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USA. Higher Rail, Ocean Rates Drive Wheat Transportation Costs Up
31.05.2010 10:34 "Agro Perspectiva" (Kyiv) —
The cost of shipping U.S. wheat to Japan increased slightly during the first quarter 2009. The increase in wheat transportation costs was driven mainly by higher rail and ocean rates.
According to the USDAs Grain Transportation Report released on Thursday, the cost from Kansas and North Dakota through the Pacific Northwest (PNW) increased over 3 percent from last quarter, and 31 and 36 percent from last year. The costs through the Gulf from Kansas increased about 1 percent from the previous quarter, and the costs from North Dakota increased less than 1 percent from the previous quarter. Year-to-year costs for shipping through the Gulf increased 44 and 33 percent from last year due mainly to higher trucking and ocean rates.
The total landed cost (farm value plus transportation costs) to ship wheat from each State remained relatively stable during the first quarter. The landed costs from North Dakota through the Gulf continued to exceed those for other routes for the first quarter. First quarter transportation costs represented 37 to 45 percent of the total landed costs.
Farm values for wheat in each State continued to represent a smaller share of the total landed cost.
The farm value for Kansas was 59 percent to the PNW and 57 percent to the Gulf. This compares to 63 and 55 percent from North Dakota.
In comparison with last year, the farm value for Kansas was 70 percent for both the PNW and the Gulf and 76 and 70 percent, respectively, for North Dakota.
Ocean freight rates for shipping wheat to Japan during the first quarter increased about 4 percent from the PNW and about 1 percent from the Gulf.
However, compared with last year, ocean rates for shipping wheat to Japan increased 111 percent in the PNW and 87 percent in the Gulf due to increased global demand for bulk commodities and the extreme low rates caused by the recession in early 2009.
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