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Cash Market Moves             08/03 12:17

   US House Approves Water Resources Development Act of 2020

   In a bipartisan vote in the House, the Water Resources Development Act 
(WRDA) of 2020 was passed on July 29 by a unanimous voice vote.

Mary Kennedy
DTN Basis Analyst

   Water Resources Development Act (WRDA) legislation passed on July 29 
provides authority for the U.S. Army Corps of Engineers (USACE) to implement 
water resources development projects. Since 2014, Congress has enacted three 
consecutive WRDA bills on a biennial basis. On July 15, House Transportation 
and Infrastructure Committee unanimously approved WRDA 2020, and in May the 
Senate Environment and Public Works Committee passed its version of the 
legislation -- the America's Water Infrastructure Act of 2020 (S. 3591).

   In a news release issued immediately after the vote, National Grain and Feed 
said, "Today's bipartisan vote in the House brings Congress one step closer to 
achieving new WRDA legislation in 2020. NGFA will continue to work with both 
the House and Senate in an effort to ensure these policy wins for inland 
waterways and ports are reflected in the final agreement."

   "To maintain American agriculture's competitive transportation advantage 
against other countries, stakeholders must relentlessly make the case for 
continued investment in U.S. waterways infrastructure," said NGFA Vice 
President of Legislative Affairs and Public Policy Bobby Frederick. "Today's 
bipartisan vote in the House brings Congress one step closer to achieving new 
WRDA legislation in 2020. NGFA will continue to work with both the House and 
Senate in an effort to ensure these policy wins for inland waterways and ports 
are reflected in the final agreement. An efficient waterborne transportation 
system is crucial for growing the American economy and job creation, and is 
vitally important to U.S. agricultural exports and their positive contribution 
to the U.S. balance of trade."

   H.R. 7575 also would allow access to the existing balance of funds within 
the Harbor Maintenance Trust Fund (HMTF). Currently, more than $9 billion has 
been collected and deposited in the fund but gone unspent for its intended 

   "Allowing full use of the [HMTF] for its intended purpose would correct the 
fiscal disservice to those that pay the 0.125% ad valorem tax based upon the 
value of cargo imports and would help restore the United States' comparative 
transportation advantage," Frederick said.


   Almost all of the locks and dams on the Upper Mississippi River System, 
including the Illinois Waterway, are experiencing varying levels of problems 
due do the age of the infrastructure. Currently, there are five locks and dams 
shuttered for repair on the Illinois River. These locks are all approaching 80 
to 90 years old and were built with a 50-year engineered lifespan. The major 
maintenance effort on the Illinois River is expected to increase the lifespan 
of these valuable assets another 25 years, according to the U.S. Army Corps of 

   While it was a well-planned closure, grain shippers will be unable to load 
out corn and soybean barges during the closure. Other modes of transportation 
will be available during the closures but will not be as cost effective as 
moving corn or soybeans via barge. Inventories may increase at some terminals 
and some shippers may load empty barges already berthed to be ready to move as 
soon as navigation reopens.

   In addition to grain movement stoppage, the Kinder Morgan ethanol terminal 
in Argo, Illinois, cannot move barges downriver during the closure, causing 
buyers to look for more expensive options. When the closure began on July 1, 
ethanol cash prices at Argo surged higher, along with prices for rail Chicago 
Rule 11, which became a secondary and slower moving choice for buyers. 

   USACE Rock Island District developed a consolidated repair schedule that 
included a short closure to locks in 2019, followed by two extended closures in 
2020 and 2023. The closures are scheduled to take place simultaneously to 
lessen the effect on commercial navigation as much as possible. As of now, some 
of the five locks being repaired will be closed through Oct. 29. Here is a link 
to the updated closure schedule: 

   The river's infrastructure continues to deteriorate and major flood events 
-- like the latest in 2019 -- put even more stress on our locks and dams. Most 
of the locks and dams were built in the 1930s with a life expectancy of maybe 
50 years. In March 2019, USACE estimated the backlogged maintenance cost for 
locks and dams of the Mississippi and Illinois rivers to be more than $1 

   In addition to lock and dam repairs, money needs to be available for 
dredging, especially emergency dredging. Shoaling was left behind on nearly the 
entire Mississippi River System after the 2019 flooding. Dredging costs climbed 
to nearly $10 million, about five times more than normal, because shoaling was 
so widespread and allocated funds nearly ran out. Had funds not become 
available, the dredging would have been put on hold and much of the Upper 
Mississippi River would have been impassable.

   Without appropriate funding for repairs and dredging, there could be severe 
economic consequences to all industries that rely on the U.S. river system to 
move their wares to market.

   Committee on Transportation and Infrastructure WRDA 2020 fact sheet: 

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

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