year's seed we will be planting. Corn had some damage, but very minor compared
to the beans. We had to be very careful of where we combined and tried to keep
wagons and grain carts out of the field as they tend to get stuck before the
combine and do a lot of compaction."
I asked Bogaards if insurance would cover any of the quality loss.
"Insurance? Yes and no," Bogaards said. "Insurance covers damage starting at
8%; most of my beans were 5% to 10% damage, and we had one field that was the
worst at an average of 30% damage. The way my insurance works is that we
average it together, and I had enough beans that were less than 8% to average
the bad beans out. So, it will cause some headaches to blend good beans with
bad beans on the truck but should be able to get them down to less than 10%
damage.
"Others that insure fields separately would be able to get insurance help.
But, they also pay way more in premiums too. This problem is much more common
in the Southern U.S.; we just don't normally get that much rain in the fall and
then two weeks of cloudy, damp conditions. I think if we had gotten some sun to
help dry the plants out, it would not have been an issue. Even with that much
rain."
SOUTHERN HARVEST: QUALITY DOWNGRADE FOR SOYBEANS, LATE HARVEST FOR CORN
Besides the weather delays in the Midwest, Southern states also saw weather
issues that not only delayed their harvest, but also caused some serious
quality issues that have created havoc for shippers.
In late October, reports surfaced of barges originating from West Memphis,
Arkansas and south being rejected at the Gulf due to heavy damage. Significant
discounts, on top of already heavy discounts for poor quality, were put in
place, and if the beans were bad enough, they were rejected. Some of the
rejected barges were reported to have been sent farther north in hopes there
would be better-quality beans available to blend off the poor beans.
River Gulf Grain, a division of Agrex Inc. located in Bettendorf, Iowa,
posted this on their website: "Effective 10/18, we must reject any soybean
loads over 5% damage. There is no market for off-grade barges in the Gulf, and
there are not enough good beans locally or in the Gulf to blend out."
In the USDA weekly Crop Progress report released on Tuesday, Nov. 13,
Arkansas Cooperative Extension Service county agents commented on the current
conditions there as of Nov. 11. Brent Griffin, Prairie County said: "Frequent
rainfall halted all harvesting last week. Water is standing in many fields with
soybean quality continuing to deteriorate."
Kevin Lawson, Faulkner County, Arkansas, said, "Rain throughout the county
continued to slow soybean harvest."
Mike Andrews, Randolph County, Arkansas, said: "Rain slowed harvest last
week with only a few fields of soybeans harvested. We need dry weather to be
able to dig remaining peanuts that are in the ground and to get those that are
dug harvested. There is concern about quality of peanuts going down due to
freezing temperatures."
Another troublesome result of the unfinished fall harvest in the Southern
U.S. has been a delay to winter wheat planting. Mississippi State University
Lowndes County Extension agent Reid Nevins anticipates wheat acreage will go
down this year there, because two weeks of rain in late October and early
November prevented the last of the harvest and wheat planting.
In Missouri, soybeans harvested reached 70% as of Nov. 11, 15 percentage
points behind average, causing their winter wheat planting to be 10 percentage
points behind average. That is a similar story for other Southern states. And
it hasn't been just due to rain, but snow as well.
As of Nov. 11, U.S. winter wheat planting was at 89%, more than one week
behind the 94% average. States furthest behind normal were Arkansas and
California at around 15 percentage points behind average, followed by Oklahoma,
North Carolina and Kansas at around 10 percentage points behind average. It's
like a double whammy to farmers who may not get their fall wheat crop planted
because of the delay to their fall crops harvest. Many counties in some of the
states mentioned are already past their insurance last plant date.
Harvest 2018 has been miserable, to say the least, for many farmers, and for
some farmers throughout the U.S., it's still not over. A.J. Worden a farmer
from Burlington, Colorado, described it perfectly: "If harvest '18 was a
softball tournament, we'd be in the championship game, top of inning number 41."
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DDG Prices Stronger
OMAHA (DTN) -- Distillers dried grains average spot prices from the 40
locations DTN contacted were $2 per ton higher, at $138 per ton for the week
ended Nov. 15, versus one week ago.
Based on the average of prices collected by DTN, the value of DDG relative
to corn for the week ended Nov. 15 was at 105.14%. The value of DDG relative to
soybean meal was at 45.19%. The cost per unit of protein for DDG was $5.11,
compared to the cost per unit of protein for soybean meal at $6.43. On a
relative value, DDG prices are mostly in line with soymeal, but are slightly
higher than normal basis corn values.
The EIA reported Thursday that ethanol plant production decreased by a
modest 1,000 barrels per day (bpd) to 1.067 million bpd, the first weekly
decline in four weeks, during the week ended Nov. 9. Informa Economics noted
that, "Ethanol plant output is expected to be flat to lower in the coming
weeks. More plants could idle than previously thought, with margins being very
low. Ethanol plants are trying to get a premium out of DDGs to make it worth
running."
In its weekly distillers dried grains with solubles (DDGS) price update,
U.S. Grains Council noted, "Prices were generally up this week as continued
demand from Southeast Asian markets and increased demand for domestic feeding
buoyed markets. Merchandisers reported sales to Vietnam as indications for
December delivery of 40-foot containers to Southeast Asia are up 4$ per metric
ton (mt) on average. At the U.S. Gulf, indications for December delivery were
up for the third straight week to $204/mt. U.S. rail rates were up as well."
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 11/15/2018 11/8/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $153 $150 $3
Modified $80 $78 $2
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $150 $145 $5
Wet $75 $75 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $145 $145 $0
Indiana Dry $135 $134 $1
Iowa Dry $135 $130 $5
Michigan Dry $140 $135 $5
Minnesota Dry $130 $125 $5
North Dakota Dry $135 $130 $5
New York Dry $145 $145 $0
South Dakota Dry $130 $125 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $145 $143 $2
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $138 $138 $0
Iowa Dry $148 $138 $10
Michigan Dry $137 $137 $0
Minnesota Dry $138 $135 $3
Missouri Dry $158 $155 $3
Ohio Dry $138 $138 $0
South Dakota Dry $140 $137 $3
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $144 $144 $0
Wet $55 $55 $0
Illinois Dry $148 $145 $3
Nebraska Dry $144 $144 $0
Wet $55 $55 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $135 $135 $0
Indiana Dry $135 $130 $5
Iowa Dry $135 $130 $5
Michigan Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $145 $135 $10
New York Dry $150 $140 $10
North Dakota Dry $140 $140 $0
Ohio Dry $135 $130 $5
South Dakota Dry $135 $130 $5
Wisconsin Dry $130 $130 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $140 $140 $0
Iowa Dry $130 $130 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $125 $125 $0
Ohio Dry $140 $140 $0
South Dakota Dry $125 $125 $0
California $192 $192 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $206 $195 $11
*Prices listed per ton.
Weekly Average $138 $136 $2
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 11/15/2018 $3.6750 $131.25
Soybean Meal 11/15/2018 $305.40
DDG Weekly Average Spot Price $138.00
DDG Value Relative to: 11/16 11/8
Corn 105.14% 101.95%
Soybean Meal 45.19% 44.43%
Cost Per Unit of Protein:
DDG $5.11 $5.04
Soybean Meal $6.43 $6.44
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
DDG Prices Higher
OMAHA (DTN) -- Distillers dried grains average spot prices from the 40
locations DTN contacted were $2 per ton higher, at $136 per ton for the week
ended Nov. 8, versus one week ago. Based on the average of prices collected by
DTN, the value of DDG relative to corn for the week ended Nov. 8 was at
101.95%. The value of DDG relative to soybean meal was at 44.43%. The cost per
unit of protein for DDG was $5.04, compared to the cost per unit of protein for
soybean meal at $6.44.
In its weekly distillers dried grains with solubles (DDGS) price update,
U.S. Grains Council noted, " The market continues to bump along with a lack of
bullish or bearish news resulting in several weeks of generally steady prices.
This week merchandisers reported sales to Indonesia and Vietnam for November
and December delivery. September export numbers show continued strong demand
from Southeast Asian markets -- especially Indonesia, Thailand and Vietnam.
"Indications for November delivery of 40-foot containers to Southeast Asia
are down slightly this week from last (-1$/MT on average) while containers to
Taiwan fell $5/MT. At the U.S. Gulf, indications for November delivery were up
for the second straight week; U.S. rail rates were up as well. Prices for
January delivery are expected to increase due to higher domestic demand during
the winter months."
The U.S. Census Bureau reported last week that U.S. exports of DDGS totaled
1,028,254 metric tons in September, also down from August, but up 15% from a
year ago. U.S. DDGS continue to find broad interest with Mexico, Vietnam, and
South Korea listed as the top three destinations in September. The first nine
months of U.S. DDGS exports were up 10% in 2018 from a year ago.
ALL PRICES SUBJECT TO CONFIRMATION CURRENT PREVIOUS CHANGE
COMPANY STATE 11/8/2018 11/1/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $150 $145 $5
Modified $78 $75 $3
Show Me Ethanol LLC, Carrollton, MO (660-542-6493)
Missouri Subject Dry $145 $145 $0
Wet $75 $75 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $145 $145 $0
Indiana Dry $134 $134 $0
Iowa Dry $130 $130 $0
Michigan Dry $135 $135 $0
Minnesota Dry $125 $125 $0
North Dakota Dry $130 $130 $0
New York Dry $145 $145 $0
South Dakota Dry $125 $125 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $143 $143 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $138 $132 $6
Iowa Dry $138 $132 $6
Michigan Dry $137 $132 $5
Minnesota Dry $135 $133 $2
Missouri Dry $155 $145 $10
Ohio Dry $138 $137 $1
South Dakota Dry $137 $131 $6
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $144 $144 $0
Wet $55 $55 $0
Illinois Dry $145 $145 $0
Nebraska Dry $144 $144 $0
Wet $55 $55 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $135 $130 $5
Indiana Dry $130 $130 $0
Iowa Dry $130 $125 $5
Michigan Dry $135 $135 $0
Minnesota Dry $130 $125 $5
Nebraska Dry $135 $135 $0
New York Dry $140 $140 $0
North Dakota Dry $140 $140 $0
Ohio Dry $130 $125 $5
South Dakota Dry $130 $125 $5
Wisconsin Dry $130 $130 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $140 $140 $0
Iowa Dry $130 $125 $5
Minnesota Dry $130 $130 $0
Nebraska Dry $125 $125 $0
Ohio Dry $140 $140 $0
South Dakota Dry $125 $125 $0
California $192 $187 $5
Western Milling, Goshen, California (559-302-1074)
California Dry $195 $195 $0
*Prices listed per ton.
Weekly Average $136 $134 $2
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 11/8/2018 $3.7350 $133.39
Soybean Meal 11/8/2018 $306.10
DDG Weekly Average Spot Price $136.00
DDG Value Relative to: 11/8 11/1
Corn 101.95% 102.30%
Soybean Meal 44.43% 42.78%
Cost Per Unit of Protein:
DDG $5.04 $4.96
Soybean Meal $6.44 $6.60
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
Olmsted Locks and Dam a Welcome New Neighbor on Ohio River
The Locks and Dams 52 and 53 Replacement Project, known as the Olmsted Locks
and Dam, opened for business on Aug. 30, 2018, after 30 years of construction
and a $3 billion price tag. The project suffered years of delays due to delays
in funding and lack of availability of appropriations, cost increases of
materials over time, unforeseen engineering problems, river conditions and
other issues.
Now that it's finished, the project will generate economic net benefits to
the nation of more than $640 million annually, and the structures will pay for
themselves in approximately four years, the U.S. Army Corps of Engineers
(USACE) noted on its website.
"The Olmsted project consists of two 110- by 1,200-foot locks adjacent to
the Illinois bank, and a dam comprised of five Tainter gates, 1,400 feet of
boat-operated wickets and a fixed weir," the Corps said. A Tainter gate is a
type of radial arm floodgate used in dams and canal locks to control water flow.
The Olmsted Locks and Dam replaces the aging structures Ohio River Locks and
Dams 52 and 53. There will be a fourfold increase in efficiency, as Olmsted
provides for a single project with twin 1,200-foot locks, noted the Corps.
Reliability will also be significantly increased, as the existing locks are
decades beyond their designed service life. Olmsted will greatly reduce tow and
barge delays through the busiest stretch of river in America's inland waterways.
According to the USACE, Locks and Dams 52 and 53 in the lower portion of the
river are remnants of the original 1929 river navigation system. More than 150
million tons of cargo pass yearly through the stretch of the Ohio River where
the Olmsted Locks and Dam are located, more tonnage than at any other place in
the U.S. inland navigation system. As a whole, the Ohio River carries more than
280 million tons of commodities a year.
"Locks and Dams 52 and 53 on the lower Ohio River are the last of the old
wicket dams. The wickets are constructed of heavy timber about 4 feet wide and
up to 20 feet long. Raising or lowering the wickets is done by a crew on a
steam boiler winch barge and track hoe that moves along the upstream face of
the dam," said the Corps.
The opening of Olmsted Locks and Dam originally was expected to be in
October, but the early opening in August proved to be a blessing. The Waterways
Journal reported that, on Aug. 24, 2018, the Louisville Engineer District told
the River Industry Executive Task Force that a miter gate problem at Lock 52
almost caused another full closure at the key chokepoint. Late in the day, the
district canceled a proposed 48-hour closure, because the Corps had decided to
start raising the Olmsted wickets to hold navigation pools due to receding
river stages.
Locks 52 and 53 have been costly for the barge industry and have hurt
farmers during harvest more than once during their lifespan. In fall 2017, they
were closed from Sept. 6-14 due to an unscheduled maintenance outage, halting
all navigation while project personnel raised the wicket dam. This outage was
in addition to the river closure at Lock 53 on Oct. 2 due to a failure of the
hydraulics that open and close the lower wicket gate. Then, shortly after that
closure, they were closed for nearly one week due to rising water and did not
reopen until Oct. 16. That closure caused a backlog of nearly 60 vessels with
over 650 barges of all commodities waiting to transit the site, according to
the USDA Weekly Grain Transportation Report at that time.
The Waterways Journal reported that Marty Hettel, chairman of the Inland
Waterways Users board and vice president of government affairs at American
Commercial Barge Line, said the failures of Locks 52 and 53 over the past 10
years have imposed costs of about $75 million on shippers.
In fact, Lock and Dam 52 cost $2.5 million to $3 million a year to maintain,
on average. In fiscal year 2017, from October 2016 to September 2017, the USACE
reported that they spent $13.2 million in repairs. By September 2018, the Corps
finally bid farewell to Lock 52 and its counterpart, Lock 53, thanks to the
smooth opening of Olmsted.
Olmsted Lock and Dam operational achievement represents generations of
innovation excellence, more than 45 million labor hours and stands as an
example of the benefits provided to the nation and the Department of Defense
from the work done by USACE on our nation's critical inland waterways.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
Ag Groups Make Final Plea to FMSCA for Changes to HOS Rule
The U.S. Department of Transportation's (DOT) Federal Motor Carrier Safety
Administration (FMCSA) asked for public comment on their Aug. 23, 2018,
Advanced Notice of Proposed Rulemaking (ANPRM), to determine if Hours of
Service (HOS) revisions may alleviate unnecessary burdens placed on drivers
while maintaining safety on our nation's highways and roads. The original
comment period was supposed to end on Sept. 24, but a number of organizations
requested extensions.
The current HOS rules are posted here:
https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regula
tions
Some of these organizations included American Trucking Associations,
Commercial Vehicle Safety Alliance, International Brotherhood of Teamsters,
National Pork Producers Council and the National Tank Truck Carriers, among
others. Certain regulations included in the HOS rule are having a significant
impact on agriculture and other sectors of trucking. In order to provide all
interested parties with additional time to submit comments, the FMCSA extended
the deadline to Oct. 10, 2018.
The FMCSA noted on their website that the four specific areas under
consideration for revision are:
*Expanding the current 100 air-mile "short-haul" exemption from 12 hours
on-duty to 14 hours on-duty, in order to be consistent with the rules for
long-haul truck drivers.
*Extending the current 14-hour on-duty limitation by up to two hours when a
truck driver encounters adverse driving conditions.
*Revising the current mandatory 30-minute break for truck drivers after 8
hours of continuous driving.
*Reinstating the option for splitting up the required 10-hour off-duty rest
break for drivers operating trucks that are equipped with a sleeper-berth
compartment.
In addition, the ANPRM sought public comment and relevant data on two
recently submitted petitions requesting regulatory relief from HOS rules (1)
pertaining to the 14-hour on-duty limitation, filed by the Owner-Operators
Independent Drivers Association (OOIDA) and (2) pertaining to the 10-hour
off-duty requirement, filed by TruckerNation.org.
The OOIDA has asked for the elimination of the arbitrary 30-minute rest
break and allowing drivers to take rest breaks once per 14-hour duty period for
up to three consecutive hours as long as the driver is off-duty. In addition,
OOIDA recommended expanding split-sleeper berth flexibility and updating the
definition of the "Adverse Conditions" exception and applying it to the 14-hour
clock among other HOS changes that would benefit highway safety.
OOIDA noted in their comments submitted to FMCSA that it based its comments
on feedback from its members, who are predominantly small-business truckers.
"Most of the trucking industry is made up of small businesses," said OOIDA
President Todd Spencer. "Small-business truckers are the safest and most
diverse operators on the road. Yet for far too long, the federal government has
failed to grasp the importance of this diversity and continues to burden the
trucking industry with a "one-size-fits-all approach that punishes small
businesses, stifles competition, and overregulates an industry deregulated by
design."
FARM BUREAUS AND LIVESTOCK GROUPS WEIGH IN
The National Cattlemen's Beef Association, Livestock Marketing Association,
American Farm Bureau Federation, American Beekeeping Federation, American Honey
Producers Association, and National Aquaculture Association on behalf of the
specialized subset of experienced drivers, submitted a petition to FMCSA. These
groups pointed out the needed flexibility from certain provisions of the FMCSA
HOS rules to accommodate the unique interstate transportation challenges of the
U.S. livestock industry.
Read more about it here:
https://www2.dtn.com/ag/assets/HoS_Exemption_Petition_of%20Livestock_Haulers.pdf
The groups asked for a five-year exemption from certain HOS requirements for
livestock haulers and encouraged the Department of Transportation to work with
the livestock industry to implement additional fatigue-management practices.
Current HOS rules limit drive time to 11 hours and limit "on-duty hours" to
14 hours. Instead, the groups asked that livestock haulers be granted approval
to drive up to 15 hours with a 16-hour on-duty period, following a 10-hour
consecutive rest period. "Any livestock hauler wishing to operate under the
extended drive time would be required to complete pre-trip planning and
increased fatigue-management training," noted the petition.
"Livestock haulers are highly-trained professionals who take careful steps
to ensure the safety of everyone on the road. Through this petition, we hope to
work with DOT to build on our industry's strong safety record and provide
haulers with some additional relief from overly restrictive HOS requirements,"
said Kevin Kester, president of the National Cattlemen's Beef Association.
"When livestock and other live animals are transported, it's important to
get them to their destination safely and without delay or disruption. Safety
for the driver and others on the road is a priority. That is why we are
petitioning DOT to adopt modern fatigue-management practices that provide the
same or greater level of safety while avoiding unintended and unnecessary
stress on the animals entrusted to our care," said Zippy Duvall, American Farm
Bureau Federation President.
Not all participants supported increased flexibility to the HOS rule. In an
Oct. 11, 2018, article, Transport Topics reported that at a public listening
session, Harry Adler, public affairs manager at the Truck Safety Coalition,
urged FMCSA to "strongly consider" safety implications before making changes to
HOS rules. At that listening session, Franklin Wood, a father whose daughter
died in 1992 on the road to college when a truck hit her disabled vehicle, said
flexible rules allow "bad actors more leeway to be reckless," noted the article.
"I think even eight hours on the road is a hardship. Backing off of
regulations only makes it easier for the ones that will exploit these rules to
the detriment of the driving public," Wood said. "Safety was the formation for
FMCSA. It's in the name. Making driving more efficient for the carriers is not
your responsibility."
Now that the extended comment period has ended, it is up to FMCSA to decide
what changes or possible exemptions may or may not be made in to law. Given the
pros and cons presented by the some 5,021 online comments and others in various
listening sessions, the decision will likely not be an easy one.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
******************************************************************************
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