REFILE-U.S. Midwest storm snarls grain, hog shipments; shuts flour mill

Wed Feb 5, 2014 3:31pm EST

By Karl Plume

CHICAGO Feb 5 (Reuters) - A winter storm that brought heavy snow and ice to much of the U.S. Midwest farm belt on Wednesday slowed grain and livestock shipments to a near standstill, reduced pork production and halted wheat milling at the country's second-largest flour mill.

"The path of the greatest snow occurred from the central Plains, Kansas and Oklahoma, east and northeast into Ohio and parts of Michigan," said Drew Lerner, meteorologist with World Weather Inc. "That's prime crop country."

"From Kansas into Illinois, Indiana and Ohio there certainly has been some delay in shipping of anything during the last 24 hours," he said.

The heaviest snow fell on parts of top wheat producer Kansas while central and southern Iowa, the country's biggest producer of corn, soybeans and hogs, received 2 to 6 inches, forecasters said.

Snowfall totals approached 9 inches or more in parts of Illinois, Indiana and Ohio. Portions of the southern Midwest received 3 to 6 inches of snow followed by freezing rain, which slowed grain barge loading along the lower Ohio River.

Snow-related travel restrictions temporarily closed a Mondelez International flour mill in Toledo, Ohio, as wheat delivery trucks were not allowed on roads, trade sources said.

Many grain elevators around the region were open for business but deliveries of corn and soybeans slowed to a trickle as slick roads discouraged farmers from venturing out in grain trucks.

"I don't expect to see any trucks today. I'm not sure why we're here either but we made it in," said a grain dealer at an elevator near Cincinnati, Ohio.

Still, cash premiums at interior elevators eased following heavy farmer selling earlier this week.

ICY RIVERS

Barge shipments of grain on the Illinois and mid-Mississippi Rivers continued to flow, but heavy ice buildup after weeks of frigid weather created numerous shipping bottlenecks along the way from the heart of the farm belt to export facilities at the Gulf Coast.

Nearby basis bids for corn, soybeans and soft red winter wheat shipped by barge to the Gulf rose on Wednesday due to the slowdown in shipping and amid historically high freight costs.

Most locks on the Illinois River were restricting the width of barge tows because ice buildup narrowed locking chambers, and some required helper boats for entering and exiting locks, said Mike Zerbonia, operations manager for the U.S. Army Corps of Engineers' Illinois Waterway Project.

As a result, shippers are restricting their tows to only six or eight barges, assembled two barges wide, versus the 15 barges or more normally, assembled three wide, industry sources said.

Similar width restrictions were in place at Lock 27 on the Mississippi River near the busy Port of St. Louis, U.S. Army Corps of Engineers spokesman Michael Petersen said.

Traffic was one-way only along a 15-mile stretch of the Illinois River near Peoria because ice has narrowed the shipping lane, a U.S. Coast Guard spokesman said.

HOG MOVEMENT SLOWED

The U.S. hog slaughter on Wednesday was lighter than normal as snowy and icy roads prevented livestock deliveries to some plants. Cattle slaughter facilities, however, were largely unaffected as the heaviest snowfall was east of the country's main beef cattle region.

Routh Packing plant in Sandusky, Ohio, reduced its hog slaughter on Wednesday due to light available supplies and canceled its Thursday shift, said vice president Frank Moscioni. The plant will make up for some lost production with a rare Saturday shift, he said.

Cargill beef and pork plants were all running on normal schedules, according to spokesman Michael Martin. Smithfield Foods declined to comment on plant disruptions.

The U.S. Department of Agriculture estimated Wednesday's U.S. hog slaughter at 398,000 head, compared with 425,000 head on the same day last year. Cattle slaughter was pegged at 115,000 head, versus 119,000 head last year.

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