Low river levels resulting in high basis for farmers - WSIL-TV 3 Southern Illinois

Low river levels resulting in high basis for farmers

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WSIL -- Low water levels on the Mississippi and Ohio River and as harvest gets into full swing it means higher basis for farmers.

Traffic has been halted several times in recent weeks on the Ohio River due to complications on locks and dams, further raising prices.

"Basis is just a part of farming," said Kelly Robertson. "It's just like the weather. It changes all the time."

Basis is the costs of storage and freight a grain elevator or terminal charges. While navigation along the rivers is still normal, loading barges at terminals has become increasingly difficult, forcing barges to carry less grain down river to ports in New Orleans, where the majority of the country's grain gets exported.

"Soybeans right now. Local basis is around a dollar. Whatever the Board of Trade, take a dollar off of that. Corn is fifty to sixty cents, or something like that," explained Robertson.

That leaves farmers with two options. Either hold onto grain and store it on their farms until basis comes down, or sell it now and eat the high costs.

"All the grain bins are full and we'll start putting it in the barn here," said Robertson. "When we're done with that one, we'll go on to the next barn."

For Robertson and others, it makes no sense to haul grain in and sell, if they have the ability to store it and get an addition sixty to eighty cents per bushel down the road.

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