Fred Frailey Blog

The day we import corn . . .

  • Comments 25

The U.S. is the world’s biggest producer of corn. To put this in its most basic perspective, corn is a major foundation of our economy. We export oceans of the stuff. The portion we feed to livestock keeps meat affordable. So I was struck by a press release I read the other day. A ship containing four trainloads of Brazilian corn had docked at Port Manatee, near Tampa, Fla., to sell to American customers, for animal feed.

Hello? What kind of bad dream is this? We sell you corn, you being the rest of the world. And yet it has come to this. This year’s corn crop, affected by drought, is down 13 percent from that of 2011, and is the smallest since 2006. Interstate Commodities Inc. plans to import 10,000 truckload equivalents of corn through Port Manatee.

Now the good news, for railroads, at least: CSX will deliver this corn throughout its network and elsewhere in the U.S. Still, you have to wonder: What is going on, for this to happen? Your comments are welcomed. — Fred W. Frailey

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  • The demand for corn for ethanol production, for animal feed, and for other uses has pushed the corn prices up to the point that someone is able to import corn and make a profit doing so.  The policies and laws that have created this situation can be debated and argued over.  What is certain is that the amount of ethanol blended into gasoline is dictated by law and the law will not be quickly changed.  Other corn users may changed to alternate grains or move to eliminate their need for corn or other grains.  This change may not be quick enough to .  Some beef, pork and poultry producers will reduce or eliminate production to cut feed costs.  These things will take some time.  We can expect the prices of beef, pork and poultry to rise.  We can also expect to see the cost of items made with corn syrup to increase.  

  • Sort of like brining coal to Newcastle… which also now occurs with the British now importing high quality coal from overseas.

    Global Warming is likely the cause, it didn’t cause the drought but I no doubt that it has made it a lot worse, that is what the scientists predict, a warming globe will cause it to rain harder when it doses rain, arid regions will become even hotter and dryer.

    Living in the Northeast we have seen some really bad weather in the last few years, like our governor said, we’re having 100 year storms with increasing regularity. Railways have been hit hard by the weather, from Vermont to New Jersey.

    I agree that ethanol is a big problem, it is important as a gasoline additive to replace a suspected carcinogen that was getting into groundwater, but as a substitute for gasoline it’s very inefficient. Given rising corn prices corn is best used as food than fuel.

    We also need to farm better, more diverse crops and better irrigation.

    The Mississippi River is also at record lows and barge traffic may soon end, perhaps good news for the railroads, but the news media reports that there is not enough freight cars to make up for the barges.

    As for global warming, there is plenty of uncertainty of its effects beyond the basic warmer climate and rising sea levels, you can’t blame any one event on it. However I have no doubt that it is occurring given that when I was a kid the library only had books on ships getting crushed by ice in the Northwest Passage, and now its ice free during the summer.

    Explorers in sailing and later steamships went north and got stuck, sometimes unable to escape. It took two years for the first successful trips where made in the 20th Century. The Royal Canadian Mounted Police made the trip during WWII, and after the two year trip they declared it had no role to play in the war effort. They went back to the West Coast via the Panama Canal.

    But today shipping companies are planning to send freighters from Asia to Europe via the waterway, cruise ships are now bringing tourists, and oil companies are moving in for off shore drilling. The governments in Washington and Ottawa are fighting over whatever the Northwest Passage is international waters or not.

    So I see it as a very real problem… but I doubt that we can stop it, no political will and short term economics are very much against the big solutions necessary to at least fix it even partially.

  • The importing of corn is not limited to the Gulf.  ADM and Tate & Lyle in Decatur, IL are 'importing' several trainloads of corn per week from the northern plains. BNSF via CN thru Peoria is the primary route but CP via the NS has also delivered trains.  These are moves that have never been made before.  

  • To add to mtz360's comments, ADM's Peoria plant is getting BNSF corn shuttle trains from the Northern Plains and CPRS has been handing off similar trains to CSXT at Chicago for the Cardinal ethanol plant near Harrisville, Indiana. Also, several shuttle loaders on BNSF in Illinois have been RECEIVING corn trains. Reportedly, one of these (probably Ruff Brothers Grain) trucks the corn to an ethanol plant in Gibson City, Illinois. But of course, these are domestic shipments, and that the US is IMPORTING corn is the real story here.

  • Wow, it didn't take long at all for someone to bust out the kool-aid.  Could it be a record?  At least reading these global warming alarmists is amusing, so it's accomplishing something.  You'd think this is the first drought we've ever had, but I digress.

    I found the news about corn imports eyebrow raising as well.  I think it just indicates that we're in a bizzaro world right now.  As some have indicated, the market will respond.  It seems that the ethanol guys are hurting now.  On my journey's, I've seen the differential between a gallon of ethanol (e85) and a gallon of regular gas shrink dramatically.  It'll be interesting to see how this impacts the ethanol industry.  As indicated by another poster, we're stuck with ethanol for the foreseeable future regardless of whether you like it or now, but I'm curious to see if the industry uses these challenging times as food for thought and becomes stronger because of it.  

    I heard alot about alternative feedstocks such as grasses, algae, etc.  I haven't heard much about those alternatives lately.  Perhaps I'm just missing the developments or perhaps they aren't as hopeful as they once were?

  • Corn for ethanol is such a bad idea on so many levels.   This is just more evidence.

  • Even though this benefits railroading, I see this as a one-time event, not a new trend.  Wary farmers will plant more drought-tolerant strands of corn and production will recover.

  • The import of grain over the Gulf of Mexico is nothing new. Back in the 1980s when I was but a young pup I plied my shovel cleaning the coal off the decks of the ocean going barges at a power plant on the Florida Gulf Coast ($6.78/hour and all the coal you could eat). The tug's crew told us tales of the various cargos they carried including grains from South America. So I'm not entirely sure this is "news."

    Also, this is in response to domestic drought conditions; one point does not make a trend. Even so, living near a linear playground for adults that was once the West Coast Subdivision of CSX and knowing that this cargo will not have the opportunity to pass through my hometown coming north from Tampa is bittersweet.

  • Golly, all these thought on which to comment.  Which comes first?  Let's deal with the "coals to New Castle" issue.  I can remember when European coal was imported back in the 70s.  U.S. railroads were in economic trouble then, but that had little to do with the coal imports, which, if I remember correctly were from Poland.  It turned out the coal was ballast for freighters that would haul U.S. grain back. Perhaps the Brazilian corn is ballast and the real head-haul is whatever will be loaded into the ship here? The ship operators ended up making it both ways; they got free ballast and then were paid for the grain movement.  It didn't last too long, but the coal producers sure propagandized the situation as an argument why the railroads should lower their coal rates.

    Perhaps I missed something in reading the comments on Fred's blog, but moving grain from the northern Great Plains to Midwestern and even eastern processing plants just doesn't qualify as "importing."  I'm sure the growers of eastern Montana and North Dakota are delighted to have customers for their product anywhere that they can reach economically.  BNSF is reacquiring a 120-mile short line that was originally one of its branches, but was short-lined about a decade ago.  Today, it has three ethanol plants and two shuttle-train load-outs on the line and BN sees an opportunity to make a buck or two or three.  The price of corn is high enough that if you look at the weekly AAR traffic data you'll see that grain movement is off in double-digits.  I'll not get into a debate over ethanol, but between a "protected" market and the effect of drought, I don't think it too surprising that the supply chain is changing.

  • There are those who are now saying the era of the "petrodollar" is giving way to the "agridollar." Oil is riding the crest of a wave thanks to fracking. But the more basic essentials of life -- food and water -- are quietly rising in value. Not just in prices we see at the store, but in actual market worth. Governments, including our own, have been locking up more and more control over water supply. Meanwhile, the value of farm land, and even farm-able land, is going up. More rapidly than conventional forms of real estate. And most investors are buying that farm land not to turn it into more unneeded homes or shopping centers. They're making bank on the food crops. So, no matter which direction the corn, wheat, and other edible or combustible commodities flow, between nations or between states, it's only going to become a bigger and potentially more volatile business from this day forward.

  • personally I have issues with the use of corn, a basic foodstuff for ethanol production.  What happened to all those plans to change to the use of switchgrasss (still not sure exactly what that is).  I understand Brazil used the byproduct leaves from growing sugarcane to create thier ethanol. This makes a lot more sense to me.  Haven't we shown that the production of ethanol is a net energy loser (that is a question, not a comment or rant)?

  • Dear Hottshot65,

    To acknowledge that global warming is an issue that needs to be taken into account is not being alarmist. I’m simply stating a scientific fact that while there is a lot of unknowns about what effect a warming planet will have on weather and climate, that it will have some very large effects including bigger droughts and heavier rainfalls.

    While historically we have had some very bad droughts before like the Dust Bowl in the Thirties, or the mega drought that wiped out the Anasazi “Pueblo Peoples” in the Southwest centuries ago, the current drought seems to be part of agenerallong-term trend of the Great Plains and Mountain West getting dryer. Look at the low snowfall, the dying forests, pine beetle infestation, and massive forest fires.

    On the other hand out East we have seen increasing rainfall. One big local change in Upstate New York is that the biggest tributary of the Mohawk River in terms of annual flow has been West Canada Creek, where snow melt from the Adirondacks fed the river year round with a steady amount of water.

    But in recent years the flow from West Canada has fallen while the Schoharie Creek which helps drains the Catskills has increase its flow, but no in a steady amount year round but in large foods from sudden rainfall events upstream in the Catskills.

    Now scientists and engineers have been carefully monitoring the watershed of the Mohawk River for over a century because of the Erie Canal, NYS Barge Canal, and the numerous dams for the power companies and the New York City water system. So this change in tributary contributions and how it occurs is seen as a major change.

    Yes we have had some pretty big floods in decades past, but just in the past few years the Mohawk River has seen some big flood events in both spring floods and with hurricanes/tropical storms that have cause severe damage to the NYS Barge Canal, damaging the embankments, dams, and locks.

    This all fits in to what the climate science studies predict, that where the climate is arid, it will get even dryer, where it is wet, it will get wetter. When it rains, it will pour. No, we can’t blame every weather event on climate change, there is no conclusive evidence that global warming will cause more hurricanes, but the pattern of recent weather events do fit with the predictions of the scientists

    .

    But is a fundamental scientific truth that global warming is real, and that it’s picking up speed.

    In the opinion pages of the Wall Street Journal global warming may be a new age cult lead by its high priest Al Gore, but in the rest of the paper written by business journalists and not ideological Ayn Rand hacks it is portrayed as a business opportunity, including the good news for investors that artic resources and seaways are become increasingly accessible to commercial use.

    We know this because we have decades of accurate daily temperature readings from both cities and rural regions across the globe, from Central Park to Mt. Washington. That over the past several decades the climate has been getting warming is a provable scientific fact, by decades of careful observation.

    We know that sea levels worldwide are also rising, because we have been measuring that for almost a century. The seas are also getting warmer and more acidic. We know this to be true.

    We know that the glaciers are melting because we can measure that as well, not just a few decades in Greenland and Antarctica, but from over a century of photographs showing mountain glaciers around the globe retreating and vanishing. The snowlines and tree lines are moving up slope.

    Look at Glacier National Park, it won’t have any glaciers in just a few short years, compare the black and white photographs of the early 1900s to the modern photos taken today in identical locations of identical views, the glaciers are melting, as clear as day!

    The permafrost in the artic is melting; the tree line and more temperate flora and fauna are moving a little bit northward every year. We know this to be true; the oil companies are measuring it! The natives inhabitants are noticing these changes in their local environments.

    And finally sir, what about that Northwest Passage? How do you explain that! For all of modern civilization it has been an impassible obstacle, yet now days you could send an aircraft carrier steaming through it!

    Look, in recent years during the summer not only have several yachts have made the passage, but several large cruise ships and one freighter. So how do you explain this?

    And yes climate has change over the centuries, the “Little Ice Age” and "Medieval War Period”, but according to both ice core and deep sea sediment core samples, the CO2 levels in the atmosphere are at record levels even going back many centuries.

    And it must be in large part because of human activity, we are burning hundreds of thousands of years of coal, gas, and oil in in just three centuries, with the massive industrialization in Asia the burning of fossil fuels continues to accelerate.

    If CO2 levels in a few decades will be higher than they were in the past when the climate was very warm and sea levels where 25 feet higher than today, just how different will our local environments become?

    I’m sorry but “bizzaro world” explanation is just not a scientific statement.

    With all this said I don’t think we can stop climate change, there is no political will, not here and not overseas, ironically our carbon emissions are falling faster than that of Europe’s because of higher fuel efficiency in motor vehicles and the replacement of coal with natural gas in power generation.

    Look at the Obama Administration, for while pollution controls on emissions have been tightened, gas mileage for cars increased, and some money spent on green energy; the oil and gas industry is booming. The Keystone Pipeline now diverted from the aquifer in Nebraska will be finished, and the waters of Alaska’s North Slope have been open to drilling.

    And while coal may be hurting in the US (because of the gas glut, not EPA), we are working on exporting more of it, China is building a new coal power plant every week, India is building more coal plants, and even Germany is moving in the same direction as it mothballs its nuclear plants and tries to cut gas imports from Russia.

    Well so much for stopping global warming.

    Only in Great Britain is some progress is being made, the Conservative Government is moving to intervene in its electric power market to support new wind and nuclear power stations over new gas and coal plants. They also are moving forward on high-speed rail and other rail investments.

    So at least Prime Minster Cameron and Prince Charles think that climate change is a big problem that requires big action by both government and the private enterprise.

    So please Hottshot65 don’t call me an alarmist with kool-aid! Where the scientists and engineers that for the last several years “alarmists” when they warned New York City officials that they were woefully unprepared for a hurricane? It took several feet of water coming over the Battery and into the South Ferry Station to convince them!

    Likely we can’t stop it, but at least we can take measures to mitigate its effects, including on railways. We need find ways to reduce the effects extreme heat waves have on track and equipment. We need to make sure that the infrastructure is hardened to resist large storms, and where ever possible tracks, yards, and stations need to be place well above potential flood waters. Embankments and bridges should be hardened against raging streams and rivers.

    The best way to reduce the emission of greenhouse gases is to focus on actions that have other big benefits including increasing fuel efficiency or reducing pollution. Thus you get shorter term economic and environmental benefits with a longer term reduction in emissions.

    Look, the drought that triggered the Dust Bowl wasn’t the fault of man, but the greater disaster was, irresponsible farming techniques and a failure to understand the local climate, geology, and ecosystem when building new agricultural communities, made the drought so much worse than it needed to be.

    The topsoil blew away because there were no native drought resistant grasses to hold it in place when the dry winds blew. A large drought and similar farming exodus had occurred in the 19th Century in the same region after the first railroads arrived. The next wave of settlers failed to learn the mistakes of the previous generation and thus repeated it in the 1930s on an even larger scale.

    Ignoring the scientific consensus on climate change and just proceeding with business as usual only increases the chances of future crises and disasters. Planning ahead and taking preventive measures will help us avoid misfortune, and perhaps even allow us to prosper in a warmer world.

  • Just wondering.  Does Florida still grow enough oranges to cover the market?  With so many orange groves having been turned into commercial property,  I wouldn't be surprised to see the citrus industry importing ship loads of oranges to fullfill the demand required today,  be it fresh fruit or OJ.

  • Bjturon should spare us his climate-change rant, saving it for a blog of his fellow ideologues.

  • I have promised Fred that I shall try to restrain my normal proclivity to ridicule those who I think are incapable of rational thought.  That said, bjturon seems to have a bad case of diarrhea of the keyboard.  Little of his comment has anything to do with a shipload of corn arriving in Tampa Bay.  Actually, I can't think of anything he said that directly deals with that subject.  Note that I am taking no sides on whether we are facing fundamental climate change or not.  I'll accept that something is going on and that I am not competent to say with certainty what that is.  All that said, I would also urge Hottshot65 to get his head out of the hole into which he has placed it so firmly.  Absolute rejection is no more constructive than is adamant acceptance.  Sorry Fred; I had to say it.

The day we import corn . . .