Midwestern States Implement Fuel Tax Changes – AgFax

Several Midwestern states are implementing fuel tax changes

Effective July 1, Indiana and Missouri increased fuel tax rates, while Illinois suspended all scheduled fuel tax increases for 6 months, through January 1, 2023. In Indiana, the diesel rate increased by 2 cents to 55 cents per gallon. According to a 2017 law, Indiana’s fuel tax rates are set to increase through 2024 based on an indexed formula.

Additionally, effective July 1, Missouri’s diesel tax rate increased by 2.5 cents per gallon, for a total tax of 22 cents per gallon. As required by a 2021 law, Missouri’s tax is set to gradually increase by 12.5 cents per gallon, for a total tax of 29.5 cents per gallon by July 2025.

Earlier this year, Illinois suspended further fuel tax increases, freezing the diesel tax rate at 46.7 cents per gallon. Across the country, diesel prices have hit record highs this year.

In the Midwest, for the week ending June 13, diesel prices reached $5.631 a gallon, 239.8 cents higher than the same time last year.

The closure of the lock on the old river postponed to August 30

On August 30, the US Army Corps of Engineers (USACE) will close the Old River Lock, Lettsworth, LA, on the Mississippi River. Originally scheduled for August 15, the closure for necessary repairs will last approximately 75 days (until November 12), compared to the original 90 days.

The agricultural industry feared that the timing of the shutdown, which coincides with the harvest season, could negatively impact grain exports. Since trucking and other alternative logistics outweigh the costs of river transport, closing the lock for the entire harvest season would have cost farmers dearly.

The lock closure will directly impact two grain elevators, preventing them from shipping grain down the Mississippi River for the duration of the closure.

To synchronize with the closure of Old River Lock, the USACE will also postpone until August 30 its scheduled closure of Lindy C. Boggs Lock, Red River, Marksville, LA. The Lindy C. Boggs Lock will close for a month, reopen for 2 weeks to clear the traffic backlog, then close for another month.

Port of Houston awards contracts to dredge Houston shipping channel

On June 17, the Port of Houston awarded two contracts, worth $429.4 million, to dredge a 17.3-mile section of the Houston shipping channel. The two companies carrying out the work are Weeks Marine (with a $329.6 million contract) and Curtin Maritime Corp (with a $99.8 million contract).

The companies will widen part of the channel by 700 feet and another part by 455 feet. The dredging of the channel is part of the previously announced $1.1 billion expansion of the Port of Houston, which is to be completed by 2025.

The expansion is expected to allow the shipping channel to accommodate 1,400 ships per year and is expected to generate more than $134 billion per year. The Houston Ship Channel is currently the busiest waterway in the country. Its facilities have an economic impact of nearly $802 billion and support more than 2.1 million jobs.

Insights by sector

Export sales

For the week ending June 23, unshipped balances of wheat, corn and soybeans totaled 21.95 million metric tons (mmt), up 5% from the same period last year and down 7% from the previous week.

Maize net export sales were 0.089 mmt, down 87% from the previous week. Soybean net export sales were −0.120 mmt, down significantly from the previous week. Weekly wheat export net sales for marketing year 2022/23 were 0.497 mmt, up 4 percent from last week.

Rail

US Class I Railroads shipped 21,732 grain cars in the week ending June 25. This is down 1% from the previous week, 1% lower than last year and 2% higher than the 3-year average.

July’s average shuttle sidecar deals/offers (per car) were $58 less than the rate for the week ending June 30. That was $51 more than last week and $250 more than this week last year.

Barge

For the week ending July 2, grain movements by barge totaled 932,872 tonnes. This was 50.7% more than the previous week and 20.9% more than the same period last year.

During the week ending July 2, 595 grain barges sailed down the river, 185 more than the previous week. There were 397 grain barges unloaded in the New Orleans area, down 14% from last week.

Ocean

For the week ending June 30, 21 ocean-going grain vessels were loaded in the Gulf, down 19% from the same time last year. Over the next 10 days (starting July 1), 41 ships were expected to be loaded, down 18% from the same period last year.

As of June 30, the shipping rate for one metric ton (mt) of US Gulf grain to Japan was $76.50. It was 3% less than the previous week. The Pacific Northwest rate in Japan was $44.00 per tonne, 2% lower than the previous week.

Fuel

According to the US Energy Information Administration website, the agency will release on-road diesel fuel prices on Thursday, July 7 at 4:00 p.m.

Full report.

Comments are closed.