UPDATE 1-Cargill cuts barge draft due to low Mississippi River

Fri Nov 30, 2012 2:40pm EST

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* Northbound drafts cut to 8 feet, southbound curbs imminent

* Cargo capacity reduced by at least 13 pct

* Further restrictions expected, shipping stoppage possible

By Karl Plume

Nov 30 (Reuters) - Cargill Inc's barge company said on Friday it has limited the volume of commodities that can be loaded onto its vessels due to low water on the Mississippi River and expects the situation to worsen along the critical shipping waterway.

Drafts on northbound barges were limited to 8 feet (2.4 meters), down from 9 feet or more normally. Similar curbs on southbound barges carrying grain and other goods from farms in the Midwest to export terminals at the Gulf of Mexico were imminent, said Richard Calhoun, president of Cargo Carriers.

The drought-sapped Mississippi River is forecast to drop to near-historic lows by mid-December along a busy stretch from St. Louis to Cairo, Illinois. Drought conservation steps have cut water flow from upriver dams on the tributary Missouri River.

"If the (northbound) barge won't arrive until after that time, it needs to carry a lower draft. The same will soon be true on southbound business. We end up with 200 tons less than normal in a barge by doing this, losing about 13 percent of the normal capacity," Calhoun said.

"But as of today, it appears we are headed to more restrictions and potentially a closure unless we get additional rain or more water released off the Missouri River," he said.

Further shipping restrictions would include even lower drafts and smaller barge tows to transit through a narrower shipping lane, he said.

Numerous barge companies, including top operator Ingram Barge, have started imposing curbs on drafts in anticipation of lower water to avoid groundings or other damage to their fleets.

The U.S. Coast Guard has said it will not close the Mississippi because of low water, but shippers stress that navigation will be halted if the river drops much further.

At least 90 percent of the tow boat fleet on the Mississippi requires drafts of at least 9 feet, although they may operate with as little fuel as possible to ride slightly higher on the water.

Cargo Carriers is the fifth-largest barge line in the United States with a fleet of about 1,300 barges.

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